DJIM #5 2007

Well, it's been a pretty decent earning week for us and opportunities were there to grab.    That is, if you didn't get distracted by the index action.    During the earning season,  it's rare for the market to pullback significantly since there are always funds/institutions waiting for their favourite stocks to report.   At the end of an earning season, however, things may be different as there aren't that many things to look forward to for another three months.   By then, interest rate talk, economic number and as well as the seasonality will be big factors dictating the market movement.  Still, there are small caps that periodically surprise with the timing of their releases, so it's almost earning season 12 months a year for us.     Well, that's how we've been viewing things.   

During the earning season, the only thing in our opinion that should be dominating your trade/watch list are the earning plays.    Basically keep an eye on those that have had good potential of releasing strong earning and keep a tag on those unfamiliar names that just reported strong earnings.   Pretty soon, your watchlist will expand from a couple of dozen to literally few dozen stocks.     Again, the point of having this kind of watchlist is to simply making trading decisions easy for you.   Basically, when you have a list full of strong earning stocks, it's just a matter of picking the ones with the best momentum, best charts, best float and best sector.   Fortunately, we are here to give everyone a heads up on what we think are the best so we can all be on the same page and trade the most out of those potential winners.

Here are some of the stocks of interest from past week....

HRBN, so why start off with this BB stock you ask?   Simply put, going toward the end of Friday, this one had the best momentum.    We alerted on the fact that it's going to be listed on Naz on Jan. 31th and given the quick glance of its fundamental and float, we thought it has a very good shot to make some good gains at $10.   Well, an hour later Briefing.com picked it up and we hope some of you have picked up in the low 10s.  We said the yahoo's could spread the story quickly, that's why we wanted to get this out to you first.    Volume on Friday is still a tiny 200k and given the fever Chinese stocks have been getting lately, we think this one is far from being discovered.   Float is 5 mill and co. is profitable for a few quarters in a row.    Not much else you can ask for.    We think it should get some more upside action before and after the Nasdaq listing.

USAP, buy the dips!   This strategy works the best with strong earning play.   If you missed the first run from 39 to 43, getting in at the low 40 is not a bad thing.   We added some on Thursday and now the stock looks better than before.    It showed that there's interest and support when the stock dips.  

CCF,  maybe this one doesn't have the kind of crazy momentum of some of the Chinese stocks but we just like the way it is.   The point is, this is the kind of stock where you don't have to check every single tick and knowing that it'll probably make new high sooner or later.

HMIN, we think this one is definitely getting more and more interest everyday.   The IBD profile we noted Friday before the bell sure helped the cause.  It's no longer a simple Chinese play anymore, it might be an Olympic play as well as IBD noted.    As long as the major trend line does not get violated, we'd buy some on the dips and sell some on strength.    If you have a fast trigger, you can definitely buy on a breakout and make a point or two that way.   This one is still very much in play.

TRCR, we think we have written enough on this one and we are keeping a very close eye on this one.   We'd like to add some in the low 6s but if it doesn't come down, we'd be just as happy adding some on strength.

VARI RESP VTRU ENR,  how we play these earning plays are simple.  We get a starter position in each one and add to the strongest one.   If one position lags, cut it lose and add the funds to the stronger ones.   This actually remind us of a race where you get to bet on all of the horses.  The only difference is that it's rare you lose on any horse since they are all winners to begin with.  Here, we are playing with more institutional money and sometimes the trend is easiest to pick up.  VTRU, besides the EPS number it is also a speculative takeover target, for you home gamers of the dating scene they are of the Lavalife site and others.  lol. $50 are the digits being thrown around.

NWK, this was a play on pre-announced earnings. Usually, they sell off once the numbers are publically released but for whatever reason this one keeps staying strong and the action just seems right.   We're set up here and looking to add more on a break.  It got painted down at the close and some sellers wanted to get out for the weekend, so we'll see what it does early tomorrow before proceeding further.

CCOI, our last alert on it said there were some favorable ramblings on the CLEC sec including TWTC.  TWTC had a very nice Friday and we are looking for more out of CCOI on TWTC heels.

ABM, is back in the picture. One look at the chart shows we could be looking at another test of the highs and a further break.

IPGP, this is looking better on the chart with a close over $26 and as posted by a member in the forum this company is starting to get recognized for its growth earning potential. This is the discovery we talked about...slowly happening.

Bascially in breaking down what we have is quite simple.  Our sector play in Aluminum, we have CENX that is up 5 pts since we touched on the subject on AA's earning.  We have USAP, as our steel play with earning.  So you want to keep an eye on the whole sec action with these.  On the cheap speculative trading side, we have a TRCR and HRBN.  There are new earning plays like RESP, VTRU, ENR to test out and hopefully see them become long term plays.  And there is the old reliable DJIM recycling program working with the HMIN, CCOI's of the trading world.

