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Market Conditions Section:
Reviews past month's market action. Something can always be learned from a quick review.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Markets Leading Groups Section: See what industry groups are leading the markets by the number of high-ranked companies making new 52-week highs.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Investing For The New Millennium:
A monthly article from site founder, Ken Gruneisen, a CANSLIM Certified expert.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Stocks to Watch in This New Market Section: Each month our research staff profiles several companies that are worthy of purchase consideration under the guidelines outlined in the book "How to Make Money in Stocks".


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Featured Stocks Month in Review Section:
Each month we review all of our currently featured stocks. We also do this on a daily basis on the CANSLIM.net Featured Stocks Page and regularly throughout the month in the CANSLIM.net Daily After-Market Update (see here)

Notice the "%gain/loss since featured" column. (Note: This is a new feature. The table in this sample was taken from a more recent issue.)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Educational Articles:
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"An Essential Monthly Newsletter for the CAN SLIM® Oriented Investor"

Sunday, February 1st, 2004 | 8:39 PM
February
2004
Volume 7, Issue 2
 

Home | CANSLIM.net StockNews Archive | Renew Your Subscription | Your Profile | Help

  DOW 10,542.5 YTD -2.23% | S&P 500 1,198.78 YTD -1.07% | Nasdaq 2,075.73 YTD -4.58%
 FEBRUARY     2004    CONTENTS
 
CURRENT    MARKET    CONDITIONS
A overview of the current market conditions - the important "M" in CAN SLIM®.

When the Up Market Stops Going Up
Right out of the box let me say I believe the market has some upside to it. The internal market indicators remain positive. However, we are now starting to realize a rotation out of certain sectors and a move into more undervalued areas. I have observed that on many occasions the companies with the poorest fundamentals have been among those making the biggest price jumps. Many stocks that have been big movers will be questioned concerning their forward looking guidance and the outlook of their fundamentals.  At some point in the future these anomalies will have to reverse.

In hot, up-trending markets investors who believe to have employed good investing disciplines are tempted to cheat against the rules of their systems because it appears the market won’t stop going up. This has worked for the past year, but the reality is that the market will occasionally stop going up for at least a while. When the market does stop going up, investors may remember what it was like when stocks went down fast and furiously.

While the current upward move in the market has continued, overall market risk has increased quite a bit. A pullback is expected and would be welcomed by most “experts” at this time, but they have hardly proven reliable predictors in the past.  Many believe that a five to ten percent retracing would be healthy for the major averages. The rub is, not all stocks are going to pull back exactly in line with market. In fact, in the event of a more significant decline for the indices, some individual stocks are going to be sold off more violently.  Downside exposure in some issues could easily be as much as 25% to 50%.

Which leads me to my point. We can't say which stocks are going to go down and how far they might drop.  The more important question is, "Which high-ranked stocks will hold their ground, suffer only modest declines, then come back and continue to increase in price?"

As a preemptive move against the next slide in the market, review your sell discipline and know the points at which you'll exit your existing positions. Equally important is to reevaluate your portfolio’s CAN SLIM® characteristics to insure against degradation in any issues' fundamentals (earnings) that could prove even more costly should the market retreat. This may be a good time to sell the weakest links among your holdings, and to be looking to add better stocks after the market adjusts and digests the last ten months of gains.  Assuming all of your stock holdings are still in a position of strength, that still doesn’t make them immune from a hit. 

Increasing revenues, earnings, and accelerated growth will almost always equal upward stock price movement, and that is what the game is all about.  But paying attention to the broad market direction is crucial to your success.  One more important point to remember is this - just because it is a good CAN SLIM® stock doesn’t mean you should ride it down into a losing position.  Considering the recent volatility, you may even want to tighten up your stop-losses so you can realize those unrealized profits (paper profits) in your portfolio.

As an investor of other people's money, I am constantly evaluating the levels of investment and market risks. They say the market "climbs a wall of worry" as stocks and the major indices continue to rise, bringing on higher and higher levels of risk. William O’Neil makes two good points when he says, ”you don’t always have to be invested” and “you can time the market”.  Mitigating downside risk is a very important component of successful investing.

- Dee Hendon

Dee Hendon is a professional technical market analyst with years of experience in investing and using CAN SLIM®
 
MARKETS    LEADING    GROUPS  
You stack the odds of making a winning trade in your favor by choosing a leading company in a leading industry group, so when buying stocks be sure to choose one with plenty of company, that is a stock trading among a group of several strong-performing peers!  Familiarize yourself with the list of the top performing industry groups and leading stocks listed below.  These symbols and related companies ARE NOT intended to be construed as a list of timely and proper CAN SLIM® - based choices.*   These pace-setters in each of the currently top-ranked groups listed may not presently fit within the guidelines we suggest adhering to.  The point is that it is always wise to choose leaders in the same or a very similar business to that of the strongest stocks in the market.  Find companies that resemble other strong stocks' leadership characteristics.  

CANSLIM.net's most timely buy candidates are analyzed by our experts in great detail in the "Stocks to Watch in This New Market "section.

RANK GROUP NAME GROUP LEADERS
SYMBOL ,% FROM 52WK HIGH, # OF DAYS MAKING NEW HIGHS
1 HEALTH SERVICES  RMD, -1.64%, 3  |  SIE, -2.11%, 3  |  CVH, -2.53%, 4  |  TRI, -2.72%, 5  |  UNH, -2.80%, 4  |  RTSX, -6.55%, 3
2 ENERGY  LUFK, -0.61%, 6  |  KWK, -2.69%, 3  |  HAL, -3.18%, 3  |  VLO, -3.82%, 5  |  SSL, -6.84%, 3
3 CONSUMER NON  GIL, 1.39%, 3  |  KSWS, -7.20%, 3  |  BEBE, -10.30%, 3 | PVH, -1.92%   | COH, -1.96%   | CRI, -3.50%   | JAH, -4.31%   | MPAC, -6.29%  
4 RETAIL  MHS, -2.98%, 4  |  ANF, -3.24%, 5  |  AEOS, -6.24%, 3 | JOSB, -1.28%   | GCO, -1.75%   | JCP, -2.10%   | ORLY, -2.20%   | AAP, -2.27%  
5 CONSUMER DURABLES  PTC, -4.33%, 3  |  CTHR, -6.12%, 5 | RCRC, -2.62%  
6 WHOLESALE  WSO, -7.37%, 4  |  PDCO, -16.30%, 3 | MCK, -0.11%   | HSIC, -2.05%   | LKQX, -3.24%   | DPZ, -3.68%   | AIT, -4.75%  
7 SPECIALTY RETAIL  MIK, -5.14%, 3 | BKS, -2.27%   | HIBB, -3.72%   | CPRT, -15.26%  
8 TELECOMMUNICATIONS  LIFE, -8.57%, 4 | CHL, -3.33%   | CMTL, -17.81%  
9 DRUGS  HITK, 1.46%, 3 | IVGN, -0.73%   | TECH, -3.55%   | DNA, -4.54%   | GENZ, -7.74%   | TEVA, -9.08%  
10 ELECTRONICS  ITRI, -7.48%, 4 | LB, -0.55%   | AFFX, -2.14%   | TXN, -3.80%   | TRMB, -5.21%   | APH, -7.01%  
11 FINANCIAL SERVICES  NICK, -14.63%, 4 | AMTD, -2.05%   | LM, -3.73%   | ADVNB, -4.35%   | STU, -5.26%   | SJT, -5.26%  
12 LEISURE  MCRI, -11.84%, 3 | PENN, -0.71%   | IDR, -0.99%   | DRI, -2.08%   | PZZA, -2.54%   | CHH, -3.25%  
13 MANUFACTURING  SNHY, -8.77%, 4 | AME, 0.12%   | BDK, -1.75%   | ROP, -1.92%   | ENR, -3.58%   | IMGC, -3.72%  
14 REAL ESTATE  UPFC, -0.94%, 3 | CTO, 1.49%   | CBG, -0.77%   | VNO, -1.33%   | CARS, -1.70%   | PSA, -1.94%  

Notes:

  • This is a list of the strongest groups based on the total number of new highs achieved in the group. For example, 1 stock making 10 new highs is the same as 10 stocks making 1 new high.
  • If there were less than four stocks in the list of stocks making new highs then the top five stocks in that group were added to the list.
  • Any stock that was more than 20% off its 52-week high was eliminated from the list regardless of any other characteristics.

