here comes the earning season...

Perhaps we just forgot how much fun it is to trade during the earning season the last few weeks.    Good thing is, earning season is almost upon us and in fact, we even got a taste of what may be another opportunistic season tonight.    RIMM set it off tonight with a very strong report and the AH action more or less confirmed people's belief.     This is something all of us have been looking forward to for a while now.     Well, enjoy the weather and the up coming holiday because we need to buckle up right after that for some potentially intense trading afterwards.

Today's the Fed day!    Did most people even set this event on their calendar?    We certainly did not!  We felt the action today is more or less in line with what's been happening past few days, Fed meeting or not.     In terms of individual action, we have to conclude that it's a productive and positive day for the most part.    Here are some notables from today...

PENX, this chemical co. came out with a very strong report in the morning and we felt the report is strong enough to warrant our attention.   We bought a starter in the early going and added as it strengthened.     Given the volume and attention it received today, it's very likely that this one is being put in play by many traders.    Just like KMGB, LPHI in the past, we are going to be chasing PENX aggressively on strength.

LDK, ok, the closing price may be a little fishy but this one did stay relatively strong for the most part.   We added some during the day and will look to trade it higher as long as the solar sector is still in favour.

TBSI, this one definitely is trading a lot better the past week and two compare to the time when we started trading it first back in mid May.   It notched a new high today and we added a little to go along with it.

SNHY, this play has been consolidating for last while.   It broke out today and stayed strong till the end.   We are not sure if this breakout can generate a nice follow through but we are willing to bet that it can.   

DJIM #27 2007

One thing is for sure, the only thing that can seem to wake people up in this market is "earnings"!    The past week was filled with some dramatic volatility.   In the early part of the week it seems that market was ready to give up.    We had back to back days of strong opening and a very weak close.    Both indices were flirting around 50 ema and it just looked that shaky.    Come into rescue toward the end of the week is of course the prospect of the earning season.   The fed decision is once again a none  factor in this market this time of the year.    We feel many people are sitting on the sideline waiting for some good earning opportunities to get into.     From the big cap earnng front, RIMM definitely sets the tone as well as the benchmark for others to follow.   20% gain in one day given RIMM's market cap is still a very big deal, regardless of its momentum status.   To put this into perspective, GOOG has to gain over 100 bucks in one day just to gain 20% and that'd be just something unthinkable at this point of GOOG's growth cycle.

So what are we really looking forward to at this point?   Earnings, of course!   The earning season usually starts with Alcoa kicking off and that comes around second week of July.   Our game plan is the same as before, go after the winners early and aggressively.   If the apparent "winner" does not get the kind of attention we wanted, we simply move on for our next kill.    With earning season, we'd usually be busy enough to trade multiple earnings winners at same time.  So rest assured, if one doesn't work out, there'd always be the other one or two that will work out.    Now the key in trading that kind of strategy, is to stay with the winner, at all time.      We had a little taste of the earnings drive last few weeks from the likes of LPHI KMGB TNH FSLR RCCC TBSI... etc.   All of them have returned substantial gain given our usual time frame.      So be prepared and be ready, both financially and mentally, because the next 3 to 5 weeks of trading is probably the only trading matters in the summer.

Here are some stocks that are worth reviewing over the past week....

PENX, one thing about this earning winner is that it never had this kind of volume in its past quarters.   Perhaps, this quarter's number is just that good, or it is the fact that it's in a sector people really go gun ho about.   In any case, we the momentum traders may also have something to do with its latest volume surge.    Well folks, this baby is in play and that's all you need to know.     Remember our favourite strategy,  if you missed the first runup lets say from $24 to whatever price it stalls, the first pullback should always be bought, aggressively!   We are fortunate that we caught majority of the move so far but the rest of our game plan is still the same.   Just because we did well the first run up doesn't mean that we can slack off on the second time around.    So keep a close eye on this one and trade on the long side aggressively.    Always put the 9 ema up and imprint it in your mind to know where it is at all time.    Nobody wants to miss another RCCC or LPHI type of move again.    The funny thing is, at this point, we don't think people even care about their actual eps number anymore.   There's really no need to extrapolate their number to calculate a "proper" valuation price or assign P/E or whatever.    Know this, this one is in play and professional traders like us and others are trading sizable shares to drive this one higher.

