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.

DJIM #6 2007

We thought we'd get this out today while we're all in a sober state before Sunday's game..

Now that we are in February,  we'll save you from listening more about USAP CCF MFW our core of big winners in January.  Well, maybe for a few days only!.   Nothing has changed since the last write ups, so glance back if needed.  Instead on Super Bowl weekend,  we'll discuss some new and some neglected DJIM names...

CNS, this asset management co' has taken over our money after the demise of GROW.  We've been in and out before recent earning and have been waiting for a signal to enter after EPS.  The day came on FED Wednesday (Journal) as it attacked the congestion in the low 48's seen after earning.  A quiet Thursday and then a nice move Friday.  We like, We like as a core hold.

ALGN a buy in alert low 16's off earning that knocked out estimates has playing ping pong between $16 and $17. We've never traded this before and are closely watching trying to figure it out.  As of Friday, we think there is a possibility of some action if it gets just a little bit higher. BT has confirmed this with a chart look as well.   If we don't get a move early in the week, we'll cut out if we don't see some momo established again.

AVZA an alert at the bell Friday that we soon bought into.  We're not so thrilled with techs but a turnaround is seen here with this profitable Q and guidance equal to this Q.   A nice pop from 5.50 to 6.50 before tailing off.  We traded some of AVZA and kept some to see if we can make it 4 for 4 on cheapies following on the footsteps of NWK, TRCR TXG!.  Basically, we are using the same strategy on all of these.  Best to see the latest on the TRCR, TXG's first days.

SILC, is an Israeli tech just small enough to avoid the institution rush to sell off after earning.  We are very familiar with SILC having traded it from the 6's and were in no hurray to pick up till Thursday buy in alert end of day.  This company is what you call a comeback story,  the founder brought in a top manager and marketing exec.. Yep..the stock was less than half a buck ...4 or 5 years ago with a market cap less than a million, now its probably over 100mln.  They reported a .20c Q/.49c on the year.  Maybe this becomes an IBD contender?.

T'N'T, talk about cheap thrills'!.... we have to group these cheap DJIM winners together.  First there was NWK we started in the 6's and alerted last Friday before this 10% week.......then there was TRCR and last week a spec buy in alert at $4 of TGX.  We noted Thursday on TGX and taking profits with a quick 20% in a week,  we did the same on TRCR again Friday which we started at $6'ish and alerted again to look for action in $6.70's last week.    We are looking at these day to day now with bigger pieces being sold.  There is nothing wrong on the fundamental side but we feel they are getting a bit extended short term.  A nice pullback or two, we wouldn't mind in a few of these after the 20-40% moves.

We got the cheap cornered,  but what we really like most is the classy ones to hold tight.  They are expensive in many a traders eyes as some just can't see past a under $10 stock.   We love these types.  We bought the starters in ENR at 83's, the VARI 52's, the VTRU $43's and have been adding along the way.   These have produced nice charts since entry and returns of 3-8% between them quietly.  We 've sold most of the VTRU the last few days after 4pts in 7/8 trading days but we'll look to buy back in if NASD internet names get some love.   If the market continues to go our way, we expect the institutions to want these types of companies on their books and that's why we consider them nice longer term hold potential.   RESP had the best start but now is lagging the bunch.

OEH , the lux lodging stocks have throwing up good numbers (HLT HOT), eventually this hits secondary names and one we started in again is OEH as revenues per available room look to be higher in '07.  If the institutions do their homework, they'll likely want to hold this one into earning this month.  Actually, this one has so much institutional interest(96%) already it might allow them to walk it up.  We are looking for this type of discovery here.  A slow and steady move into earning off these new highs.  If this 96% ownership is too much or the price is a little expensive have a look at..MHGC

MHGC trades under $20 and we started a position late Friday.  Think Super Bowl, think The Delano and then you'll see what MHGC is about.  The chart looks jus' fine and the 25mln float is jus' fine.

