DJIM #18 2007

NUMBERS, NUMBERS...there's the ECO. which include numbers of the crumbling USD, the poor GDP# number released Friday, the poor housing #'s and then there are the EPS numbers which are fueling the market with money that does not want to be left out of a bullish party.  Which numbers are we concerned about?.   The answer is easy as hot money keeps flooding the market, everyone is chasing the EPS numbers of the giants and now the more speculative, smaller caps instead of worrying about all the eco numbers and what they could be pointing to.  If we had millions, billions maybe we'd be concerned about what the eco numbers are pointing to and that includes slower growth/EPS numbers in Q2 and beyond, instead our goal as always is to capitalize on what we are given today, tomorrow and taking advantage of it fully. Go hard or go home is the premise here recently. You will not need to go hard or stress later in the year, instead you might go on a extended vacation if you are capitalizing on this bull run we are experiencing.  Simply, companies which are producing results, giving a good outlook are being rewarded big time. We can't ask for anything more as this is DJIM's niche!...So enough of the banter, lets get the nitty and gritty and that is the stocks we have our eyes and hands on..

IDSA, we discussed the possibilities of this beast Wednesday night and Thursday we all had a chance to accumulate in the $12's. We are patient and wanted IDSA to maintain some integrity by not finishing the day over $15 and then be prone to a sell off Monday if it was included in IBD so soon.  When we started buying Thursday, all we had hoped for was a decent finish in the $14's come Friday.  IDSA did turn out to be fun, even if an hour or two before we thought on Friday and made a couple of tries at and over $15.  We anticipated a roadblock of sorts at 15, it wasn't major but you have to understand many were happy to get out here knowing many are anticipating this level.  We did some selling in this area as well, 20%+ in a few days was sufficient for now.  Don't forget many got in even lower Wednesday on the results and were willing to sell around $15 for even larger gains.  We are glad to buy any dips and now look forward to IDSA having 5 full days of trading to rock $15 and beyond. The best it could have done Friday was finish in the $15's, but with a week to do some damage we think it has a better chance to go into the high teens in a somewhat orderly manner.

TO, easy symbol, brutal name Tech/ Ops Sevcon..hey but with a 2.2mln float and nice earning you could call yourself whatever you want!. This one has a string of EPS somewhat similar to TRCR with the last being in the mid-to high teens.  It also just put in it's first 10 mln revenue Q like TRCR. There is also 15% institution ownership with a few names we are familiar amongst the holders. This gives this unknown company some respectability. We feel with fast money back in the market chasing an IDSA or two, a play like TO should get some interest in the week ahead. You don't if you don't try!

CMI, guess we'll look at this again but after giving a ride from low $90's to $107 off the opening bell, you'd have to think you are not going to match that any time soon.  So why bother going back right away!. The co' beat expectations and gave a rosy outlook.  That was the spark to ignite what we thought would be a nice short covering in the morning.  As we noted in the forum that morning...more goes into finding a play than the headline numbers in many cases.  It would be too easy if all companies with excellent numbers did the same thing.  CMI had a big run recently due to M&A rumors, these rumors evaporate most of the time and this idea brings in shorts expecting the stock to come back to reality.   Nothing like a kick ass report to get them covering in a hurry.  This was the idea behind the trade for a early morning move.  Anyways this was exciting and you could put this one with the MFW's huge day recently when we gave out a play with something like 20-40k volume before it exploded to record volume and big quick gains.  If you're not pocketing these types of gifts and moving on or recognizing them as an opportunity to jump in as soon as huge momo comes in.... something is wrong.  Also, if you're still scared to buy expensive stocks get over it.  These expensive stocks present incredible opportunities.

VSEA, a semi beat by 3c and guided higher. Not big fans of Semis here for the longest time, but with market the way it is we need to diversify some and see what the bigger names are capable of.  Besides, this one was a nice chart heading into earnings and this weekend moved to #4 on IBD. A few firms already reit it a buy and boosted price tgts.. We bot late, low 69's.

MFW, a familiar name we bot back Friday. It kinda pissed as off as we only had a few shares and were ready to add for days $60-62 and now had to deal with a sipke at the open to as high as $68.  Well..at least we know the Perelman money was smarter than us by picking up $12mln at $60. We like this kind of news and bot mid day off the pullback.

TRCR , quite the nice run in 4 days. We said we'd be looking to sell some if it reached the 14 area. Friday it was 3 plus points over our alert on it and we booked some profits into the weekend.  Nothing wrong here, just the right thing to do. We'll be back.

SYNL ,what can we say about the last 6 trading days, except its a pretty thing. We're all probably enjoying this move.