KMGB, almost a month ago, this one came out with a strong report.   One month later, this one is roughly 30% higher, and it closed with a NCH on Friday.    Ok, we didn't stay in this one the whole one month.   As far as we did, we basically traded two runup.   The first runup was from the initial earning/IBD and second runup, which we are still in it, started couple of days ago as per our alert.    The coming week should be interesting since this one did not make it to IBD100 again but we think this shouldn't be an issue any more.    Float is pretty tiny for this one so as long as the chemical sector is in play, we'd like this one's odds to go much higher.

TNH, speaking of chemical sector, this one is probably the epitome of chemical stocks during the last three months or so.    The recent 10 point drop in one day may set a warning sign of its extended runup but we are still keeping this one as one of our favourite trading stock.   If you look at its chart, it hasn't closed "below" 9 ema ever since the breakout area of $90 and we think as long as this is the case, this one is still relatively safe to play.    The only thing of concern lately is that the volatility is getting to the extreme side of things and it may eventually crack its uptrend completely.

TBSI/DRYS, when shippers move, they move together and we like these two the best.   They both notched a new closing high on Friday and we'd see if this generates a new round of enthusiasm in the coming days.

FSLR/JASO/LDK, so once again solar plays have been hot lately.   Out of all of the solar plays we have touch based before, these three are the closest to their respective all time high.    If anything, we'd be trading among these three when the sector is having a good day.

The importance of holiday trading...

To say that we had a pretty good day today simply does not do its justice.    What we had today is one of the best days in 2007, in our opinion.   This is not an exaggeration.   Of course, you still have to be familiar with all of the names that we have been trading during the past few weeks, in order to fully appreciate what we feel.     What caused the market action today?     Two words, holiday trading!    Still, this is just not just any holiday trading.     In order for a good holiday trading week to work, we definitely need some ingredients.    One, there has to be money waiting to be put into work.   Two, market has to be near at or close to the high in order to attract the momentum.  Three, there needs to be something optimistic(earning season this time) that people can look forward to.    Basically, we had just about all three ingredients and we kicked off this holiday trading week with literally a bang.     This is back to the topic why we are stressing the importance of holiday trading.   Now we know what makes a good trading environment, and if you are like us dedicated professional, or if you simply have a passion for trading, this is the kind of week you just CAN NOT let go by.   Folks, taking a much needed week off and enjoy the weather and other activities is fine if you need it badly.   For others, this is a week where you can probably take some serious revenge from this market by profiting from quite a few opportunities.

Yes, market is pretty forgiving right now and many traders are doing just fine.    We at DJIM, however, feel that this is the kind of time where we have to absolutely out work and out perform other traders in order to make our lives a little easier when the going gets tough.    See, it's always about making a killing during an easy trading environment and survive during a tough environment.    If you can't make a meaningful percentage gain in this kind of market, what odds do you really have when the market heads the opposite direction.

Our game plan, is to lock in those potential huge winners with sizable positions and ride it on the back of this favourable condition.     We have been ultra aggressive today in terms of adding positions(mostly familiar ones) to our portfolio and doing it with a much bigger size than we'd normally do.      There are simply too many stocks to name at this moment so we are gonna highlight some worthy ones tonight....   if you have built your watchlist around DJIM names last few months, you'd know which ones are doing good today.

PENX, what may take some stocks a year to accomplish took this stock only three trading days to achieve.     Sure, I'm only talking about its 35% runup since the time it announced its earning, excluding its gap gain of 20% off the news.     This one is just HOT!     This stock actually surpassed our most optimistic expectation up to this point.    So, the rest will be just so easy and simple at this point.     We'd stay aggressive with this one.

