New Comments: This company seems to still be doing well, however it may be worth noting that on its weekly chart it suffered its first losing week on above average volume in the past 13 weeks.  This higher volume without price progress can be considered a sign of at least some amount of distributional selling.  Also, on June 3rd, WR Hambrecht raised its price target for shares of Cost Plus Inc. (CPWM) to $42 from $36, saying the home furnishings retailer is growing earnings, has a strong balance sheet, and is generating positive free cash flow.  We don't recommend paying a lot of attention to analysts' targets, upgrades or downgrades, especially once your dollars are on the line.  Pay attention to the chart, and let it dictate your actions.  For that matter, if this one were to hit Hambrecht's target, it might just as well continue on up to $50, $60or more. 

Technical Analysis: CPWM’s recent breakout above $34 on multiple above-average volume days carries the great significance of clearing its May ’02 and December ’02 chart peaks.  That makes reading its current chart rather interesting.  Study a long-term 5-year chart to get a better sense of this key point, since one might argue that its short-term extended appearance seems to make it lack a proper base for intelligent buying.  Sensibly, one might predict that a challenge and eventual break above the historic $40 all-time highs reached in 1999 & 2000 would be the next important technical hurdle for this stock to clear.  The company has undeniably bullish fundamental and technical trends working for it.

What to Look For and Look Out For: A dip back into the $33-34 area would not violate the short-term upward trend line, and normal consolidation into that range might offer a more ideal entry point.  Previous low closes from 5/19 to 5/21 kept it trading just above $31, and any price deterioration below that level would raise a red flag, while its 50-day moving average line near $30 is the next important support level that comes into play.

Profile: Cost Plus, Inc. is a specialty retailer of casual home furnishings and entertaining products operating World Market, Cost Plus World Market, Cost Plus or Cost Plus Imports stores in 19 states. Many of Cost Plus' products are proprietary or private label, often incorporating its own designs typically not available at other specialty retailers and department stores.

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New Comments: Having traded as much as 12.5% higher since our report, this stock has gotten even more extended from what we consider an ideal buy point.  Even though many of the leaders have just run on and on, not offering a better chance to buy properly, we would advise being willing to let it run.  Wait either for a better entry point, or for another strong buy candidate.  Bending the rules and buying a stock too extended can set you up for more trouble with keeping a proper trading discipline when you may want to bend the rules and hold for more than a 7-8% loss.

Technical Analysis:  Its high-volume breakout on 5/27 and follow-through on 5/28 allowed it to clear a 7-month base and exceed previous highs at $27.70.  Historic 1999 highs near $51 could be the next logical target, yet that would have to include an assumption of continued strong earnings performance from the company.  Again, we’d say a study of a long-term 5-year chart is helpful to get a better perspective.

What to Look For and Look Out For: A dip back into the $27.50-28 area would not violate the short-term upward trend line.  Expect consolidation, and consider taking advantage of any chances to buy on a normal dip.  Meanwhile, any high-volume failure back into the prior base would be a concern.  One would expect tremendous support in the $27 range, and above previous low closes from 5/19 & 5/20 that kept it trading above $26, while its 50-day moving average is also nearby at $25.68. 

Profile: Hutchinson Technology Inc. is a supplier of suspension assemblies for hard disk drives (HDDs) and etched and stamped components used in connection with or related to suspension assemblies holding the recording heads in position above the spinning magnetic disks in the drive.  

For the 26 weeks ended 3/30/03, sales rose 40% to $257.8 million and net income totaled $32.7 million, up from $5.7 million, reflecting higher overall demand and the absence of litigation settlement charges. On Apr 22, 2003 the Company cited higher than expected unit shipments in the second half of the year as the primary reason for it to revise its guidance above analysts' estimates.

