DOW 10,783.75 YTD -1.99% |
S&P 500 1,228.81 YTD 1.39% |
Nasdaq 2,151.69 YTD -1.53%
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THIS
MONTH'S |
SPECIAL
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NOTICE
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This report is now PRINTABLE as an Adobe
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CURRENT |
MARKET |
CONDITIONS |
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A review of market conditions over
the prior month - the important "M" in CANSLIM.
Markets End Quarter Higher
-
Adam
Sarhan
Every so often, events occur that truly change the world’s
collective psyche. Hurricane Katrina was undoubtedly one of these
numbing events. Katrina plowed through the Gulf
Coast, claimed lives, leveled an entire region, sent
energy prices to new record highs, and literally drowned a major
US city. Shortly thereafter, Hurricane Rita decided to pay
Texas and Louisiana a visit as it pounded the
two battered states and shuttered several key oil facilities in the
region. That being said, one would expect the US
economy and its capital markets to have plummeted in the storms’
aftermath. However, this was not the case. Actually, it brings to
mind a great market adage that says, “Those that bet against the
American consumer are destined for failure.” Once again, there is
truth to these words.
On average, the major indices
ended the month slightly higher then their pre-Katrina levels. The
market rallied in the face of not one, but two, monstrous
hurricanes. Katrina and Rita were the most costly natural disasters
on record, caused billions in physical and psychological damage,
sent energy prices to new all time highs, and effectively shut down
much of the Gulf
Coast. The market also rallied after the Fed
decided to continue raising rates for an 11th
consecutive time to combat inflation. Pre- Katrina, one may have
argued that any of these factors would be strong enough to cause
material economic damage. Hindsight nullifies that thesis.
September began with investors
watching the recovery campaign begin in earnest. Congress
immediately approved a $10.5 billion aid package for the
Gulf Coast
as “the cavalry” began arriving with food and supplies. Initially,
it was difficult to assess the total damage but a consensus of
$100 billion was quickly formed. The immediate effect that
resonated throughout the country was a surge in energy prices.
Analysts scurried as they tried to assess the damage upon the
various energy facilities located in the region. In many parts of
the country, gas prices vaulted to over $3.00 a gallon.
The Nasdaq closed +1%
higher in the first few days of September that snapped a four week
losing streak. The other major indices also closed higher but
volume, a key indicator of institutional activity waned. In the
immediate aftermath of Katrina crude oil spiked to $70.10 a
barrel in overnight trade, but spent the reminder of the month
hovering around the mid 60’s. The Labor Department reported
that the US economy added +169,000 jobs in
August, which was lower than the 190,000 jobs analysts had
forecasted. It is important to note that the data was collected
pre-Katrina. Other economic news was also bearish. The Institute for
Supply Management’s August index declined -3 points to
53.6 which was below estimates. The NAPM-Chicago purchasers’
index also showed signs of weakness as it sank -14.3 points
to 49.2. This was the first time since 2003 that the index
dropped below 50. A reading below 50 indicates
contraction.
With crude oil trading a few
points from its all time highs, the beleaguered airline industry saw
two of its largest carriers fold. Late in the day on Wednesday
September 14, 2005, Delta Airlines (DAL) announced that it had filed
for Chapter 11 bankruptcy protection. Less than an hour later,
Northwest Airlines (NWAC) followed suit. Both, individuals and
corporations that are contemplating bankruptcy are doing so before
the new law will be implemented on October 17, 2005.
As
authorities rushed to aid Katrina’s victims, President Bush pledged
another $51.8 billion in Federal aid for recovery efforts and
offered victims $2,000 debit cards for food and clothing. As
the situation on the ground improved, the markets continued
advancing. Investors spent the first two weeks of September
searching for clues on the Fed’s next move. One school of thought
argued that the Fed should “pause” and not raise rates to alleviate
unnecessary pressure on the economy. The other school of thought
argued that the Fed should continue raising rates in order to combat
inflation. Needless to say, the Fed agreed with the latter and
raised their overnight lending rate by another quarter point to +3.75% for an 11th consecutive time when they met on
September 20.
Less than three weeks after
Katrina slammed into the
Gulf
Coast; Hurricane Rita brewed
in the
Atlantic and set its sights for the affected
region. Rita narrowly missed the Florida Keys, but quickly
strengthened in the warm waters of the Gulf of Mexico to a Category
5 storm; as it raced towards
Houston,
Texas. Thankfully, Rita weakened and changed course away
from the heavy populated Houston/Galveston area. Then on September
23, Rita made landfall near the Texas/Louisiana border. Luckily,
many oil refineries that are located in and around
Houston
were spared.