TNH, holiday trading brings out some animal spirit out of many stocks and we didn't expect anything less from this one.   This one got a NCH today and closed near its high of the day.    Given its past performance we'd expect some good follow through off a good move.

LPHI, this one still needs to battle over 9 ema and today may be a good cause to get back in some with the assumption that the play is not over.   We did buy alittle back today but we'd watch this one closely in case if it shows any kind of weakness.

CUB, for a while, we felt the play might be over but today it literally breathes new life into this one.   It took out the $30 mark convincingly and it looks as though it's ready to start a new leg.   Again, this is an unusual kind of week and we'd always bias those that breakout and make new highs.

FWLT, this one spent literally a month during its current trend line between 100 and 110.   Currently sitting at the upper end of its trend line with a strong close, again given the bullish sentiment from the market, we feel this may be able to breakout cleanly.   We bought some today and looking for the breakout.

RRST, we actually traded this one a while ago but it didn't do much for us.    We are back in it again and thinking this time it may get some momentum going.    This one actually has a pretty high IBD rating(98 95 as of tonight) and we think with the recent RS, it can potentially move up in ranking.

FSLR/LDK/JASO/TSL,  so we added TSL to our mix of solar plays today.    This group basically goes with every other momentum plays.    When market is up, count on this group to shine.

Some of the other stocks closing at high or strongly and we've been trading actively include DRYS AZZ RIMM GTLS RCCC SNHY BTJ TBSI TRCR MR EDU...

Calm before the (earning)storm..

Undoubtedly, the next couple of days will be very quiet as we imagine most of the market participants will be away with their family.    This is not to say that opportunities will not be present during next couple of days.   On the contrary, we think there will be plenty of opportunities and the main concern for us will be the liquidity.    The lack of liquidity means that some already volatile stocks will be push to either direction with less volume.   This may create some "false" move but as long as we are aware of what's going on, we can take advantage of it.     What we are going to do is to keep our eyes on those that have been active during the first two days of the week.   Stocks such as TNH FSLR JASO... and even the ones that have been hot past few days BTJ PENX SNHY etc. will also be on our menu.    Just make sure that you are aware this is just holiday trading and take advantage of it but not over extrapolate things too much.

oh yeah, Happy Holiday!

One more day...

and this week will be in the history book.    So far, so good!    We aren't suprised by any of the action today but we are alittle surprised by the actual trading liquidity out there.   Today can definitely be passed as a non holiday, in terms of volume.    Does that mean most traders are done with their time off, perhaps!   Or, maybe many of them never even left their trading turret. lol    So, we basically had another round of good action today and helped mainly by the technology stocks.    When the technology sector shines, just about everything else shines too and also every one is in a good mood.    We are  quite busy with trades today especially after the lunch hour.    We expect the same kind of enthusiasm would return tomorrow to cap this trading week off as a very memorable one.

Some stocks in action today....

DDUP,  this is a recent techonolgy IPO that specializes in data storage.   Ok, this is about as much fundamental info we are gonna be concerned with at this point.    The stock basically held the $23 mark very well since the IPO day and today's basically the first day it closed well since its IPO day.   Everything fits the scenario well for this one.   This is in tech sector and it's a recent  IPO and sector is rallying and chart is good yadi yada.   So, we started a position near the high $23 and we'd be looking for follow through.   If the follow through comes, we'd be adding/trading it aggressively.

PENX, last Friday, we mentioned that we didn't want to miss another RCCC or LPHI type of move.   Well, it looks like this one is more or less getting to become one of those moves.   Fortunately, we didn't miss a beat on its move so far.   Stock made a new high today on decent volume.   How high will it go?   There's really no need to ask that question now, is there? lol

BTJ, there's a reason why we only write about  those stocks that did well.     Imagine if you are flat beginning your day, which stocks would you actually go after?   We'd only stick to those stocks that are green and hopefully strong till the end.     This one fits into that strong stock description perfectly.    We aren't buying and holding this one, as you'd imagine.   We are basically using its momentum to flip in and out constantly and if you have the time or will to trade this type of stocks, then this one is for you.