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New Comments: The past week looked like a good one for AGP, having dipped and then rallied to a new all-time high closing price on its weekly chart (on above average volume).  There seems to be very little standing in its way, and almost every issue in the HMO group also had a great week.  This provides great confirmation of strengthn and leadership in the industry group, however the Relative Strength rank from IBD actually sank to 68, confounding those of us who watch their ranks closely.  And while it doesn't seem to be a major negative for the company's outlook, on June 3rd the company said its CFO, Scott M. Tabakin, will step down on October 1st for personal and family business reasons.  Meanwhile, Tabakin and Sherri E. Lee, Amerigroup's current treasurer and Tabakin's predecessor as CFO, will help during the transition period.   

Technical Analysis: The latest close on Friday 5/30/03 was the highest on its weekly chart ever, exceeding the 4/19/02 peak at $34.  So, it is clearing a 13-month long base, and to reach $35-36 would carry some significance with respect to the longer-term chart, especially with above average volume (which would be an important confirming factor).  It has been a relatively strong and stable performer through recent years, but the fact that so many other issues have enjoyed more drastic run-ups over recent months contributes to why its Relative Strength rank of just 78 from IBD falls a bit shy of the normal minimum guideline (80) for CANSLIM fans. So, a rise on especially heavy volume would potentially confirm a more significant “buy signal” and help it get a better rank. Its longer-term chart already argues that it should be considered an attractive choice, even though present prices are well above its 50-day moving average of $30.21.

What to Look For and Look Out For: The Medical-HMO group continues to provide great confirming leadership, with pace-setters including CVH and MME, both previously featured CANSLIM.net News.  The stock has been on a 5-week winning streak, and for the short-term could be due for some consolidation.  But a dip into the low $30’s could almost be wishful thinking for prospective buyers, while any high volume weakness is always a reason for caution.

Profile: AMERIGROUP is focused exclusively on the healthcare needs of individuals who receive benefits under the Medicaid, State Children's Health Insurance Program (SCHIP) and FamilyCare programs. It is a multi-state managed healthcare company headquartered in Virginia, operating health plans in Maryland, Texas, New Jersey, Florida, Illinois and the District of Columbia. On May 28, 2003, Chairman and CEO, Jeffrey L. McWaters, was honored to participate with President George W. Bush at the White House signing ceremony, and expressed appreciation and support for inclusion of state aid for Medicaid in the tax bill.

For the three months ended 3/31/03, revenues rose 43% to $391.3 million and net income rose 39% to $13.7 million, reflecting the acquisition of PHP Holdings partially offset by an increase in wages and related costs for additional staff. 

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New Comments: Having traded as much as 14.7% higher since our report, the window of opportunity to make a properly timed purchase was only open for a short time.  Friday's prompt reversal from a strong start and close near its intra-day low may have just signaled that for the time being TSCO is due for a breather.  The market had a similar reversal of fortune on Friday, as many issues gave back earlier gains.  Be watchful, as TSCO could very quickly dip back and retest prior resistance (now a potentially important support level) in the $45 range.  Surviving such a test would obviously be important to the overall outlook for a more sustained advance from the present level.  

Technical Analysis:  Its high-volume gains on 4/16 and follow-through on 5/02 have allowed it to get clear of virtually all overhead supply.  Trading to $46-47 would mark a breakout to 7-month highs from large cup-with-handle type base.

What to Look For and Look Out For: A break above the pivot point, especially on heavy volume, would be a new and potentially significant “buy signal”.  For the short-term, however, a caution flag is raised by the fact it has yet to see a higher than average volume up day to indicate heavy buying conviction since its recent 5/19/03 gap down.  That intra-day bounce, however, marked a successful test of support near its 50-day moving average line and upward trend line.  Any violation of the most recent low closes on 5/19 & 5/20 could be more than normal consolidation, while another dip into the $41-42 area would put it on the verge of a more critical failure.

Profile: Tractor Supply Company is an operator of 433 retail farm stores in 30 states (as of December 28, 2002).  It offers a comprehensive selection of merchandise: livestock and pet products, including items necessary for their health, care, growth and containment; maintenance products for agricultural and rural use; hardware and tool products; seasonal products, including lawn and garden power equipment; truck, trailer and towing products, and work clothing for the entire family.