- CANSLIM.net News Staff

 
INVESTING   FOR    THE   NEW  MILLENNIUM

Making the Choice Between Holding and Swapping?  Group Action is Your Guide 
by  Kenneth J. Gruneisen, Registered Investment Advisor, Source Capital Group, Inc. Members NASD/SIPC

More people than ever are reading this monthly publication, and thus I have been receiving a greater amount of correspondence and an increasing number of questions concerning detailed investing tactics. The ins and outs of the actual successful implementation of the CAN SLIM® investment approach can present many stumbling blocks for investors.  The first advice I have for anyone who is still struggling with the details of this approach would be to read William J. O’Neil’s latest edition of “How to Make Money in Stocks”.  I know many people who read the book repeatedly, and they insist that doing so is a big help to them in reinforcing the proper buying and selling guidelines.

Those who have asked me about portfolio concentration have noted that O' Neil recommends an investors’ portfolio should not have more than 7-8 stocks, and that 3-4 stocks are probably enough for the average portfolio.  Of course, this is provided that the investor makes disciplined entries and exits always under the guidelines explained in the book.  Concentrating your funds in just a few well-selected stocks is an important and smart part of successful CAN SLIM® investing.  

You will be better off shopping for candidates in a top performing industry group on the rise, not a group that is weakening.

The past few years have taught investors to expect volatility, sometimes rather extreme volatility such as 30% or 50% swings in a stock's price over as short of a period as perhaps only a day or two.  Being on the wrong end of a substantial move such as that can be devastating!  I’ve said it before and will say again that many people are simply not prepared emotionally, or financially, to handle the volatility that individual stocks can sometimes dish out.  We can almost consider the 10% and 15% moves we see as more friendly hints, yet a lightning fast loss of 10-15% often causes excessive emotion for investors.  Likewise, a quick 10-15% profit, for the average investor who is desperately thirsty for a victorious trade, can often lead to undue celebrating.  Moves like that are actually rather commonplace in the stock market.  The more important point we must always work at understanding and determining is whether or not a change is taking place with respect to a stock’s much more significant upward or downward trend.

In a bullish market environment with many breakouts occurring, it may seem as though every other day there is another list of excellent looking new breakouts showing up.  It can become quite a challenge to make the decisions between holding a portfolio’s current winners and selling to take on new positions.  You are probably wise to hold and give your winning positions the benefit of the doubt and a lot of room to fluctuate.  This especially true if you understand what the company does and have a good feel for its outlook, and you can see that its upcoming financial comparison looks like easy to beat earnings numbers from the year earlier. Be patient with any winners, since 3 out of 4 stocks will see their prices rise or fall in response to the overall market’s direction.

I recently explained in a “Ken’s Mail Bag” question how come tightly trailing a winner with a “stop-loss order” is not always recommended.  I find it extremely difficult to suggest a set percentage that one should be willing to let any winner correct.  I say this because in the mid-1990’s I recall seeing America Online (AOL) rise six-fold in price, but during that phenomenal rise it at one point corrected by 50%.  Years later, when I was up substantially for numerous clients and myself in a company called Network Solutions (later acquired by VeriSign), I endured a similar such correction.  I knew what I had my hands on, and seeing that the company had exceptional sales revenues and earnings growth and it played a very key leadership role in the Internet sector, I actually took advantage of the correction and acquired a more meaningful stake.  When the broad market failed in March of 2000, the Internet group went down swiftly, and the sell signals were very blunt.  Thankfully, we preserved some outstanding gains an new better than to try to force profits from an uncooperative market.

I suggest that one can manage a portfolio best by first removing positions in groups that appear to be on the decline or moving down substantially in IBD’s 197 Industry Groups list.  Then put your focus on making your new buys only in leading industry groups.  You will be better off shopping for candidates in a top performing industry group on the rise, not a group that is weakening.

Example – Lennar Corp. (NYSE- LEN) is in the homebuilding group, a group featuring numerous issues that are getting into technical trouble as their charts are weakening.  After a lengthy period during which a substantial advance was made, this company’s recent series of lower price highs and high-volume price deterioration under its 50 DMA are signs of exhaustion.  If you own a former leader like this one and you are seeing profits erode (or if you are in a losing position), you are probably wise to take the hint the stock’s chart has already been giving you.  “Don’t fight the tape”, or so they say. 

Kenneth J. Gruneisen - A Registered Investment Advisor & Registered Principal, Ken manages a Source Capital Group (Member NASD,SIPC) branch office and offers personalized assistance. Investors with a significant financial interest in equities may inquire about opening an account by calling the office locally at (954) 785-1990 or 1-888-237-8399 or emailing to kgruneisen@sourcegrp.com  Further information is always available upon request. Contact us if you know anyone that may have an interest in receiving this or any of our other reports.

Comments contained in the body of this report are technical opinions only and are not necessarily those of Source Capital Group, Inc. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities. Source Capital Group, Inc. is a NASD/SIPC member firm.

 
STOCKS    TO WATCH   IN   THIS NEW    MARKET
Our staff of experts researches and then compiles a list of selected stocks which warrant further investigation by investors. These stocks show strong potential for a share price breakout based on the CAN SLIM® investment methodology. These are not necessarily buy recommendations. If anytime throughout the month our contributors find a particular stock that has similar characteristics as the ideas featured below we will produce one of our CANSLIM.net Stock Bulletins or a CANSLIM.net Stock Alert Report. These reports will be emailed as a direct link to all subscribers.

Corillian Corporation by Kenneth J. Gruneisen

http://www.corillian.com/

Ticker Symbol: CORI (NasdaqNM)

Industry Group: Computer Software - financial

Shares Outstanding: 36.6 Million

Price: $7.56 (at close 01/30/04)

Day's Volume: 346,400 (at close 01/02/04)

Shares In Float: 21.6 Million

52 Wk High: $8.15

50-Day Avg Vol: 802,400

Up/Down Vol Ratio: 1.8

Pivot Point: $7.55 (11/07/03 high plus .10)

Pivot Point +5% = Max Buy Price: $7.92

Financials, StockTalk, News, Chart, SEC, Zacks Reports

Profile: Corillian Corporation is a provider of solutions that enable banks, brokers, financial portals and other financial service providers to rapidly deploy Internet-based financial services. The Company's solutions allow consumers to conduct financial transactions, view personal and market financial information, pay bills and access other financial services on the Internet.  Customers including Chase Manhattan Bank, Bank One, Wachovia Bank and SunTrust Bank use the Corillian Voyager software platform.  The company has recently turned the corner to profitability after years of shrinking losses. The most recent quarter ended Sept 30, 2003 sales revenues were reported up +15% from $10 million to $11.6 million and earnings per share were +$0.04 versus -$0.08 over the year earlier period .  In the just prior June comparison its sales revenues rose 28% from $9 million to $11.5 million while earnings per share were +$0.05, up from -$0.13 a year earlier.  The number of quality mutual funds with an ownership interest rose from 14 to 23 from Jun ’03 to Dec '03.