Just a note... the market is a complex dynamic with uncertainity at every turn.  What we do here is trade on emotion, mostly what our gut(s) is telling us might work or not and we react to it.   We trade when and what we feel gives us the best probability at a successful trade, we don't expect you to have this gut as for many of you its not your full time gig...so leave that to us and worry only about proper risk management of your money.  You don't have to be a rocket scientist to see which direction our selections go first,  if anything work on your timing so you can get the most out of a stock.

Big Day!

In our opinion, today is one of the biggest days if not the biggest day for us so far in 2007.    It was almost near perfect except for a couple of stocks but overall effect is very positive.    Index seemed to be going much more wild than most of the stocks on our watchlist but we think it's understandable given the cross currents of a lot of news out there.   Of course, what we care the most at the end are how some of the stocks in our portfolio are doing today.  We will proudly take this day considering there are many a guru and many a forums complaining about the market and the little opportunities for a good trade... A few things for tonight...

HRBN, big volume but a slight disappointing close.   Does that mean this play is completely over?   Far from it!  We think the volume today squarely put this one in the "in play" category.   So why did it not go up with this big volume you ask?   Simple, in terms of percentage, some early birds that supposed to have bought the "Naz Listing Leak" early may be cashing out and maybe some of you after an alert run from just over $10 to over $13 overnight.   We are going to be adding some on pull backs.   Keep in mind, this thing still trades on BB exchange and the market maker there may not be most friendly.   Hopefully when it gets onto the Naz Global Market, some institutions would step in and give it some orderly support. 

CCF,  boy things can turn quickly on this one.   The only disappointing thing is that this one has to shaken out on a day where most of the other DJIM stocks were having a very good day.    Nothing has changed on this one and the battle is close to the 9 ema.   Next couple of days will be the key to see which way it wants to lean.   At this point, we wouldn't be adding as the sell off volume seems a little more excessive and we'd give it a couple of days to show us which way WE ought to be leaning.  The earning did not change overnight, remember that!.  Don't forget how far this one has come in a short period of time and take these moves in stride.  Recently, we said 'she's a bouncin' and it went from 29 to 33's, so be patient.  There is plenty out there!

USAP, perhaps today is the day this stock is showing us that it should be the #1 holder in our portfolio.   One thing is for sure, this stock is definitely getting the kind of exposure CCF lacks.    Even though the trading can be just as volatile, but at least the support is there to push it back up.  We like this one and would add lightly on break outs and aggressively on pull backs.    By the way, when we say adding on a pullback does not necessarily mean we'd be adding on pull backs that have excessive volume that takes out meaningful moving averages, like CCF did today!.  Hopefully, the HMIN move Friday was fresh on your minds as you read the forum blurb on USAP this morning.

TRCR, it felt like it was just a matter of time.  That thought was just echoing behind our heads as we were just talking about it a couple of days ago.   Does today qualify as a breakout?  Hell yeah!  Did we add some on the breakout?  Absolutely.    We'll see how high the momentum takes this stock to. The volume was about 75K when we alerted to a watch for the $6.75/6.80, a 10minute volume chart shows the love it started to receive at those prices as we were hoping for.

MEND CHDX both of these broke out today but both didn't close near the high so we'll group them together.   Remember, CHDX is the volatile beast, so be careful with it.  MEND received a price tgt increase( see forum from premkt)

VTRU VE NWK HMIN ABM MFW ENR RESP ,  we have to say all these behaved quite well given the wild range we had today with the index.  This is a night we have to say the charts speak louder than anything we can say, so we will keeep it short.  There is a collage up of the big day players up in charts.

If you are spread out in a few of these names, hopefully you spread out your profit taking.  As much as we added here and there, we took some off as well in different names.

Post Fed Day

Normally, or many times in the past, the "Post Fed Day" has not always been kind to the market.   This time the market definitely had a change of heart.    When it comes to DJIM stocks, we actually had a much better afternoon than in the morning.   Many of the stocks we are familiar with just simply strengthened up toward the end and some of them had pretty good closing actually.   We'll pick out a few and highlight them...

CCF, perhaps this one is the most surprising one out of the bunch.   It was very ironic that only a couple of days ago that we were worried about its above volume sell off.   Again, we pointed out that we'd give it a couple of days to let it show us which way it wants to lean.   Volume today isn't spectacular but we think it has potential.   We added back some shrs today and no doubt also contributed to some of the rise today.   Nonetheless a new closing high is a new closing high.    What this does is that it actually puts this one back to our top watchlist and we'll again be adding aggressively.   The conclusion is, let the stock show you how strong it is before making up your mind of adding/chasing.   There's no need to be overly optimistic on "the best play" if the action seems uncertain.   If uncertainty occurs, reduce position and sit on the sideline with a little exposure.   Once the danger is over and the trend is clear, then jump back in.    Actually, this is more like the strategy for surviving in the jungle. lol   But in all honesty, trading the market is like surviving in the jungle.  There's really nobody else to look after you other than yourself.   Making kills (plays) just don't come easy when you got so much competition out there.