It's pretty easy to break up the trading stocks between those you want to hold over the longer term. We have the core which now includes CNS added to CCF USAP MFW,  the last 3 may need to rest here and there as January has been nice to them and us all.  The cheapies are to trade NWK TRCR TGX, you can throw in HRBN AVZA even ALGN till we see a trend or not.  Plus, we have the not so volatile more expensive names such as the ENR VARI VTRU VE.  There is a fave steel play USAP, a fave aluminum play CENX.  A fave oil play in the steady MTRX.. if you want to carry such, a fave Russian telco in GLDN, a potential lux lodging play in MHGC OEH.   Basically there is something for all types of traders/investors.   We're not throwing out the SWIR's out of sight, instead we'll be digging for these types that are not getting love off earning as potential plays in the very near future.

CSCO who?

CSCO who?...Paulson who?....Bernanke who?....seemingly this is what the DJIM core and secondary holds kept saying all day.  Absolutely...no consideration or respect from DJIM stocks to the rest of the boring market or its talking players or what is coming AH's.  What could we possibly say tonight, except wow and laugh a bit.   The funny thing .. this is not first time we have seen this divergence between DJIM stocks and the weaker bias in the market.   If or better when the time comes that we come down to a few positions or go to mostly cash,  you will recall these days and ask what was I doing wrong?.  Basically, if you're not capitalizing on these moves it is a missed opportunity and you've simply been in the wrong stocks.   It's easy to blame the market instead of yourself!.   The interesting thing is these are not one day wonders,  these are for the most part continuation of moves in new DJIM stocks from 2007 and some late 2006.  

Let's take USAP and another new high attained today..it's only been wined and dined here from our first buy in high $36's....we don't expect all to make 30% so far in '07 on it,  but surely you have enjoyed more than your share of points on it...Why else are we all here?..Earning gems..NO?.   We're not here to wait on double bottoms, we prefer to toast a double shot of something at the end of the day after discovering a earning play early and hopefully sticking to it as it is discovered by your neighbour...and if you don't like neighbour there is nothing like selling it to him or her at the top!

Why do we keep an active chart list even when we sell most of a position...Example...VTRU

VTRU that we sold off most last week ( also an earning play from $43's)..simply, you take your points, your profits and watch list after...why?...so you let it consolidate a bit and then try to catch another move...WOW..we said it was looking better at low 47's in the Forum...minutes late this one really broke out and was nearing $49 end of day with volume.

CNS...little reaction after stellar earning but we held it on close watch looking for a turn.  It came last week and noted our buy in...4-5 pts since including another alert this week. You gotta love the last 4 day sticks on this stock!.

CCF MFW, we mentioned we were selling some of these off yesterday. Today was just an opportunity to rid of some more at higher prices or as in MFW case trade some.  After all was done, we probably came out with a bit more MFW than we had yesterday at the close.  We are not arguing with these going higher,  but we have to realistic especially in a market showing a weaker bias all day with stocks covered here from 27's (CCF) and MFW ($28). These are 20-30% moves just in 2007. 

Speaking of selling, GLDN hit the 57's today without noticing where its' trading..the flat NAZ!.  Besides the run from the high 30's here, this was alerted last week at $53  and yes we took some of the short term profits.  If you've kept track of this stock, you know this has been a great pick up on any pullback, especially to the 9ema.  We've kept enough to prove this is our favorite Russian telco stock.  Speaking of closely followed holds from last Q,  let's not forget the ABM making new highs..this is as steady as they come from $21's for DJIM readers.

Not to be out done, we had one (AVZA) from our bleachers, the cheap seats come through in a nice way.  If you didn't catch the first alert at the open the other day, hopefully you moved on Monday's.   Plenty of opp to add at $6ish to grab part of this move.  The volume wasn't spectacular but hopefully the NCH brings in some more money overnight.  SILC, TRCR just fine as well today.

Considering, DJIM stocks have done these runs in '07 without the NAZ's help,  we'll put our pom poms down tonight and let the CSCO cheerleaders pave the way..Let there be many!...The ones with AAPL and GOOG on their sweaters had little bounce in their cheer and definitely no kick!.  Some suggested reading in our archive as to the possibilities for tomorrow.  Same ole?.  We'll be cautious and take any bump for profits most likely.

http://djmarkets.squarespace.com/journal/2006/11/9/cscodisco.html

Seeing is believing...