What to Look For and Look Out For:  A violation of the upward trend line would be an early indication that the stock might be heading for trouble.  Doing so at any time soon would also negate its recent breakout gains which occurred on above average volume as it recently rose above its pivot point and its November highs.  The upward trend line (rising green line) should be the first important support to watch and see that it stays above, while any deterioration under it or its 50-day moving average (now at $6.15) would of course be a much more serious concern, especially so if either might occur on heavy volume.  For now the stock appears to be an excellent buy candidate, but the fact that it is low priced and has already risen almost eightfold since May 2003 adds a lot of risk that there could be a sharp wave of profit taking upon any hint of disappointment.  Needless to say, strict selling discipline could be very important here.  Very little resistance would be expected in the stock now, however the fact that it traded substantially higher in 2000-2001 should be noted.

Technical Analysis:  On January 23rd CORI spiked up to new 52-week highs, rising above its 11/07/03 high ($7.45) on volume that was nearly three times its 50-day average daily volume.  Since piercing the old resistance (the flat green line) it has been hovering near those highs.  Volume has spiked up with the recent price increases and generally dried as it consolidated, suggesting there are not a lot of shareholders presently in a mood to head for the exits. 

Hansen Natural Corp.  by Kenneth J. Gruneisen

http://www.hansens.com

Ticker Symbol:  HANS (NasdaqSC)

Industry Group: Beverages - soft drinks

Shares Outstanding: 10.4 Million

Price: $9.00 (at close 1/30/04)

Day's Volume: 13,500 (at close 1/02/04)

Shares In Float: 4.98 Million

52 Wk High: $10.00

50-Day Avg Vol: 18,600

Up/Down Vol Ratio: 1.2

Pivot Point: $9.50 (11/13/04 high plus 0.10)

Pivot Point +5% = Max Buy Price: $9.97


Financials, StockTalk, News, Chart, SEC, Zacks Reports

Profile:   Hansen markets and distributes alternative beverage category natural sodas, fruit juices, fruit juice and soy smoothies, energy drinks, teas, children's multi-vitamin juice products and still water sold under the Hansen's brand name.  Nutrition bars and cereals are also sold under the Hansen's brand, with business primarily in the United States   The company's management owns 43% interest, so they remain quite motivated to preserve and enhance shareholder value. Recent insider buying has been reported even after the stock has traded up to new all-time highs.  I find that to be at least one more strong vote of confidence. Only a small number of funds have an ownership interest (a source reported only 2 funds) totaling nearly 18% of its shares.  The beverage group isn't exactly bubbling right now, so I recall seeing a frowning face on the character at IBD's checkup service, yet the timeliness of Hansen's "functional drinks" is something worth noting in light of strength among several nutritional supplement companies.  Its earnings for the past three quarters reported March, June, and September '03 comparisons were +50%, +58%, +58% respectively, yet its annual earnings history has demonstrated ups and downs. 

 

What to Look For and Look Out For: Price is a concern, as low priced stocks which are in short supply and so thinly traded can obviously be extremely volatile issues.  Also, consider that this company is a relatively unknown entity among the institutional investing crowd.  The recent breakout was a technical buy signal, so near term the price could quickly increase and close too far beyond its pivot point to be a smart buy under the guidelines. Be careful and disciplined about any purchase order's timing and pricing, and also be equally diligent about limiting losses and keeping them small.  Expect that volatility could lead to some tricky action, and know that the broad market action may be a minor influence or substantial factor. Use the prior support levels including its 50-day moving average line (thin blue) and upward trend line (slanted green) as obvious points where you might be wise to place your mental price alerts or actual sell stop orders.  A violation or close under any of them would be cause for greater concern and a possible technical signal to exit, especially if the price weakness occurs accompanied by higher than average trading volume. 

Technical Analysis: When it lost ground on heavy volume on 01/07/04 HANS looked like it was getting into trouble.  But for the next two weeks the stock hovered near its 50-day moving average line, building on a 10-week base.  On 01/21/04 it rose sharply from that important short term average. The high volume gains on that session and the following day allowed it to clear its pivot point, signaling that it may reasonably be expected to continue trending higher.   

Note - The CANSLIM.net News editor, Andrew Hansen, is in no way connected with Hansen Natural Corp.


Valueclick Inc. - by Mark Van Kampen

www.valueclick.com

Ticker Symbol: VCLK (NasdaqNM)

Industry Group:  Internet – e commerce

Shares Outstanding: 74.8M

Price: $10.45 (at close 01/30/04)

Day's Volume:482,000 (at close 01/30/04)

Shares In Float: 68.70 Million

52 Wk High: $11.39

50-Day Avg Vol: 1,225,000

Up/Down Vol Ratio: 1.5

Pivot Point: $11.22 (10/15/03 high plus .10)

Pivot Point +5% = Max Buy Price: $11.78


Financials, StockTalk, News, Chart , SEC, Zacks Reports

Profile:  Valueclick provides Internet advertising services to online advertisers and publishers of independent Web sites.  On December 18, 2003, ValueClick announced completion of the acquisition of Hi-Speed Media, a provider of e-mail marketing services.  ValueClick raised guidance as the acquisition is expected to be immediately accretive to earnings.  It turned the corner to profitability while the company reported earnings versus year earlier losses in each of the past four quarterly financial reports.  For the periods ended Dec ’02, Mar ’03, Jun ’03, and Sep ’03 the company’s sales revenues improved 54%, 57%, 42% and 31% respectively over the year earlier.

What to Look For and Look Out For:  Higher volume without meaningful price progress suggests that for the past week it has been encountering resistance near its October highs, while last Friday marked VCLK’s first day of quiet trading since the stock market was closed to observe the MLK holiday.  Continued flat-to-downward price action coupled with quiet volume might form a handle pattern (the best cup-with-handles have downward sloping handles), however, rolling back to a close under $10 would negate its 01/20/04 technical breakout.  If it possibly encroaches upon its 50 DMA (now at $9.18), consider any violation a more serious sell signal.  The long-term supporting upward trend line shows another point to watch for support, however an 8% stop loss would be triggered way before it dropped to that level.   Earnings are scheduled for release before the market opens on February 12th, always a time when increased volatility can be expected.

 

Technical Analysis:  Volume has been extremely active since VCLK’s 1/20/04 breakout above its pivot point, previous to which VCLK had formed a cup shaped base with the left side at 10/15/03.  Through the many weeks since it bottomed on 11/17/03 it had shown only one down day with above average volume.  The near term price/volume action will determine if a handle becomes more sharply defined, perhaps adding more certainty to the bullish chart pattern.