MFW, it's been up three days in a row now since our alerts on it Monday and of course the little alarm might tick off for a possible pause in this latest runup.    It doesn't mean that we have to go all out and sell it out.   Just be prepared for reversal and when it happens, don't be hesitant to reduce.  Recently after our initial buy in, MFW provided one quick trip down and that has turned out to be one of the best trades recently for us adding in the $26's.

SILC, ok so this one sat there for a couple of days and today broke out on pretty good volume.  There's not much to say other than the fact we added some toward the end.   Why at the end you ask?    If a breakout does not hold till the end, then it may be a fake one and we simply hate any kind of fake break outs.

HRBN, what to expect tomorrow?   Ummm, there's a chance it may follow through and start some momentum.   We are keeping our fingers crossed and if there's any sign of momentum picking up, we'd be adding aggressively.   We are watching it very closely.

TGX, time to let some go today.   We all had a chance after alert at $4, 20+% in 2 days is just too good to ignore.    We reduced most and looking to add on pullbacks.  BT noted in forum some technical analysis on it today.

A note on tech earnings on the Nasdaq, a definite theme has developed that started with AAPL, a few names early this week and then GOOG today.  You can put SWIR in this bunch of sell offs off excellent results.  Last night, we talked of the slows action in AH in the 15's and up only 10% on SWIR..."Maybe we should listen to the CC to find out why this didn't trade higher, but instead we'll let the action in the morning dictate what we do".  The action early showed SWIR had no chance and why.  Simply these techs are selling off the stellar earning news.   As we always say and said last night, wait for the market to dictate what you should do on a earning reaction.  If you do take a position early make sure its a starter, something you can rid of without much of a loss quickly.   At this point, we are carrying between 10-15 positions on any given day and blowing out a small starter position as in SWIR from AH is nothing when you have positive action in so many DJIM stocks.  Cut the laggards and those behaving badly.  If you are one to carry 2-3 positions at a time, you definitely should not be going large into earnings plays until the market shows you what it thinks.   It tells you pretty fast as with GOOG and SWIR last night and today.  We are looking at DLB's earning with all this in mind tomorrow despite how attractive it looked on paper first.

Other stocks showing strength, some more than others.. include ENR ABM GLDN VARI CNS OEH NWK FSYS ALB CENX TRCR ... so most of them are eps plays and all of them you've seen at DJIM over the past 5 months.

..with Love!... signed FC.B

Who you gonna trust in a untrustworthy market on Valentines Day?.... FC. Bernanke of course!.lol...The man blew a kiss and the market caught it big time..every sector got a big wet one from Fed Chairman today!  We won't bore you with this as we just react around here and let others digest and dissect all of this.  All we know is the contenders come out and play and the pretenders stay pat.  It is days like this that you fully understand if you should cut the laggards ( if you haven't the last few days).  If your stock didn't participate today or even yesterday, you are trailing the market.  Today proved the majority of DJIM stocks have been the right play, many toyed with new highs or just had nice action days.  Here is what was in the Box of Chocolates....the spiked ones first

TRT, well excuse if we didn't have time to wrap this one up..lol...we've talked about the lack of love TRT might experience and the reasons why this time around. This is why we had the starter at 13.50 and said we want confirmation over $14 before adding. Well...things changed a bit today and so did our thinking.  Seemingly no one else was connecting the report of the semi AMAT to TRT.   You know,  if you punch TRT competitors.. AMAT is a name you see.   The thinking was simple.  The semi's gap and TRT is sitting in the mid $13's with 30K volume only after stellar earnings.  HUH?..Just like CENX yesterday to a degree, this was a secondary play today on semi's and it was not participating.  We thought this wouldn't last but we didn't expect the rush of 300k plus shares to come in the last 2 hours..lol.  We added as soon as volume doubled from 30-40k time mention and added all the way up before taking some off end of day.  Considering all the time in the world was had for DJIM members to buy TRT since the report, including today under $14.... we can't say we'll be adding in the morning and maybe you should hold off too.

HRBN was the other stock we noted today at 12.70's made a NCH.  Yep, its the same Herbie we introduced at $10 and the spike to 13.70 the next day.  Well, hopefully it got that exuberance out of its system and can hold its gains.  Whatever the case , the China stocks look better as the FXI stabilizes and so we thought we'd go with the small gap open after yesterdays reversal.  We noted the big bids in alert, either this gets taken up into the conference HRBN is at on the 19th and/ or this bidder turns to seller on any bigger ramp up.  Hey, it's a market!

So those were the sweetest gainers but there was more in the box...

USAP made new highs, we have talked about this all week and today was the result.  MFW which reversed along side USAP the other day also finished well.  ENR BW VE OEH CGX HXM all put on a good show. We released most of our VARI as it seems tired and didn't participate.  A nice run for VARI and we'll be back.  It is best to release into a high quietly, nothing beats it after such a walk up since earnings.   So what you have is a bunch of stocks that performed well in a good environment, if you have ones that didn't...you most likely have a true laggard..a laggard is not ONXX that needed to rest after huge gains but an ALGN which can't bust out in a perfect storm for a stock that had its sight on a break.    Simply, you want to be in strength and not in stocks that make you have sleepy money.