Basically, when dealing with a market that mocks your intelligence more often than you would ever admit, the only sense that we have to rely on is our eyes.    Throw away any predictions and throw away any bias, what you see is what you get and the best movers may not be the ones we had in our mind sometimes but this is definitely the fundamental concept of stock trading.    Had we predicted with 100% accuracy with 100% correct timing, we probably wouldn't be trading stocks as what is the fun in that? lol     Then what is the important issue here?   In our opinion, the ability to quickly spot the ongoing trend and recognize which plays are working better than the others and act on it with a sensible strategy is the key to survive in this market.     We think the market has definitely got tougher compared to a couple of years ago.    As they say, the tougher it gets, the tough gets going.     Market always behaves in a dynamic environment and our trading minds will somehow adapt to this ever changing environment and trade accordingly.   The worst thing when dealing with a dynamic market is to be stuck in the yesterday's frame of mind.    Plays come and go and change constantly, our methodology will have to be improved all the time to adapt to the newer plays and what's working out there.    Ok, lets tackle some of the working plays here....

CYNO, we noticed this one a couple of days ago off their earning report and wanted it give it a day or two to see how it reacted to the gap up.   Obviously, gap is being held and that's a very good sign.    We looked at it a bit further and realizing this one has a pretty small float and that's another good sign.   After checking the IBD #, with 96, 90 A rating, this further ups our view on this stock.   So the decision was quick and easy and we grabbed a starter in the low 23s and added more as the stock strengthened up.   Cowan raised estimates and WRH is a big fan now as well.

CSV,  DJ news reported a whole bunch of insider buys on Feb. 13th.   We are not sure if they are open buys or not and look as though they are not.   There were a total of 120k shrs bot by 6 different insiders and they were all bought at $6.40/shr.   So one thing we can definitely rule out is that there's won't be much or any of the insider sales anytime soon.    This is just the common sense that if all those insiders were willing to put in their own money into a stock that just made a new 52 week high after an earning report, there's no reason we shouldn't either.    A business is a business and as long as the business is legitimate, we are not going to give anymore thought to that.

MFW, this is one stock which we are officially giving a "kick a$$" title today.    There will be sometime before they report so as long as the market is in a neutral to bullish mode, we trade it on the long side.  We've had this core hold and USAP up every night this week as the reversal started.

USAP, a new 52 week high today and only as little as two days ago, this one is fighting off 9 ema.    Strong stock, nothing more to it.

VTRU, we aren't disputing anyone's claim of how much more this thing is worth so we are sticking to "seeing is believing" attitude.  First in the $43's off earning here, we said we'd back. Today the chart cried for a good look.

A few others we reminded to keep watch on today, SSRX from last week, CXW, AVZA made NCH but we'd like to see some more volume to sustain this.   Also, if a stock like EML is to bounce from 9ema levels it doesn't mean it has to touch it...it's just too thin to play that game.  CCOI might be worth a further look as it comes to highs.

We have 3 days off coming up and there will be some profit taking into it, but if that's your worry...you should have been selling into strength these last few days.  After a week like this, dip buyers will be waiting for your shares tomorrow.

DJIM #8 2007

Three days off from the markets almost makes you forget what a happy little place you were at!.  That is until you look at your trading account gain over the previous weeks or the charts of DJIM's closely followed that we/you own to put yourself in that happy space again.   You see there is no excuse to be stuck in the mud after the last 5-6..trading days.  Opportunities have been a plenty and the market has been with you.  If you are not ahead in the game, you are not taking advantage of what DJIM provides for the day tripper or for the investor.  What opportunities?.  Well..lets go to the alert-forum pages and see what was there.  A week ago Friday, there was...

CSV at the open and $5.50, we said to look for confirmation at $6 for interest....it was there and it has touched $6.80...

ONXX buy in premkt on forum when the phase 3 was released just below $20 and now it sits just off $28.