AU Optronics Corp ADR - by Tate Dwinnell

www.auo.com

Ticker Symbol: AUO (NYSE)

Industry Group: Computer- Peripheral Equipment

Shares Outstanding: 403.34 Million

Price: $15.10 (at close 01/30/04)

Day's Volume:1,842,100 (at close 01/30/04)

Shares In Float: 286.37 Mil

52 Wk High: $16.01

50-Day Avg Vol: 1,793,100

Up/Down Vol Ratio: 2.1

Pivot Point: $15.00 (10/21/03 high plus .10)

Pivot Point +5% = Max Buy Price: $15.75

Financials, StockTalk, News, Chart , SEC, Zacks Reports

Profile: AU Optronics Corp., formerly Acer Display Technology, Inc., manufactures and assembles TFT-LCD (thin-film transistor liquid crystal display) panels. The products are used in computers, consumer electronics products such as DVD players and LCD televisions, with large-size display panels ranging from 8.4 inches to larger than 20 inches.  Small to medium-sized display panels from 1.5 inches to 7 inches are also made by the company for use in products such as digital cameras, digital camcorders, mobile phones, car television monitors, car navigation systems and personal digital assistants (PDAs).   As a supplier to Hewlett Packard and Dell, this Taiwanese company is fast becoming one of the dominant players in the LCD field.  Earnings and sales revenue growth have been accelerating rapidly in the last few quarters.  The most current unaudited financial report issued 01/29/04 for the quarter ended December 31,2003 showed earnings increasing to +$0.51 per share, up markedly from a loss of -$0.06 per share in the year-ago period.  Those results were on the heels of a quarterly sales revenue increase to $1.028 billion, up from $459.8 million, a staggering 124% rise over the year earlier period.  It looks like major institutions are impressed, as institutional sponsorship has more than doubled in the last six months from a reported 20 funds in June ’03, to 42 funds in Dec ‘03.  With a 5th generation manufacturing plant slated for completion in early 2005, they are in position to also capitalize on the impending LCD television boom.  Here is an article, detailing the state of the industry: http://www.displaysearch.com/

What to Look For and Look Out For: The recent market volatility has prompted many strong leaders to sell off, yet AUO looks poised to continue in the direction of its recent breakout.  It ended the week hovering above its Sept-Oct resistance levels, but appeared to be doing some normal backing and filling after 01/27/04 and 01/28/04 gaps up in price.  A stop loss at 8% would be triggered long before a technical sell signal upon any violation of the 50 DMA (now at $12.68).  Don’t give it enough room to possibly re-test prior lows that should offer long-term support near $11.  Be advised that ADRs (American Depositary Receipts) are interests in companies that have inherent additional risks, as foreign firms may not be required to adhere to the same strict accounting regulations of U.S. companies.  A release of AUO’s audited results and a conference call will be held on February 10th, which could prove to be the catalyst for additional volatility.

Technical Analysis: Note that the breakout above $15 was backed up by a huge surge in trading volume, and on 01/28/04 it cleared a five and a half month base.  This was a technical buy signal, yet the stock has not surpassed the buy limit of $15.75.  In the midst of volatility among leaders and distributional action on the broader market, AUO remains in close range of its pivot point and seems to have stabilized there.  A look at its weekly chart reveals a significant long-term breakout also occurred on its weekly chart, with the price reaching all-time highs.

Each month our stock picks are compiled by several expert contributors who hand-pick these ideas:
Kenneth J. Gruneisen - A Registered Investment Advisor & Registered Principal, Ken manages a Source Capital Group (Member NASD,SIPC) branch office and offers personalized assistance.  
 (954) 785-1990 or (888) 237-8399 or email kgruneisen@ sourcegrp.com
Mark Van Kampenan independent investment analyst with more than 20 years of experience. mvankampen @aol.com Tate Dwinnell - Private Investor. Holds a Western Washington University degree focused in Mathematics and Economics and is a member of the  American Association of Individual Investors
John Derway -  Vice President,  Coburn & Meredith A Stockbroker and Registered Investment Advisor for 25 years.  
150 Trumbull Street, Hartford, CT  06103 1-800-825-2244 ext.334
jderway@ coburnfinancial.com 
Richard Miller  -   Statistics professional and serious trader with years of technical analysis-based trading. He currently manages six different portfolios. He maintains his own website of stock analysis. rwmill@yahoo.com1
 
 
FEATURED STOCKS MONTHLY REVIEW        
In the table below you will find every stock that was currently featured by CANSLIM.net in the prior month.
 
Symbol/Company Name/Industry Group Last Chg Date
High-
lighted
Price
High-
Lighted
% Gain / Loss Since Feat. Resources Summary Notes
HLEX - NASDAQ
Health Extras
INSURANCE - Insurance Brokers
$20.07 +$0.43 6/23/2005 $18.91 +6.13% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This issue has steadily advanced since being featured at $18.91 on 06/23/05.
CBG - NYSE
C B Richard Ellis Group
REAL ESTATE - Property Management/Developmen
$43.86 +$0.72 6/20/2005 $41.63 +5.36% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Decent gains since being featured on 6/20 at $41.63.
 
CLFC - NASDAQ
Center Financial Corp Ca
BANKING - Savings & Loans
$24.83 -$0.06 6/20/2005 $23.65 +4.99% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Most recently featured at $23.65 on 06/20/05 and has rallied nicely since. Read here: 
POT - NYSE
Potash Corp Saskatchewan
METALS & MINING - Nonmetallic Mineral Mining
$95.58 -$1.07 6/14/2005 $94.49 +1.15% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Is slightly higher than when it was first featured breaking out of a 5 month flat base with a pivot point of $92.10 on 06/14/05.
TDY - NYSE
Teledyne Tech Inc
DIVERSIFIED SERVICES - Technical Services
$32.58 -$0.10 6/14/2005 $33.83 -3.69% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This is slightly below where it was first featured on 06/14/05
PARL - NASDAQ
Parlux Fragrances Inc
CONSUMER NON-DURABLES - Personal Products
$27.67 -$0.32 6/13/2005 $28.15 -1.71% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This was first featured at $28.15 on 06/13/2005 as it was breaking out on above average volume through its pivot point. Read here:

  