The major indices ended the quarter
little changed from their pre-Katrina levels. Even though the major
indices did not lose ground, consumer confidence had its largest
decline in 15 years. Consumer confidence plummeted -18.9 points in September to
86.6. This was markedly
lower than the Street's forecast of 98. Consumer spending is
a vital component of the economy and many feared that the dive in
sentiment after Hurricanes Katrina and Rita could adversely affect
future economic activity.
The major indices are still
entrenched in a volatile trading range,
putting more importance on individual group action. Over the past
few months the major indices have hardly budged but individual
sectors have experienced simultaneous minor bull (oil and gold) and
bear (homebuilders & retailers) markets. The internals of the
market, which have been holding up rather nicely over the past
several months, began heading south in latter half of the month.
For the month, the major indices ended
mixed, the Nasdaq lost -0.02%, while the S&P 500
gained 0.7% and the Dow ended 0.8%
higher. However, the major indices performed rather nicely in the
third quarter. The Nasdaq led the way, advancing +4.6%,
while the S&P 500 added 3.1%, and the Dow finished
+2.9% higher. As always it is important to continue
following price and volume action for signs of further strength and
weakness.
 Adam
Sarhan - is the publisher of The Sarhan Analysis. He is
bilingual and well schooled in fundamental and technical
analysis. Mr. Sarhan's portfolio selection, asset allocation
and technical skills are notable. Through his discipline
& expertise in both equity and commodity markets he is able
to take advantage of both long and short opportunities.
Furthermore, he adds expertise in alternative investment
vehicles that allows him to adjust his portfolio exposure
ahead of major economic trends. Mr. Sarhan earned a MA in
Political Science from Florida Atlantic University and is
well versed in capital markets. He sits on the board of
The Sarhan Analysis, LLC and GG Limited, Inc. He also, is
an active participant in local charities.
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MARKETS
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LEADING |
GROUPS |
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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 CANSLIM-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 |
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1 |
ENERGY |
NGS, 3.72%, 21 |
PBR, 2.89%, 16 |
EOG, -3.11%, 14 |
VTS, -4.31%, 13 |
NBR, -2.26%, 12 |
STO, 1.87%, 11 |
EAC, 0.96%, 11 |
GRP, 3.54%, 10 |
HAL, 3.01%, 10 |
SWN, -1.03%, 10 |
APC, -0.41%, 9 |
WFT, 1.82%, 8 |
DRQ, -0.07%, 8 |
SSL, -2.99%, 8 |
UPL, 0.82%, 7 |
VLO, 9.58%, 6 |
BR, 4.53%, 6 |
XTO, 3.43%, 6 |
WGR, 2.70%, 6 |
ATLS, -0.28%, 5 |
BHI, -0.81%, 5 |
APA, -1.69%, 5 |
SM, 2.90%, 4 |
CAM, -1.90%, 4 |
COP, -1.93%, 4 |
DNR, -6.74%, 4 |
| PTEN, 0.09%, 3
| UNT, -1.72%, 3
| NE, -0.47%,
2 | SPN,
-2.97%, 2 |
OIS, 0.76%, 1 |
HYDL, -1.37%, 1 |
REM, -5.98%, 1 |
BRY, -6.47%, 1 |
KWK, -6.75%, 1 |
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2 |
HEALTH SERVICES |
CVH, 0.97%, 12 |
ACL, -3.20%, 11 |
PSYS, -5.29%, 11 |
LABS, -0.16%, 10 |
THOR, -3.54%, 10 |
RESP, -1.93%, 9 |
CMX, -1.52%, 8 |
HUM, 1.11%, 7 |
ESRX, -0.07%, 7 |
SMBI, -0.67%, 7 |
MNT, -4.45%, 6 |
AMHC, -4.27%, 5 |
WLP, 0.00%, 4 |
CUTR, -0.04%, 4 |
CYH, -5.54%, 4 |
RMD, -4.38%, 3 |
DJO, -7.07%, 2 |
| RCI, -0.13%, 1
| USPI, -3.60%, 1
| CNXS,
-13.74%, 1 |
|
3 |
METALS & MINING |
RIO, -6.06%, 16 |
GG, -2.90%, 15 |
RGLD, 1.62%, 11 |
PCP, -1.51%, 9 | BHP,
-3.81%, 7 |
FDG, 0.10%, 5 |
NX, -2.95%, 3
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4 |
MATERIALS & CONSTRUCTION |
WLS, 2.84%, 12 |
EXP, 0.53%, 8 |