LOCM,  finally some people may wonder why we alerted on this one late during the day.    Basically, it's a trading opportunity and to us we are compelled to alert our members.    First of all, this one is not about earning and all about speculation.    We aren't looking at anything beyond its action toward the second half of the day.   In our opinion, the kind of late action this one was showing warrants a potential gap up the next morning.   This is strictly from our experience and of course nothing is for certain.    Still, we had to trade according to what's more probable to us.  This one is definitely a trader only play and we'll see what the morning action brings out.

DJIM #28 2008

In a typical holiday week trading fashion, things just went by quickly.    At the beginning of the week, we stressed out the importance of holiday week.   True to our belief, there was no shortage of plays and many were very opportunistic.    As the week has gone by, we are basically back to the point where we expect a flurry of earning reports.    Unlike the other quarters, this earning period seems to last the shortest with possibly the worst market reaction.    This is typical of this time of the year.    However, judging by the enthusiasm we've seen during the past few weeks, it doesn't really feel that we are slowing down, as far as trading goes.    Perhaps this has alot to do with the fact that the market is sitting relatively near the year high.   When the market is at or near the high, there always tend to be opportunities, and people always tend to be optimistic and are willing to put money into work.    This is just the way our psychology works.

So far, we had RIMM to thank for.   In the coming weeks, we are going to see more reports coming out.   Some reports will be praised and some will not be.    As far as our game plan goes, we are going to sift through reports that spawn the strongest trading reaction, positively of course.   We'd try to catch those that hopefully give us enough time and room to play.     

here are some strong plays from last week that may carry over into the coming week....

DRYS/TBSI, these two are the only two shippers we played last week and both of them pretty much closed out the week near the high.   At this point, we like DRYS's chart slightly better as TBSI looks a little too extended at this point.   However, we've learned too much from the past that we can only be so cautious.    A play will run its course whenever it decides to.   For us, even when we decided we should raise our cautionary flag, we'd still only keep it in the back of mind and react quickly once the reversal does happen.    Basically, we just have to be better prepared when the action gets too extended.

LPHI, this one is beginning to look better now.   After its initial sell of and the breach of 9 ema, it seems to stabilize the last few days.    If it can break the $36 area, we'd be back in full force.

AZZ, this one had a pretty good earning reaction and last few days have just been phenomenal.    It's now back near the old high and we'd see if it gather enough momentum to start a fresh legup from this point.

FWLT, volume didn'st seem to drop that much last week.   This is a good sign as the stock basically broke out from its consolidative trendline.   How high can it go or will it go?     We don't know but we know that we'll play this one untill the music stops.

FSLR/JASO/LDK/TSL,  we added TSL to the group last week.   This group has done some nice work last week.   As long as the 9 ema is in tact, we are trading them actively.

PENX, can this one pull a LPHI or RCCC?   In honesty, we'd like to see this one consolidate a bit.   The sooner it can consolidate, the better chance it can pull another runup.    We are keeping our eyes on this one very closely.

DDUP/SCOR, these two recent tech IPOs are hot on our list last couple of days.   We like their action in conjunction with the rest of the tech sector.   We think the runup will definitely carry into next week and we'd be trading these two aggressively.

Other notable gainers last week include SPAN MBLX GTLS CUB BTJ TRCR...

..How high can they go?