KWK - NYSE
Quicksilver Resources
ENERGY - Independent Oil & Gas
$63.93 -$0.25 6/9/2005 $58.19 +9.86% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This issue was featured at $58.19 on 06/09/05 as it was breaking out of a 5 month ascending base. Read here:
ADVNB - NASDAQ
Advanta Corp Cl B
FINANCIAL SERVICES - Credit Services
$28.16 -$0.68 6/7/2005 $26.32 +6.99% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This stock has rallied +7% since it was first featured at $26.32 on 06/07/05 as it was breaking out of an 8 month base. Read here:
ELOS - NASDAQ
Syneron Medical Ltd
HEALTH SERVICES - Medical Appliances & Equipment
$36.59 -$1.31 6/3/2005 $34.22 +6.93% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Recently featured in a CANSLIM.net Stock Bulletin at $34.22 on 06/03/05(Read here). Has moved slightly higher since.
MGM - NYSE
M G M Mirage
MEDIA - Movie Production, Theaters
$39.58 -$0.23 6/3/2005 $39.60 -0.05% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This issue was featured at $39.60 on 06/03/05. (Read here) and has moved sideways since.
LM - NYSE
Legg Mason Inc
FINANCIAL SERVICES - Investment Brokerage - Regiona
$104.11 -$2.07 6/2/2005 $87.85 +18.51% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This leader was first featured at $87.85 on 06/02/05. (Read here) and has advanced +19% in the past five sessions.
SQM - NYSE
Sociedad Quimica Y Minra
CHEMICALS - Synthetics
$100.00 -$0.70 6/2/2005 $90.51 +10.49% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This issue was most recently featured at $90.51on 06/02/05. (Read here). It has rallied +11% since then.
XXIA - NASDAQ
I X I A
ELECTRONICS - Semiconductor Equipment & Mate
$19.44 +$0.01 6/2/2005 $20.14 -3.48% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This issue was most recently featured at $20.14 on 06/02/05 (Read here). It has since pulled back and found support at its 50 DMA.
CME - NYSE
Chicago Mercantile Xchng
DIVERSIFIED SERVICES - Business/Management Services
$295.50 -$10.45 6/2/2005 $228.37 +29.40% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This leader was first featured on 06/02/05 at $228.37. (Read here) and has rallied 30% since then.
GOL - NYSE
Gol Intelligent Airlines
TRANSPORTATION - Regional Airlines
$30.06 +$0.30 6/1/2005 $34.01 -11.61% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured on 06/01/05 at $34.01. Read here. Then pulled back and now rests on 50 DMA.
UPFC - NASDAQ
United Panam Finl Corp
REAL ESTATE - Mortgage Investment
$27.41 +$0.01 5/31/2005 $23.42 +17.04% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First featured on 05/31/05 at $23.42. Read here. Has advanced nicely since and closed the month at a new 52-week high.
STR - NYSE
Questar Corp
UTILITIES - Gas Utilities
$65.90 +$0.00 5/31/2005 $62.35 +5.69% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First featured at $62.35 on 05/31/05 and now remains perched near highs.
TPX - NYSE
Tempur Pedic Intl Inc
MANUFACTURING - Textile Manufacturing
$22.18 -$0.97 5/30/2005 $23.40 -5.21% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Pulling back towards its 50 DMA. Featured in the June issue of CANSLIM.net News Read here.
SNHY - NASDAQ
Sun Hydraulics Inc
MANUFACTURING - Industrial Equipment & Compone
$36.39 -$1.00 5/27/2005 $34.93 +4.18% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured on 5/27/2005 CANSLIM.net's Mid-Day Breakouts Report. Has been edging higher since.
TOL - NYSE
Toll Brothers Inc
MATERIALS & CONSTRUCTION - Residential Construction
$101.55 +$0.07 5/26/2005 $90.75 +11.90% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Recently featured on 5/26/2005 in a CANSLIM.net's Mid-Day Breakouts Report. Has moved higher since.
PVH - NYSE
Phillips-Van Heusen Corp
CONSUMER NON-DURABLES - Textile - Apparel Clothing
$32.69 +$0.12 5/26/2005 $31.07 +5.21% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Recently featured on 5/26/2005 in a CANSLIM.net's Mid-Day Breakouts Report.  Has moved higher since.
 
HOV - NYSE
Hovnanian Enterprises A
MATERIALS & CONSTRUCTION - Residential Construction
$65.20 +$0.10 5/26/2005 $61.20 +6.54% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First highlighted on 05/26/2005 in CANSLIM.net's Mid-Day Breakouts Report as it was breaking out of 5 month base. Has advanced since.
BEBE - NASDAQ
Bebe Stores Inc
CONSUMER NON-DURABLES - Textile - Apparel Clothing
$26.47 -$0.81 5/23/2005 $24.92 +6.22% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Sits near all-time highs since featured in CANSLIM.net's Mid-Day Breakouts Report on 05/23/05. (adjusted for 3:2 split)
PNRA - NASDAQ
Panera Bread Co Cl A
LEISURE - Specialty Eateries
$62.09 +$0.09 5/23/2005 $61.86 +0.37% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Recently featured on 5/23/2005 in  CANSLIM.net's Mid-Day Breakouts Report. Has moved a bit higher since.
PTRY - NASDAQ
Pantry Inc
RETAIL - Grocery Stores
$38.73 -$0.26 5/16/2005 $36.43 +6.31% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured on 5/16/2005 with a gap open to new highs in that day's CANSLIM.net's Mid-Day Breakouts Report. Holding up well since.
PTEN - NASDAQ
Patterson-Uti Energy Inc
ENERGY - Oil & Gas Drilling & Explorati
$27.83 -$0.03 5/10/2005 $26.75 +4.04% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured on 05/10/2005 in CANSLIM.net's Mid-Day Breakouts Report after advancing is now pulling back.
OIS - NYSE
Oil States International
ENERGY - Oil & Gas Equipment & Services
$25.17 +$0.21 5/6/2005 $22.97 +9.58% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Immediately moved a bit higher then quickly headed towards it's 50 DMA where it found support after featured in CANSLIM.net's Mid-Day Breakouts Report on 05/6/2005. Remains perched near highs.
 
ABCO - NASDAQ
Advisory Board Company
DIVERSIFIED SERVICES - Business/Management Services
$48.78 -$0.56 5/6/2005 $43.12 +13.13% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured in CANSLIM.net's Mid-Day Breakouts Report with a cup with handle like pattern. Has been trending upward since and now sits near 52-week highs.
BLUD - NASDAQ
Immucor Inc
DRUGS - Diagnostic Substances
$28.95 +$1.09 5/5/2005 $32.77 -11.66% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First featured on 05/05/05 in CANSLIM.net's Mid-Day Breakouts Report as it was breaking out of a sound base. Also recently featured in a CANSLIM.net Bulletin. Has since dipped below 50 DMA.
CB - NYSE
Chubb
INSURANCE - Property & Casualty Insurance
$85.61 -$0.08 5/4/2005 $83.62 +2.38% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured on 05/04/2005 in CANSLIM.net's Mid-Day Breakouts Report. Tested 50 DMA and now sits just off of new highs.
 
DJO - NYSE
D J Orthopedics Inc
HEALTH SERVICES - Medical Appliances & Equipment
$27.43 -$0.17 5/3/2005 $26.19 +4.73% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports On 5/3/2005 this leader was featured in CANSLIM.net's Mid-Day Breakouts Report. Price now sits just above the 50 DMA and its prior base.
IVGN - NASDAQ
Invitrogen Corp
DRUGS - Biotechnology
$83.29 -$0.05 5/2/2005 $74.68 +11.53% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Recently featured on 5/2/2005 in CANSLIM.net's Mid-Day Breakouts Report. Has been moving higher since.
ROP - NYSE
Roper Industries Inc
MANUFACTURING - Diversified Machinery
$71.37 -$0.08 5/2/2005 $68.13 +4.76% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured on 05/2/2005 in CANSLIM.net's Mid-Day Breakouts Report. Holding up since.
CYH - NYSE
Community Health System
HEALTH SERVICES - Hospitals
$37.79 +$0.02 4/29/2005 $34.55 +9.38% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports The 04/29/05 CANSLIM.net's Mid-Day Breakouts Report featured this leader. It immediately traded higher than tested its 50 DMA several times and is now building a new base.
 