DXPE, was a casualty Friday but you don't need to be one.  Past knowledge of DXPE volatility puts this move into perspective. It's nothing but profit taking off a 8 point move. One way you might avoid more damage than you need to is set a mental stop in the area of the previous days long stick around that days low and or open. This is not a hard rule but if you had this point in your head it might have saved you a few points Friday. For us as full time traders it is of course easier to exit, if you can't deal with these types moves it is best you stay away...or you just accept them if you like the story and stick with it through the bumps in the road.

A few names for the pillow are acting well, past and present....VE hit 83, HTC near $24, CPY exploded Friday to 60's. These stocks have never seen RED, as in lower than our initial DJIM buy in's ( VE-$68,HTC-$17, CPY-$43) besides returning 20%-40% profits in months.   You can't beat that for a safe crawler. We try to give a bit of everything to satisfy all tastes.

One discussed in the forum early this week kept going creeping up and that is TWIN. ...... Remember SYNL EML were these pillow stocks when first intro'd here.  We can't discuss these much as they trade so thinly day after day, but for those of you with a longer term view on some of your positions these have been or are great stocks so far for under the pillow. An extra screener for these types is best to keep track and visit.  ABM, has pulled off a NCH and a nice weekly chart as well.

DJIM #20 2007

Rundown of DJIM's closely followed heading into Mondays trade...

TNH, definitely one the big winners on the week with a 24% pop.  We profiled Terra Nitrogen, fertilizer maker, back on April 8th (DJIM #15/#16), we said if you catch it on the right side, it could be quiet the ride. The right side has been now with Nitrogen in great demand and because of NG pricing.   The stock closed at $95, up over $30 since April notes.    Remember, she can be the volatile one and the higher she goes, the higher the chances of seeing greater volatility.

NGA,  though this one did not finish over $15 as per IBD requirement,  it might as well have finished above it to ease the suspense.     So is this more than and IBD play or not?   At this point, who really cares?    As long as the volume + price action do not die down, we are going along with it.   What we feel is that there are momentum hedge funds behind the work of this one which explains the consistent volume.   We like this one because of its relative liquidity compared to some of the other low priced IBD plays.    Why does it matter?   For those of us who trade more than a couple of thousand shares at a time, this is the kind of action that can get you in and out with relative ease.   What we are watching out for is the blow off top volume, as a warning sign.   So far, so good!. Our note pre market indicated some selling might come off the insider selling news.  This happened and provided a nice dip into the $12's early on.    Hopefully, some were able to get more there or low's $13.   The fact this occurred probably held NGA off $15 for now..   Why?.    If you bought high $12's, very low $13's Friday, would you not have sold at the high $14's if you loaded up in the morning???.  We did some.   Once this moved beyond $13.50ish, you knew new money would be coming in so not to miss the run to $15 and above.   No better place to sell for someone making a morning buy in the 12's- low 13's, don't you think?.     We're patient.    IDSA now NGA.  In so many ways this played out just like IDSA last week.    Hopefully, you were prepared to trade it smartly after last week.

IDSA   so the stock made it to IBD#43, a week later than it was "supposed" to.  Lol   Well, things will definitely get more interesting from here.   We think the exposure of IBD does bring more positive things to a stock than not.   It actually brings this one to many more traders' attention.  The OS/float definitely stands amongst the IBD 100 names.    As long as this one is getting more exposed, it's unlikely that the play goes away anytime soon.   We are using our usual approach with this one from now on and look for new highs as an excuse to add and 9 ema as key support.  Simply, the traders gut told us this was the one under $15 that was going to get riled up friday in our morning note.   We added in forum the night before to a IDSA question..Needs volume!.  We pointed out volume was at the previous days high quiet early, Friday. This was indication to us more was to come and a good chance this was going to take IDSA beyond $15+.

FWLT, wow is the word to describe the action in this one.  In our opinion, this is the kind of stock that's much much easier to play compare to NGA, IDSA and definitely the SIF's of the world.   Why?   This one is a liquid monster, an institution's heavy play.   Even as retail trader, we have no problem of going big in size and playing with the big boys.  You can't do this on a SIF type.   Of course, if you have a smaller sized account, this one still provide lots of fireworks even for small lots.  For every 100 share lot at $78, this made you $1800 in a few days.  Again, we say, don't back away from the expensive plays such as this and the MA's so easily.... As we tried to point out, we felt FWLT had more short term upside potential from the pre-mkt prices of FWLT ($78) compared to TRT's (19.50).   Based on closes Friday, FWLT is up 22% and TRT is 12% from that  possible morning buy-in and has been way more liquid to trade.