BHS, -0.18%, 7 |
FRK, -1.72%, 5 |
FPI, 3.99%, 4 |
MLM, -2.57%, 4 |
CBI, 7.93%, 1 |
LAYN, 0.04%, 1 |
USG, -0.22%, 1 |
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5 |
ELECTRONICS |
NVDA, -1.10%, 15 |
MSCC, 1.43%, 11 |
TXN, -0.97%, 7 |
MRVL, -0.21%, 6 | DIOD,
-6.57%, 4 |
|
6 |
UTILITIES |
EGN, 1.35%, 15 |
STR, 1.52%, 11 |
WTR, -4.44%, 8 |
EQT, 1.75%, 4 |
KMI, -3.03%, 1 |
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7 |
DRUGS |
SRLS, -5.94%, 9 |
KG, -1.80%, 8 |
VIVO, -3.04%, 7 |
AMGN, -4.90%, 6 |
QDEL, -7.71%, 6 |
TECH, 3.11%, 3 |
DNA, 2.44%, 1 |
USNA, -1.76%, 1 |
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8 |
DIVERSIFIED SERVICES |
FADV, -2.47%, 8 |
FIC, 0.54%, 7 |
CME, -11.87%, 5 |
GYI, -0.16%, 3 |
GIN, -1.78%, 2 |
RECN, -6.24%, 2 | FCN,
-4.08%, 1 |
|
9 |
WHOLESALE |
CEDC, -0.81%, 12 |
DXPE, -6.81%, 12 |
WSO, -0.41%, 10 |
INT, -3.45%, 2 |
|
10 |
FINANCIAL SERVICES |
ASFI, -1.84%, 10 |
ITG, -1.75%, 8 | AMTD,
-3.77%, 6 |
ET, -6.16%, 6 |
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
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INVESTING FOR |
THE
NEW |
MILLENNIUM |
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Standing on the "Rock" of CAN SLIM™
-
Kenneth J. Gruneisen
While visiting the sunny southern coast of Spain, I
looked out at the Mediterranean Sea and spotted the very recognizable
silhouette of Gibraltar. Although I had never seen it before, the shape
of the “rock” was easy to distinguish from other mountains on the
visible skyline. Later, I found myself inspired to relate this
observation back to what I do at work every day – spotting CAN SLIM™
stocks.
Gibraltar is in a very smart strategic location. It juts out into the
sea and helps to create a very tight bottleneck through which all ships
entering or exiting the western mouth of the Mediterranean must pass.
In a similar way, CAN SLIM™
stocks are very smart strategically. They are standouts, and once you
know their characteristics, it is hard to pass them by without stopping
and recognizing them.
On a
tour, I was told that the entire territory of Gibraltar is less than six
square kilometers. For such a small piece of land, the nearly 1,400 feet
that it rises above sea level is definitely dramatic and extraordinary.
On clear days you can see across the Straits of Gibraltar to the
northern tip of Africa, approximately 14 miles away. Well, I don’t
think it would be fair to say that every single stock that rises
substantially must pass through the “Straits of CANSLIM”, but your odds
of spotting a huge winner are definitely helped by always being on the
lookout for high-ranked leaders that stand above the rest. And if you
are at all familiar with some of the big CAN SLIM™-based
winners, of course, you also know how dramatically they can rise in a
short span of time.
Some
things about Gibraltar do not seem to make a lot of sense to visitors.
Why is this one small, unique chunk of land actually U.K. territory and
not a part of Spain? To a guy from Florida, like me, this seems about
as ridiculous as if Key West was part of Canada, such that you would
have to show your passport and go through immigration whenever coming or
going. The idea of making Gibraltar officially a part of Spain has been
proposed on several occasions, however, whenever given a chance to voice
their opinion, by vote well over 90% of the approximately 30,000
residents of Gibraltar wish to stay exactly as they are.
Similarly, there are often things about CAN SLIM™
stocks that do not seem right to certain investors. They will look at a
stock and perhaps be nervous about its low average daily volume. If a
stock has risen substantially, they might be afraid it is too late, so
they might fish around for a bargain in the penny stock arena instead.