For the 13 weeks ended 3/29/03, sales increased 41% to $273.8 million and net income before accounting change totaled $2 million vs. a loss of $4 million.  Revenues rose as a result of the addition of new stores and net income reflected higher gross margins.  On April 15, 2003 the company confirmed its expected net sales to a range between approximately $1.39 and $1.42 billion, with net income expected to range between approximately $52.5 million and $53.5 million, a 35% to 38% improvement.

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New Comments: For what it may be worth, CREE did not make much in the way of meaningful price progress (it gained 50 cents or 2%) despite having traded above average volume for its first week in seven.  There is a little something new (the N in CANSLIM) from the company, which could be considered a good indication.  On June 3 the company announced the introduction of its MegaBright® Plus(TM) and XBright® Plus(TM) blue light emitting diodes (LEDs). The typical brightness level for the new MegaBright Plus device is approximately 30 percent higher than Cree's MegaBright product, and the typical brightness level for the new XBright Plus device is approximately 20 percent higher than Cree's XBright product. 

Technical Analysis:  The break above the pivot point and new high close cleared a 6-month base on Friday 5/30/03, but on just 25% above average volume.  A better standard for breakouts would be to have a 50% or more volume increase.  So, for the near-term, progress above its 12/02/02 high of $25.42 on especially heavy volume may potentially confirm a more significant “buy signal”.

What to Look For and Look Out For: Following its 4/17/03 gap down the stock was successful in finding support near its 50-day moving average line.  Of course, any reversal and break of that important short-term average would be bad news.   We normally suggest choosing companies at all-time highs, yet CREE clearly has some history (including a 2000 peak near $101) that may haunt it.  As long as the company can continue its recent very strong trend of greatly improved fundamentals, and the Semiconductor sector continues to provide confirming leadership, this stock may be considered an attractive choice.

Profile: Cree, Inc. develops and makes compound semiconductor materials and electronic devices made from silicon carbide (SiC), optoelectronic and electronic devices made from gallium nitride (GaN), and produces radio frequency (RF) power transistor components and modules for wireless infrastructure applications. The firm s a high-ranked leader in silicon-based bipolar and laterally diffused metal oxide semiconductor (LDMOS) process technologies.

For the 39 weeks ended 3/30/03, total revenues increased 41% to $165.8 million and net income totaled $23.5 million vs. a loss of $79.2 million, reflecting strong demand for LED and continued improvement in its operating model, and the absence of a $6.8 million goodwill and intangible asset amortization.

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New Comments: There is not any significant news out since it was featured, however this stock has traded up to 12.3% higher.  After gapping up on Friday, however, it reversed (along with a lot of the market) and closed near its session lows. Don't rule out the possibility that it might dip back further.  Some retesting of support in the $38 range (or under $40 anyway) could be a possibility.  

Technical Analysis:  The latest close was the highest on the weekly chart since July 2001, so while the break above the pivot point and new high close a 5-month base on Friday 5/30/03 carry some significance, a look again at the longer-term chart shows the more important picture of a long-term breakout occurring.  Above average volume has been a missing factor in recent week, and yet from historic studies we do not often see stocks quietly and almost casually treading into new high or new low territory.  So, especially heavy volume would potentially confirm a more significant “buy signal”.

What to Look For and Look Out For:  MERQ also has some history (including a 2000 peak near $162) that may haunt it.  Yet as long as the company can continue its recent very strong trend of greatly improved fundamental earnings and sales, and the Computer Software-enterprise sector continues to provide confirming leadership, this stock may be considered an attractive choice.

Profile: Mercury Interactive Corporation is a provider of integrated performance management solutions that enable businesses to test and monitor their Internet applications, helping to improve the performance, availability, reliability and scalability of Websites.  It offers solutions for application performance management (APM). It enables customers to optimize the quality of their information technology (IT)-delivered services, align IT execution with business goals and reduce spending throughout their IT infrastructure to meet key business objectives.  

For the three months ended 3/31/03, revenues rose 22% to $110.4 million and net income rose 20% to $18.1 million, reflecting higher subscription and maintenance revenues, partially offset by increased personnel costs.

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