BCR - NYSE
Bard C R Inc
HEALTH SERVICES - Medical Instruments & Supplies
$66.51 -$0.44 4/29/2005 $70.00 -4.99% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Just closed in lower half of session's range and well below its 50 DMA. First featured on 04/29/05.
HCSG - NASDAQ
Healthcare Svcs Group
DIVERSIFIED SERVICES - Business/Management Services
$20.08 +$0.30 4/20/2005 $24.52 -18.11% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First featured on 03/31/05 in the CANSLIM.net Mid-Day BreakOuts Report (Read here). Came under some strong selling pressure on 04/15 & 04/16 that pushed price well below 50 DMA and past any investors stop loss point. It did convincingly reverse though and soon after gapped open. Closed 3.5% from its 52-week high.
JWN - NYSE
Nordstrom Inc
RETAIL - Apparel Stores
$67.97 -$0.38 3/31/2005 $55.27 +22.98% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First highlighted on 07/08/04 (Read here) yet quickly declined. It was re-featured on 03/31/05 (Read here) and was holding up well in a tough market. The nice gap open on 05/05/05 set the stage for the stage higher prices. This issue has enjoyed sizable gains since. 
URBN - NASDAQ
Urban Outfitters Inc
RETAIL - Apparel Stores
$56.69 -$1.66 3/7/2005 $47.63 +19.02% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This issue was highlighted in the 03/07/05 in CANSLIM.net's Mid-Day Breakouts Report. Retailers have been acting strong in recent weeks.
COH - NYSE
Coach Inc
CONSUMER NON-DURABLES - Textile - Apparel Footwear & A
$33.57 +$0.01 3/3/2005 $29.40 +14.18% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports A long time favorite. COH was first featured in the December 2002 issue of CANSLIM.net News at $8.50 (split adjusted) It was again featured in the September 2003 issue of CANSLIM.net News, 04/24/04 as CANSLIM.net Stock Bulletin. Continues acting well. (Split Adjusted 2:1)
AEOS - NASDAQ
American Eagle Outfittrs
RETAIL - Apparel Stores
$30.64 -$1.17 3/2/2005 $57.69 -46.89% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Has been steadily increasing since first appearing in CANSLIM.net.  Remains perched near highs.
INFY - NASDAQ
Infosys Technologies Ads
COMPUTER SOFTWARE & SERVICES - Technical & System Software
$77.60 +$0.18 2/16/2005 $73.36 +5.78% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First featured on 09/01/04 in CANSLIM.net's Mid-Day BreakOuts Report at $53.99 (Read here) as it was breaking out on massive volume from a decent base. It steadily advanced to a high of $78.48 before its pulling back.  Has since rebounded and remains perched near its highs.
DHI - NYSE
D R Horton Inc
MATERIALS & CONSTRUCTION - Residential Construction
$37.61 +$0.17 2/4/2005 $43.19 -12.92% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured on 02/4/2005 in the CANSLIM.net's Mid-Day Breakouts Report with a pivot point of $42. Made minimum gains then gapped down several days and tested its 200 DMA, although now sits just off of all time highs.
TS - NYSE
Tenaris Sa Adr
METALS & MINING - Steel & Iron
$78.27 -$1.21 2/2/2005 $52.17 +50.03% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First featured in CANSLIM.net's Mid-Day Breakouts Report on 02/02/05 near $52. Quickly ran as high as $81. Now sits near all time highs.
PHM - NYSE
Pulte Homes Inc
MATERIALS & CONSTRUCTION - Residential Construction
$84.25 +$1.01 2/1/2005 $66.92 +25.90% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First featured in a CANLIM.net's Mid-Day Breakouts Report on 2/1/2005 at $66.92. Quickly ran as high as $87.70. Now remains perched near highs.
BZH - NYSE
Beazer Homes U S A Inc
MATERIALS & CONSTRUCTION - Residential Construction
$57.15 +$0.04 2/1/2005 $51.00 +12.06% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports The leader was featured on 02/01/05 (Read here). It has advanced nicely since. Homebuilders have been acting strong since 2001.
CVH - NYSE
Coventry Health Care Inc
HEALTH SERVICES - Health Care Plans
$70.75 -$0.99 1/31/2005 $56.57 +25.07% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This leader was first featured on 08/02/04 in the August 2004 issue of CANSLIM.net News at $51.11 (Read here) It experienced several days of high volume selling that that quickly cut the price about 30% in 4 days. After repairing that damage and then building another base it gapped open on 01/31/05 prompting us to again highlight it as it appeared in the CANSLIM.net Mid-Day BreakOuts Report (Read here) that day at $56.57 (split adjusted). Since then,it has been building a new base.
QSII - NASDAQ
Quality Systems Inc
COMPUTER SOFTWARE & SERVICES - Healthcare Information Service
$47.38 -$0.28 1/31/2005 $33.50 +41.43% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First featured in CANSLIM.net's Mid-Day Breakouts Report on 1/31/2005 at $33.50 (split adjusted) on a gap open. Issue has steadily advanced until recently when it traded below its 50 DMA.
NNI - NYSE
Nelnet Inc
FINANCIAL SERVICES - Credit Services
$33.27 +$0.22 1/28/2005 $28.85 +15.32% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports 1/28/05 was the first time we featured this leader (Read here) as it gapped open from a flat base and continued trading higher over the next several weeks producing a decent gain.
CDIS - NASDAQ
Cal Dive International
ENERGY - Oil & Gas Equipment & Services
$52.37 +$0.21 1/27/2005 $43.55 +20.25% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Recently featured on 01/27/05 in a CANSLIM.net Mid-Day BreakOuts Report here. Also featured in the February 2005 issue of CANSLIM.net News. Made quick and steady gains and remains perched near highs.
ANF - NYSE
Abercrombie & Fitch Co
RETAIL - Apparel Stores
$68.70 -$0.68 1/6/2005 $49.24 +39.52% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Currently basing after being featured in CANSLIM.net's Mid-Day Breakouts Report on 01/06/05 and again on 05/18/05. A break to new highs with volume would be welcomed.
SONC - NASDAQ
Sonic Corp
LEISURE - Restaurants
$30.53 -$0.02 1/4/2005 $31.50 -3.08% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First highlighted at $31.50 on 01/4/05 and has been basing since.
VMSI - NASDAQ
Ventana Medical Sys Inc
HEALTH SERVICES - Medical Instruments & Supplies
$40.23 +$0.88 12/21/2004 $31.45 +27.92% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured in  CANSLIM.net's Mid-Day Breakouts Report on 12/21/05 at $31.45 (2/1 split adjusted) and has rallied +29% since.
WWW - NYSE
Wolverine World Wide Inc
CONSUMER NON-DURABLES - Textile - Apparel Footwear & A
$24.01 -$0.07 12/15/2004 $24.01 +0.00% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This issue was featured on 12/15/04 with a pivot point of $21.77 and then again at $24.01 on 06/07/05. Read here: 
ASFI - NASDAQ
Asta Funding Inc
FINANCIAL SERVICES - Credit Services
$27.78 -$0.49 12/1/2004 $21.96 +26.50% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This stock has rallied +28% since it was first featured in CANSLIM.net's December 2004 news. Read here:
PRAA - NASDAQ
Portfolio Recovery Assoc
DIVERSIFIED SERVICES - Business/Management Services
$42.02 -$0.13 11/15/2004 $36.36 +15.57% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First featured on 11/15/04 and has rallied nicely since.
 