LXU, this recent DJIM pick up is gaining traction and starting the ride the coattails as many are starting to see it as a Ag play.  Their chemical biz seems to be thriving as seen by EPS results and it's definitely one of our favorites.   The ticket here to consider!. POTash is around $200, TNH, is near $100 and if I might have missed the ride, maybe my only only logical cheap play here might be LXU??.   Hmmm.    It is in top 5 performers in the Agriculture section of IBD movers.   Besides, there is a new #1 IBD Industry Group and it is Agriculture and Fertilizer...really, we're not fertilizing you!

SPAR, this pick up pre market the other day at $30 was a quick bump to high of $32.70.  We sold some Friday into the Cramer push and later picked some up cheaper again.  Selling into strength generated by outside influences, such as Cramer is a no brainer.  This one falls into another sector that is thriving.   We were watching this angle since AH takeover by bringing FRPT into the DJIM fray Monday. SPAR is intertwined here as they are the chassis maker dealing with FRPT.

CPY, we put this CPY back out at $80 Friday on alerts as a buy in again.  It manged to climb another $3 bucks higher at one point.  Just keeps on ticking and it is more than the retail investor buying 100 lots here that is still driving this higher at these levels.

TRT,  we are holding some TRT but on a short leash to see if a IBD crush comes.  The play here started back in 2006 based on EPS and their China connection starting what we thought would fuel this compnay.  We played it now for another 2 Q's  and this is the first Q that we saw revenue slow down.  It was actually a tad lower sequentailly and Product reveune dropped some 20% sequentially.    So has the Asian buzz hit a wall as these numbers might indicate?.    At this point after 3 excellent Q's,  you should not be looking at YOY Q numbers here,  but sequential growth.   If this was a big Semi name that showed no sequential revenue growth,  besides the under 300k in net income, it would likely been a ho-hum report as analysts would not be looking at YOY if they had been placing estimates on the stock for this Q.    They would have looking at the 3 previous Q's since we've been following it and their expectations would be based on that!.   Simply , sequentail reveune growth has been curbed some it seems for now.   $6.4>  9.5>  9.9> 14.06 and now 13.6mln in revenue for the last 5 Q's.    An advantage of no analysts covering a DJIM stock is seen here.  The problem is the company gives no guidance, so you don't know if the revenue has hit a peak and if EPS next Q might hit a snag as well.   Anyways, we're in for some, this just ain't one of our top holds at this time.  We'll see how it starts to play out early in the week.

SPAN, a May pick up( profiled in Alert sec), is the little engine that could, a slight pullback mid week and then a NCH to close out the week.

SIF, a hot market definitely brings out hot money in the micro caps. At this point anything new is beng chased up if the headline numbers stick and we joined in with some of you for a quick trade.   Definitely, some of you guys got more out of it than us!.   Great!.   With so many plays on our plate Friday, we left this while the exuberance was high and while it was still possible trade the bigger lot sizes to make it worthwhile.  We don't know if that will be the case by mid-week, if we wanted to sell a big lot hold at a decent price.  Time will tell.   You see, some plays are taking EPS to a different level in this market, as in potential one Q wonders being run as if they will be what TRT, BTJ, DXPE, NGA in the beginning of their cycles.  Those companies were turning around and you could see by their growth figures.  Not only YOY growth, but sequential revenue/EPS growth as well.   This is how companies become IBD inclusions.  We see pretty stagnant revenue growth Q over Q's at SIF with one good EPS Q under it's belt now.   There is no saying this company can pull off another going forward, despite being in a good sec.   We don't see it as 2 Q's with upside EPS, last Q was almost all government grants income that made up the EPS #.  We're not knocking the company, we're just saying it's not for everybody to trade here, especially if thinking one EPS Q will make it the next NGA, BTJ, DXPE etc.  This simply means for those considering playing SIF starting Monday,  be careful if thinking this almost 100 year old co' will become a solid player into the next few Q's.   DJIM members need to differentiate the type of plays conducive to their style and abilities.  This is all we are pointing out here.   For those giving it a run....keep pushing and we might be back to help out.   IBD numbers are on equal terms to TRT's and made it on Aerospace IBD hot list this weekend.  Institution holdings are about 25% in this name, if their Blackberry's were not working overtime selling Friday, this upcoming week might get some of it.  If the shares get in retail hands, who knows what can happen in a happy market.  Will leave it to the speculators for now and concentrate on companies producing revenue, EPS growth Q after Q.

CROX FSLR TRCR ADPI HAYN NTLS MA SYNL, all behaving fine after being followed closely here following their EPS this Q.

HDNG TWIN FTK  added to IBD or moving up as in HDNG case after EPS #'s last week.

This market is moving clearly off the earnings of S&P co's, small caps etc. and we at DJIM definitely are simply in the right niche at the right time!