DJIM #29 2007

The easiest thing to do would be to speak of the big market move last week, but we won't do that and instead look forward to the week ahead. Hopefully, we steered you in the right direction in our Journals the past while and you have stayed invested heavily in the market and our plays as they were the beneficiaries as much as anything else last week. Just looking at the list from DIM #28...DRYS TBSI LPHI AZZ FWLT PENX DDUP SCOR FSLR TSL LDK JASO and you see who played with enthusiasm.  If you need still need to grasp the significance of last weeks action, just look at the weekend charts/comments.  Funniest quote so far heard though, is ..."meanwhile while the media is enjoying their victory lap, many investors are less than enthusiastic about the moves in their accounts at the end of the week....they didn't see the same huge gains in their accounts".  Name the the tout and win a free month at DJIMstocks...NAH, that wouldn't work as too many of you are quite familiar with this singer.  Sounds like sour grapes for some reason, if you ask us!.   At this point in the game, we have to look for some potential stalled action, fortunately we have earnings as the base of this DJIMstocks and it should not stop us from going forward as earnings will pick up this week and new picks will start to show their colors.  We already had some nice reports from CCF, GBX, SCHN  indicating a diverse crop of good reports possibly to follow. Use our Earnings Dates link to see some notables reporting.  Again, we ask for members to post within that link any earning dates for DJIM stocks past and present plays you might come across and we will edit them into a list for all to keep track of this Q.  Going forward, we're basically keeping to the same list as last weekend of stocks we are concentrating on, plus a few new ones that appear all over DJIM last week.  Take into consideration some stalling action in the market realistically should come to some of our names as well.  When that happens we wait and see if the stock sets up again for us to enter a buy in. Examples of this are PENX and DDUP late Friday. LPHI was another were patience is rewarded as it put in a 5pt move after we moved in again.  There is not much to add to individual stocks that was not already said last week, nothing has changed really in our thinking towards those plays  A few other breakouts of past DJIM stocks that we have not signalled out but have been mentioned in our forum such as CMED, SPEC should also be included in any watchlist. The most important thing right now is probably to start freeing up some cash if you are heavily invested to use on new plays that will emerge.  It is quite hard now as everything seems to be running and gunning out there, but it is something you might start doing this week.

Trading for the sake of trading....

On surface, this market didn't do alot on either direction today.    When we look closely, it's actually pretty volatile given  where we are, which is essentially the beginning of the earning season.    Some stocks have given up some gains early on but that is just part of the game.    As traders, we have to respect the nature of this game and participate actively as oppose to just spectating as by stander.    The point we are referring to is that we have to actively take profit when things are going good.    For those that have already gotten into this habit, then it's definitely something to treasure for.    We'll take a look at some stocks....

DRYS, this is definitely one of those stocks that have had a tremendous run in the last few days.    We thought it looked a little extended couple of days ago and today it confirmed our suspicion.    At this time, we are going to be shy away from it unless a dramatic move happens to the upside.

TSL, there was plenty of time in the early going to lock in some profit from its recent runup.   If you got a little greedy, well there goes the last few days worth of gains.    When treating the type of momentum stocks like TSL, it almost always pays to sell into strength and buy back on new highs.    Also, it's crucial to setup tight stops and this can save lots of pain for most traders.     This one touched 9 ema today and we'll see how it responds to it tomorrow and next couple of days.

LPHI, this is definitely one of the better, if not the best plays on our screen today.   Believe it or not, it tacked on almost 6 points since our b/o alert of $36 area.    Now, the worst thing you want to do with this kind of play is to set a price target.    In our opinion, it's just not realistic to set any kind of price target.    We go with the flow.    We'd sell some into the strength and if it comes back and goes higher, we'd chase it higher.    So how do you know when the runup will stop?    We'd get worried if it takes out previous day's opening price with a close.      Although this may not work every time as a reversal signal, you can always buy it back(higher) if you get shaken out.    Remember, we are traders so "get shaken out and selling too early" is just part of business.

ASYS, we like this one's setup even though you can say the other solar stocks are in bit of a funk today.    The low float is a definite plus when it comes to trading this stock.  The fact it's still a semi business after all  is also separating it from the other solar stocks.

PENX, this one also did not disappoint and closed reasonably well despite the market's late day weakness.    Based on its recent action, we think the race to $40 range is on for this one.

VSR, some of you have probably been trading this one last little while and so have we.   We think a pullback is definitely needed if this one wants to see even higher prices.   Momentum is very strong and news flow is very steady with this one.    The intraday action has been opportunistic but unless you can stomach the possibility of a pullback, it's better to wait for a better entry.

Market is heating up on the earnings front and even some of the speculative ones have been driven up on positive results.    We just want to caution readers that when looking at the price reaction relative to the earning report on the speculative ones,  ask yourself if the reaction is reasonable.   If you think the reaction is reasonable, then ask yourself again how long this reaction can last and ultimately ask yourself if you are going to be comfortable trading/holding it till next week.     No traders are alike when dealing with any kind of plays.   We just want to make sure that you are aware of the risk and effort that's involved into making a spec. play profitable. 

You want tech earning?

Well, there you go tonight!    The highlight is the two of the biggest technology companies reporting tonight.   We are not going to discuss nor analyze their earning because there's tons of dedicated websites/articles/analysts for that.   What we keep an interest on is the reaction for each respective stock in after hour.     The action doesn't look too positive.    This is probably due to the expectation that's been set in place for these companies.   After all, the rally we've been having the last little while is largely due to the anticipated good results from the tech sector.

For one thing, tomorrow is going to be interesting as we'll be able to see if there's going to be a change in shift of the trading mood.     It's important because when we are in a bull mode( so far), every downtick or dip can be bought safely in anticipation of a bull push sooner or later.   When the bull mood changes to the cautious mood, the dip may not be bought aggressively or at all and this can dramatically lean heavy to the other side of the spectrum.    Of course, we don't want to make a quick judgement either if the market opens sluggish tomorrow because there's still tons of tech and non tech stocks that matter to this market that haven't reported yet.

Bottom line, don't play the earnings before hand and play them afterwards.    For us, it's also true that big companies make up the headline but the small companies make up the profit in our portfolio.     So, we keep in mind the potential change in trading mood but still actively hunt for good quality earnings report from small and mid cap sectors.

DRYS, if you really had to point out a real winner today then this one is on top of the list.   Yesterday's sluggish close is all but distant memory.   Of course, we'd wonder if it wasn't for that price target increase from Jefferies, would all these shippers even go up at all?    At this point, we are simply playing some intraday moves and aren't holding any over night.   We still feel the risk to enter for a long position is too high and we'd prefer some consolidative action first.

LPHI, we are parting away a fair portion of our position in this one.   What this play has done for us the last few days has been nothing short of phenomenal.   It's just a little too far extended at this point.

Solars, if yesterday didn't raise any cautionary flag from this sector, then today it's screaming that the sector is breaking down.    Believe it or not, every one of our favourite solar stocks we've been trading the past while, including FSLR, TSL JASO LDK, have broken below 9 ema today, all at the same time.    These stocks have not closed below 9 ema in about one month of trading time and that's about 20 trading days.    Now, this may not look like anything meaningful to some but to us, it probably means the fun time may be come to an end with this sector and we are shying away from this group untill some dramatic positive catalyst happens.

LKQX, we bought a starter in this one as the reaction to their takeover of Keystone has been very positive.   We are going to be watching its action closely.   This one is sitting on a huge short interest, fyi.