KBH - NYSE
K B Home
MATERIALS & CONSTRUCTION - Heavy Construction
$76.23 +$1.14 11/9/2004 $63.21 +20.60% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Recently featured in a CANSLIM.net Special Report on 5/20/05 (Read here). Has continued moving higher since.
MTH - NYSE
Meritage Homes Corp
MATERIALS & CONSTRUCTION - Residential Construction
$79.50 +$0.00 10/26/2004 $40.97 +94.04% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured on 10/26/2004 in this CANSLIM.net's Mid-Day Breakouts Report at $40.97. Continued advancing steadily upward. Recently announced a public offering.
STN - NYSE
Station Casinos Inc
LEISURE - Resorts & Casinos
$66.40 -$1.15 10/26/2004 $60.85 +9.12% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports First featured in the July 2004 issue of CANSLIM.net News at $48.40 and again in the November 2004 issue plus several times when it was at a new buy point in CANLIM.net's Mid-Day Breakouts Report.
FRK - NYSE
Florida Rock Inds Inc
MATERIALS & CONSTRUCTION - Cement
$73.35 +$1.35 10/1/2004 $50.90 +44.11% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Bullish action prompted us to highlight this leader in  CANSLIM.net's Mid-Day Breakouts Report on 10/1/2004. It did pull back a bit in the days that followed yet not considerably and overall continued to trend upward until the end of Feb where it started consolidating. Recent action looks great.
ADSK - NASDAQ
Autodesk Inc
COMPUTER SOFTWARE & SERVICES - Technical & System Software
$34.34 +$0.00 8/25/2004 $43.80 -21.60% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Recently slipped below its 50 DMA. Has enjoyed impressive gains since first being featured on 08/23/2004.
BMHC - NASDAQ
Building Materials Hldg
RETAIL - Home Improvement Stores
$69.29 -$1.18 7/29/2004 $19.85 +249.07% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Most recently featured on 11/18/04 in CANSLIM.net's Mid-Day Breakouts Report. Continued moving upward since. First featured back in 2004. Now sits near all time highs.
IMGC - NASDAQ
Intermagnetics Gen Corp
MANUFACTURING - Industrial Equipment & Compone
$30.76 -$0.12 7/13/2004 $23.67 +29.95% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Originally featured at $23.67 (split adjusted) on 07/13/04 and has rallied +30% since then.   
 
PENN - NASDAQ
Penn Natl Gaming Inc
LEISURE - Gaming Activities
$36.50 -$0.11 6/24/2004 $32.16 +13.50% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Status changed from Green back to Yellow as stock has built a new base. First featured on 6/24/04 at $16.08 (Split Adjusted). Remains perched near highs.
SWN - NYSE
Southwestern Energy Co
ENERGY - Independent Oil & Gas
$46.98 +$0.01 6/16/2004 $32.59 +44.15% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Featured on 6/16/2004 in CANSLIM.net's Mid-Day Breakouts Report near $13.5. Has made a steadily advance since and now is above $45.
 
ISSC - NASDAQ
Innovative Sltn & Supprt
COMPUTER SOFTWARE & SERVICES - Business Software & Services
$33.57 +$0.05 5/3/2004 $18.73 +79.23% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports Most recently highlight in CANSLIM.net's Mid-Day Breakouts Report 5/11/2005. Made an impressive move the next morning to new highs yet then sold off on heavy volume. Previously highlighted at $18.73 and featured in 05/03/04 CANSLIM.net Stock Bulletin.
 
JOSB - NASDAQ
Jos A Bank Clothiers Inc
RETAIL - Apparel Stores
$43.30 -$0.45 3/5/2004 $36.85 +17.50% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This stock has rallied +60% since first appearing on CANSLIM.net's Special Report in August 2004. Read Here:
AMHC - NASDAQ
American Healthways Inc
HEALTH SERVICES - Specialized Health Services
$42.27 +$0.66 11/1/2003 $20.73 +103.91% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This stock first appeared in our November 2003 newsletter at 20.73 (split adjusted) and has gone on to rally +110% since. Read Here:
CMTL - NASDAQ
Comtech Telecomm Corp
TELECOMMUNICATIONS - Communication Equipment
$32.63 -$1.01 10/1/2003 $16.04 +103.43% C A N S L I M,  StockTalk, News, Chart , SEC, Zacks Reports This stock has rallied +103% since it was first featured at $16.04 in the October 2003 issue of CANSLIM.net News. Read here:

L= Leader  |  ET = Extended  |  BO = Break Out (new)  |  BV = Big Volume
NC = No Comment  |  F = Fundamentals
C = Current Quarterly Earnings Per Share |  A = Annual Earnings Per Share
S = Shares Outstanding | I = Institutional Ownership

 

 
SPECIAL ARTICLE              
Charting with Candlesticks – Part IV – Seeing Stars - Prepared by Frank E. Testa

We resume our series on Candlestick Charting by analyzing the Morning Star pattern.  Unlike the prior candlesticks (Hammer, Hanging Man, Gravestone Doji, Engulfing Patterns) that we have analyzed, the morning star consists of a cluster of three candlesticks.  However, like most candlestick patterns, the morning star is a reversal pattern that will often alert the astute investor to a possible change in trend. 

Morning Star

The morning star consists of three candlesticks with two large bodies (wide distance between a stock’s open and closing price) separated by a small body (little distance between a stock’s open and closing price) that does not touch the body of the preceding candle.  This pattern develops in a downtrend and signifies that buyers are beginning to wrestle control from the sellers.  The evening star is a top reversal pattern and thus takes place in an uptrend (this will be covered in a future article).

In a downtrend, a large black candle (close is below the stock’s open) is followed by a small real body.  The small real body indicates that sellers are losing the battle to drive the stock lower.  The final candle of the pattern is a long white body that penetrates deeply into the first session’s black candle.  This is an indication that the bulls have seized control from the sellers.  From a trading perspective, stops can be placed right beneath the low of the pattern.

Since this reversal pattern takes three candlesticks, it is possible that by the time the formation is complete, the stock may have moved too far to offer an attractive entry point.  If this situation unfolds, it is recommended to purchase the stock on a light volume pullback. 

An example of a Morning Star is presented below:


 

A bout of profit-taking pushed shares of MGM Mirage (MGM) from the $42.50 level down to the $38.21 mark before buyers regained control.  The morning star pattern began to take shape on June 24th with the issue falling -$0.91 to close at $39.25.  On the following session, MGM witnessed a bearish gap, opening at $38.70 before closing at $38.83 while hitting a session high of $39.30 and a low of $38.21.  The completion of the morning star pattern transpired on June 28th with the stock experiencing a bullish gap up, opening at $39.23 before closing at $39.83.  In between, the stock traded in a $0.90 range, hitting an intra-day high of $40.13 and low of $39.23.
 
 
MARKET   SENSE            
Hold or Sell? - Sleepless Nights with NITE - Article by Soraya Nasrallah, Registered Representative, Source Capital Group, Inc. Members NASD/SIPC 
Regular readers know that I don’t usually write about individual stocks, but I decided to walk you through the action in a recent purchase I made.  This article will explain the action that followed after my purchase on January 8, 2004. I will explain some key reasons why I bought the stock, and why I am currently having sleepless nights over it.  

