It's almost unthinkable that we'd start the earning season with a nasty drop which begins the long decline. What happened yesterday simply gives many traders a dose of reality that nothing goes up forever and pullback/pauses are very common even in a seemingly bull market. Hopefully, you just relaxed watched the All-Star game and watched our Blue Jay star make a catch late in the game!...Wow, wasn't that something..lol...Guess the manager thought his arms were too tired after the HR' derby the night before to let him get an at bat. Thankfully, today proved that nothing has basically changed since the day before yesterday. Good earning plays are still being rewarded and bad ones are being dumped. Things are about as orderly as it gets. Also, for most participants, it's irrational to sell before the optimistic expectations they have with respect to their holdings. For DJIM, it works the opposite because we only get excited AFTER an earning has been announced. For us, there's no optimism, no expectation nor any feeling toward any up coming earning announcement. We are just excited over other people's excitement so we can take advantage when the actual trade comes.
There's no shortage of plays on the table today. For us or for most traders in our loop, we'd like to point out that we have a habit of working with the green plays. It's not only easier to do but it also makes a lot of sense regardless of the market condition. In an up market, obviously you want to hang with the ones with the best momentum. In a down market, anything green pretty much makes them stand out and you sure want a piece of the action unless the market is in a total distraught. Buying dips, on the other hand, is definitely not our favourite strategy and we'd try to stay away from it as much as we can. When you buy a dip, you couldn't help but thinking that you are just taking a chance that hopefully you are buying it near the intraday low. The planning of the trade as well as the execution will be tough on your mind when you go against the trend. That's why in an up market or when the market is in a clear bull mode, it's always better just to ditch those "buy on (#)ema dips" and work with the new highs and break outs.
LPHI, you are probably wondering why we weren't being aggressive buying the dips on this one when the "clear" outcome is for it to go challenge the new high. Well, there's always the probability that it won't. We basically want to strike when the moment is right. Today we got that moment between $35 and $36 and we got in. Instead of being in this one for a while and waiting for a move to happen, we'd prefer watching it until the move comes. Now the chart looks good and it looks like this one is ready to challenge its old high and beyond. We'd be adding more of this one aggressively if and when this one strengthens up.
CCF, our old friend did it again. This one came out with pretty good number as noted last night and stock acted correspondingly. We like the volume this one exhibited. As we have mentioned earlier today, this one has an IBD rating of 85 93 before the report. If the number gets revised up, it can mean a whole new world for this play. Again, it's just a possibility and not a sure thing.
ASYS, finally, this is a new play we are adding to our list after its tremendous "look at me" volume today. This one has a very small float and since they are associated with solar plays, we think this one is way undiscovered compare to others. Sure, many traders have started noticing this one today but we think the fun may be just the beginning. If you played it off the alert, you got 2 runs of almost a $1 intraday...we're looking for more and so just added on the dips. This little company is profitable, revenues growing and a very small float and not a one trick pony that was trading under 50k share day after day (2.2 mln today). This is the type of company when it reports that has the markings of potential yr. over yr numbers that will get it attention...but we're not waiting for that day off this volume. We said, we are seeking more attention for anything solar from the firms, news to keep these going, anything with solar has a ring to it to us, even if it is something like this today on a semi/solar like AMAT, which ASYS also happens to be...BofA believes solar opportunity transform AMAT into growth stock, BofA believe is AMAThas closed another solar thin flim deal with a European co. They est the size of the deal is 40MW with the initial investment in the 60m range. Firm believes the latest deal is particularly important as it is an emerging application, "building integrated photovoltaic". Total value of solar thin film contracts won to date, firm ests, is in the 540 mln range.They think AMAT will now win 600-900m in contracts in FY07 vs guidance of greater than 400 mln.
DRYS, this one was mentioned a couple days ago as our favourite shipper now before TBSI went tipsy. It's been mentined here many times before that as well. We felt TBSI needed a pullback but this one looked better chart wise, anyway. btw..TBSI is back to $31 after yesterdays sale. But it was DRYS today who showed us who's the boss and took on almost 10% and a new high. Again, we wouldn't want to chase this one blindly as the risk/reward ratio is not nearly as good when it was around $45.
AZZ, to us, this thing for sure is going to break $40 and beyond. Action looks superb in this one and we are adding.