The same day we mentioned the stellar earnings of BW around $41 and the buy of a starter that night, it has traded to $46 since.  Then there was the sooo timely mid week note on TRT lagging the field when it shouldn't have and the kick ass move to nearly $16 in less than 2 hrs on rally day.  This is one example of not chasing the 30% gap on earnings and instead waiting for another entry.   If that wasn't enough, we introduced CYNO low $23's...now almost 10% higher and IBD #28 by the weekend.   Friday's seem to be made for small cap earning and last week didn't disappoint as HURC released their earning.  We alerted we'd be buying early and another 10% was available after the gap open as the stock ran from $39's to $44. If we started the day on a good note, we might as well end it on a good note.  KRSL on the reversal and an alert just under $18 for a potential kick come Tuesday was the trader alert.  Well, it looks like it came in the last 20min and AH's.  Again, this is an example of not chasing if you miss a early entry off earning on a small cap/float stock and instead waiting for the next entry a few days later.  Last ...we checked this was trading over $20 AH's on Friday.  So, this was just the new plays last week, we can't forget the steady climbs on most DJIM's holds to new highs all week.   The long term holders should be happy with DJIM steel, aluminum, lodging, Internet plays...USAP CENX OEH VTRU and even our Euro play in VE, now from low $68's to $74.  Hey even a licorice/banking stock in MFW.   There is a mix on DJIM for any type of trader/investor.  You're not expected to catch all of these plays from last week as there are many factors involved, including size of account...but you should be sticking a few of these trades hard last week.  This is NOT about selling you that DJIM works, you are already here and so the only purpose of regurgitating last week is for ' hopefully ' not many of you to see the potential you are maybe missing and figure out why!!.  We simply want everyone to enjoy the same success.   So,  if you were not in a happy place late last week,  it's time to re- evaluate your strategy as we said last weekend and send us your recent trades and confess to your bad habits.   A very few have done so and hopefully last week they exercised what we discussed and profited.  Count how many of these DJIM plays mentioned today you hold this weekend or traded last week,  this could be a simple test to know why you are not ahead of the game.

HURC, this opened nicely with not a lot of fanfare as the volume indicated. This provided some early entries at a decent and not runaway price.  Soon you saw the potential in how fast this stock can move.  We touched on what we like about HURC in alerts. There is nice growth of 14mln yoy in revenue plus over 2mln in net.  The estimates were beaten and sequentially there was some growth which we like to see.  Considering 2006/2005 yoy Q was flat last year, this is impressive considering they did .84 v.48c.  Seems like they are back on track with operations in China to take hold in 2007.

KRSL, seems every Q we go through the KRSL hype off earning and most of the time it does not last.  The 775K float is always advertised as the the holy grail on this stock.  You see it has been beating YOY numbers Q over Q for the longest time and the same story starts.  This time many will put their EFUT in their mouth and say this will become such...Hey,  weren't they just saying that with FFHL and the happy smiley price targets on it.   Simply, the numbers are good but there is nothing tremendous about them.  But that is not the point here,  it is only about how much the traders want to play and drive something higher.  It depends on the mood and right now its seems to be craving a runaway, just a feelin'.  The volume the first day makes us think this might have a longer life span this time around.  This is for traders unless you want to take a $2 dollar lotto ticket on it.  You can see the drop to 15's and the pop to 20's as to the volatility.  Anyways, we got our trading boots on with this one and will trade accordingly.

With over 90% of the SPX probably reporting already, you might think it's the end of earning season.  In reality, this is when the small / micro caps quietly start sneaking in with reports, so this hardly the time to get complacent and tie up cash in laggards.  It is always good to have cash ready and not be anything close to 100% invested as you don't want to be selling something in order to get at another.  First, you will never get the price you dreamed of for the one you've been holding and by selling you won't be getting the new buy at the price you wanted if it runs quickly anyway.   Still, this has been a very productive earning season so far as we conclude week #8 of DJIM weekend updates.    To name a few nice ones from this Q, we need to start with USAP as the big winner from $36's.  CCF VARI VTRU ENR AVZA MTRX, a few quick 20% runs in the cheapies like TGX TRCR and some that are fresh like SYNL CGX  CYNO etc. that we are looking and hoping for more out of.  The charts paint a good picture of the recent DJIM closely followed,  nothing we can really add than what you see from last weeks Journal, Alert follow ups and Forum notes.

Happy trading and a Happy Chinese New Year to our DJIM friends...