I purchased some shares of Knight Trading Group Cl A (NasdaqNMS: NITE) at $15.53 based on the following criteria:

  1. Turn around and great increases in earnings and sales revenues over several quarterly comparisons
  2. EPS & RS both above 80
  3. Stock previously gapped up on 07/03/03 and 10/06/03, rising on high volume
  4. On 01/07/04 it cleared a two-month base on very large volume
  5. Quality mutual funds owning the stock have been increasing every quarter (65 funds in Mar ’03, 68 funds in Jun ‘03, 95 funds in Sep ‘03, 97 funds in Dec ‘03) according to Daily Graphs
  6. 0% debt (I have found that many market winners have this characteristic)
  7. 115 million shares outstanding exceeds the 50 million size I usually go for, but the supply of shares is still small enough 
  8. Meaningful ownership interest held by Funds (21%) and the company’s Management (14%)
  9. Great leadership in numerous other broker/dealer issues

From 01/08/04 to 01/21/04 the stock was acting great.  Then came some tough action, as volatility is common around the release of earnings news.  After NITE’s earnings release on January 22nd it declined heavily, closing at its low point on very large volume, yet the stock bounced nicely off its 50-day moving average line.  At least that made me feel good, because it meant the stock was being supported by institutional investors!  Additional selling action often tends to be created when the 50-day line is violated.  For three more days NITE held up nicely above its 50-day line. On 01/27/04 the broader market started to fall, yet NITE continued to stay above its 50 DMA.

On the 28th the market was falling again, and NITE sank and closed below its 50-day line on near average volume. It was a tough day for a lot of brokerage stocks, so I assumed the damage in NITE was due to weakness in the industry group.  My game plan was to sell if the volume in NITE was 50% above average and its price dropped 10% below my cost (which worked out to be $13.98).  Since volume wasn’t very high I decided to hold my position, but I would watch it very closely and only continue to hold if in the days immediately ahead it did not show more serious deterioration.

 

On Thursday the 29th, NITE traded down intra-day to as low as $13.30, yet I continued to hold as it reversed and closed near its high for the day, ending the session only two cents lower at $13.78.  On Friday the 30th it closed up two cents on below average volume.

Conclusion: I have decided to keep watching the price of NITE and its corresponding volume very closely.  We don’t like to be incorrect with our picks, but it is more important to preserve one’s capital for the next idea.   O’Neil suggests that the proper discipline is to always sell whenever a stock falls 8% below your cost, so I know I am taking a big chance, especially due to the volatility of the markets. If NITE deteriorates further on an increase in volume I will be forced to sell.  It is important for NITE to soon repair its 50 DMA violation, which it did in the not too distant past.

 
Soraya Nasrallah, obtained her Series 7 license in 1992, and has served in the capacity of Sales Assistant, Head of Operations Department, and Stockbroker.  Contact Soraya Nasrallah via email at snasrallah@sourcegrp.com or by phone at (954)785-1990 for assistance you with your portfolio. She will be pleased to offer ideas that suit your investment needs, and she can help you achieve the gains you have been searching for.  Miss Nasrallah has just introduced a new educational program called StockWiz News! specifically created for teenagers and novice investors, incorporating stock market basics with CANSLIM in a colorful and picturesque format. It is the perfect gift for those who just don’t know much about the world of stocks and investing!

Comments contained in the body of this report are technical opinions only and are not necessarily those of Source Capital Group, Inc. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities. Source Capital Group, Inc. is a NASD/SIPC member firm. 

 
EDITOR'S  LETTER            
Nation Freezing, Consumer Stressing, Justification, and Welcome

     Ah, halfway through winter and all is well. At least here is sunny Florida, anyway. The Northeast is dealing with a tremendous amount of snow, and there are unusually low temperatures across the country, some falling well below zero. My heart goes out to the folks in cold places, not only for the sake of their comfort, but also for their health and safety.

     I welcome all of our new members!  I am sure you will find our unique service very beneficial in pinpointing good CANSLIM-based buy candidates as well as giving you ongoing commentary from our staff of qualified experts in an educationally-based format. You will also notice our strong commitment to customer service - you are encouraged to call in anytime with questions or concerns.

     There has obviously been a good run for Telecom stocks. I only wish my experience had been the same from the perspective of a customer looking for service from these companies. I just moved into a beautiful two-story town home when I quickly realized that the phone was not working properly. There was so much static on the line, I could barely get a dial tone. More importantly  - considering my business in internet publishing  - connecting to the internet was impossible!  I assumed a call to my provider to schedule a service call was all that was needed to remedy the situation; unfortunately that has not been the case.  My one simple demand on their customer service department seems to be more than they could handle. Their ability to follow up as promised proved utterly non-existent.

     I decided that maybe I would step up and get a wireless PCMIA card for my Tablet PC. After a quick review of various pricing plans, I elected to go with a very well known company that signed me up over the phone. They stated the card I needed was on its way. Well, that was about three weeks ago and I still haven’t received any of the promised equipment. I did, however, promptly receive a bill, despite the fact that I already had paid for everything over the phone with my credit card. I also have received several letters from them, three or four so far. I don’t completely understand what they are trying to convey to me, as the letters don’t specifically say if I even have the service of not. Each letter is identical, except for the date of course. Overall, I've had a poor experience with Telecom from the customer's standpoint.

     With this newsletter deadline quickly approaching (and still no simple internet connection from home) I decided that the another alternative would be a walk across the street to a competitor's store, buy the equipment directly, open the wireless account, and get on-line ASAP. Well, they didn’t have the card in stock as they were fresh out.

     When I returned to the store a few days later my item was still out of stock, but they said they would overnight one to me and it would be in my hands by 10:30AM. Given the poor experience I had previously, I wasn't surprised to be calling them at 12:30PM to ask about my network card's delivery. Finally,  at 4:30PM, the card arrived. Better late than never!  After a short time on the phone with their customer service department (to get help explaining what should have been made more obvious) I was finally able to get myself online from home for the first time since moving into the place 6 weeks ago. Hurray!

     We have been honing our services since 1997, and over that time we have developed several key reports that our experts use to convey the most important market, investing, and individual stock information to our members.   As many of you now, we had a rate increase this month for CANSLIM.net's StockNews annual membership fee from $79 to $199. Some may ask, “Why the steep rate increase? Is it greed?”  No. The reason for the rate increase is simple.  With the StockNews Membership have expanded upon our flagship 12-monthy issues of CANSLIM.net News (which was $79 by itself).  We are now combining all of our services into one all-inclusive package.  For example, our CANSLIM.net Stock Alert Reports give you a detailed analysis of a particular company and how it matches up with CANSLIM letter-by-letter. As a member you'll get every one of these reports (which were previously sold individually for $19.95 each, or discounted in bulk). We also include all CANSLIM.net Special Reports with titles such as “CANSLIM.net’s Top Ten Stocks or "CANSLIM.net's Stocks to Watch in This New Market", while these separate reports previously sold for $39.95 each. We have also recently added our CANSLIM.net Stock Bulletins, concise reports on buy candidates that match up favorably with the winning CAN SLIM® models of the past. 

     Most recently, we added our CANSLIM.net Mid-Day BreakOuts reports that easily show you some of the most buyable breakouts during each trading day. This report is a mechanical screen of our database of high-ranked stocks, and you should pay particular attention to the issues highlighted in yellow as "Noteworthy".  Finally, our new daily CANSLIM.net After-Market Report gives members a concise market commentary, a review of the major sector action, and updates on our most recently featured stocks. Add to this the fact that we have vastly expended our editorial and customer service staff and upgraded our servers to handle the job.  The price of $199 per year is justified in my opinion, and I hope you will agree. 

Please let me know if you have any questions, as I would be glad to assist you.

 

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Comments contained in the body of this report are technical opinions only and are not necessarily those of CANSLIM.net.  The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness can not be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto.  Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.  This is an unsolicited opinion, and CANSLIM.net has not been compensated in any way by the company(s) mentioned in this report.

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