The better question might be... is how high can you go with some these solar stocks?   Remember the trip down can get pretty trippy when you are dealing with momentum stocks that have powered up as much as some of these have lately.  Still, a new twist to these big plays is that a few of them produced contracts today to help push them. FSLR got the ball rolling announcing deals worth around 1.3 billion with renewable energy co's out of Europe and TSL followed up with more deals. So are these deals enough to push these even higher or do they just tap the recent run?. Time will tell, but the best thing is to have these on a tight leash..in other words trade them, get in and get out with the tide.  Another positive for FSLR and JASO today was the intervention by a few firms to raise price targets.  A RJ up to $48 really got JASO clicking later in the day.  Are these firms late to the party or are they going to push these higher?.   Lots of questions, lots of momentum and even some secondary solar plays are putting up charts at the close that can't be ignored.  LDK, HOKU are two examples of NCH's, nice charts that can't be overlooked even if they are solar powered.  It's really up to the individual on some of these as to your comfort level. If you've been following them daily off the Journal since the 25th of June, you likely took some of the table today or plan to tomorrow into any morning strength or maybe not and you'll keep riding the momo for as long as it lasts. Just be on guard is all we can say on some of the flying solars.  Hopefully, the contracts and firms getting involved further at these lofty heights is enough for this to continue.  Lets hope for more contracts and more firms upping the estimates/targets. These stocks are not going away in the long run, they came back from the early part of the year when we were trading them hard and now is just another opportunity to capitalize. There will be others down the road if this detours any time soon.

Now..back on planet earth this Monday. We didn't wake to a slew of M & A deals, but you have appreciate the huge buybacks today by JNJ/COP.  Besides, earnings/ M&A action in 07', buybacks have a been an important catalyst as well.  If the firms are buying back at these prices, well then the investor asks why shouldn't I?. It also didn't hurt a 20% premium was put on the head of FDX by a weekend publication.

CMI, this is the 2nd time we hit it nicely off an alert in the past of months. We liked how the stars were aligning with a breakout on the heels of a Bear Stearns upgrade. What you can't ignore is a 10 point move and that it is best to take profits along the way. A steady move such as this allows for entry almost at any point to then take a few points off.  If what you had hoped for in a few days happens within hours...all you could do is take profits somewhere within todays price range and look to re-enter another time.

SPAN, this was highlighted a few weeks back in DJIM #26 as a potential play from around $24. Today it tacked on another 5% to a NCH at $30.60. Buying the pullbacks has been a profitable trade in this one. Maybe we'll get another one later this month.

PENX, TBSI, CUB, DDUP ..usual suspects had nice days again.

And if there is ever any reminding needed of why we trade BTJ the way we do (this sort of came up recently on forum)....well, today's action is the simple reason why.  This is also they type of action some of the solars are capable of sooner or later.

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. 

..nice day in select group...

Another round of M&A activity on a Monday gave the markets reason to bounce after Fridays sell off.   However, the taste of disappointing tech earnings lingers on as the NASD gave up most of its gains by days end. Somewhere in the middle of all this were a bunch of closely followed DJIMstocks that had some fabulous action.

TXT, after consolidating some of its gap gains off earnings, today it showed some of it's potential by climbing a steady 3%. Now we see if it can take out the highs on earnings day and gain some momentum to which we can add to.

DDUP, we`d love to see what this one could do with some volume. Could easily be a 2-3 point day in store for it if the volume actually showed up.

TTPY, this newbie from last week pushed hard early to mid 26's on the heels of its late day push Friday.  We'll see if this action puts this IPO on some trading screens by watching the volume before adding more.

TBSI, DRYS, this incredible action continues. We`ve outlined previously how we`d approach trading these at such lofty levels.

LDK, we talked about the targets this one got, well today at least one of them got hit. Unfortunately, it is really the only solar doing anything at the moment.  Maybe this is the way it will be until FSLR reports on the 31st.

PENX, looks to be back in the game as it closed with a NCH.

CMED, tacked on about 6% and could be the beneficiary of some of the ISRG action.  Reason being it has been mentioned as the next ISRG.

With AAPL to report on Wednesday, we`d put good ole`SNCR on top of your trading list for the next couple of sessions. Today it gapped off an upgrade related to the iphone.