Or they may be extremely worried about small cap stocks and decide that
they want to own blue chips. If company management owns a large
percentage of the shares, such a huge insider interest might spook some
investors. The point is, you can always find something to worry about
that is not perfect in a stock, and it is easy to start second guessing
your selections. If you want a chance at above average gains you
eventually have to stick your neck out. So, sometimes you need to be
able to accept certain things as they are and just know and have
confidence that employing a proper sell discipline will protect you in
the event of a downturn. Please do not take that as a suggestion to be
too lax with the guidelines for proper purchases.
What
else can be said about Gibraltar as it relates to CAN SLIM™?
Those who understand and refer to the legendary landmark in speaking
would say that when something does not move or change it simply stands
there “like the rock of Gibraltar” and does not budge. When hearing
occasional suggestions by those individuals who challenge whether or not
CAN SLIM™
investing still works, I know better than to question it. The
methodology is as effective today as it ever was, even though there are
those who might suggest otherwise.
Whenever a company produces outstanding earnings results, increasing at
least by +25% in quarterly reports versus the year earlier (satisfying
the “C” in CAN SLIM™),
there will be institutional money managers who take notice. They want
to own fundamentally superior stocks, so they buy. Their buying is has
the logical impact on the supply/demand situation, and a direct impact
on what happens to share prices. So, this is the rock upon which I will
continue to stand.
 Kenneth
J. Gruneisen - Has successfully completed the CANSLIM Certification
Program. Mr. Gruneisen is a Registered Principal and manages a Source Capital
Group (Member NASD,SIPC) branch office offering 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.
The recommendations made by CAN
SLIM certified individuals are their own and may not be
attributed to the CAN SLIM Certification Program, William
O'Neil & Co., Investor's Business Daily or their
affiliates. The CAN SLIM Certification indicates only that the
individual has successfully completed the CAN SLIM
Certification Program. CAN SLIM, William O'Neil & Co.,
Investor's Business Daily and any of their affiliates are in
no way responsible for any loss or damage caused as a result
of the services provided by these individuals.
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.
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Source Capital Group, Inc. |
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Members NASD/SIPC
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We Are:
- Registered Investment
Advisors
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Kenneth
J. Gruneisen
665 S.E. 10 Street, Suite 201
Deerfield Beach, FL 33441-5634
954-785-1990 1-888-237-8399
Email:
kgruneisen@sourcegrp.com
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STOCKS
TO |
WATCH IN
THIS |
NEW MARKET |
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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 CANSLIM
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.
|
Quanex
Corporation |
-
Kenneth J. Gruneisen |
|
Ticker Symbol:
NX |
Industry Group: Metal Proc &
Fabrication Group |
Shares Outstanding:
25,300,000 |
|
Price:
$66.22 (9/30/2005 close) |
Day's Volume: 619,800
(09/30/05 close) |
Shares in Float:
24,300,000 |
|
52
Week High:
$67.71-$31.80 |
50-Day Average Volume:
280,500 |
Up/Down Volume Ratio:
1.2 |
|
Pivot Point:
$64.05 |
Pivot Point +5% = Max Buy Price:
$67.25 |
Web Address:
www.quanex.com
|
CANSLIM.net Profile: Quanex
Corporation manufactures engineered materials and components
for the vehicular products and building products markets. It
operates in two segments, Vehicular Products and Building
Products. The Vehicular Products segment includes engineered
steel bar operations, impact-extrusion operations among
others. The Building Products segment produces mill finished
and coated aluminum sheet, and various engineered products
for the building products markets. The company offers a
large array of products that have helped earnings swell from
double digits (50% quarter ending
10/31/2004) to triple digit growth in the three quarters
that followed (+385, +353,
& +109, respectively) more than satisfying
the “C” in CANSLIM). In addition, the firm is a strong
leader in the Metal Proc & Fabrication Group, a group now
ranked 81st on IBD’s 197 Industry
Group list, helping this selection meet the “L” in CANSLIM.
Quanex operates in the United States, Mexico, Canada, Asia,
Europe, and other foreign countries. Two areas where this
candidate can improve are: the 12% return
on equity, which is lower than the 17%
guideline and the management ownership of 4%.
The company was founded in 1927 as Michigan Seamless Tube
Company and changed its name to Quanex Corporation in 1977.
Quanex is headquartered in Houston, Texas. Quanex
Corporation acquired Mikron Industries, which manufactures
engineered vinyl and thermoplastic alloy composite window
components, window coverings, and door components, in
December 2004.
C
A N
S L
I M |
StockTalk |
News |
Chart |
SEC |
Zacks Reports
What to Look For and What to Look Out
For: NX, featured in Friday's Mid-Day Breakouts report (read
here), is still under its maximum buy price. An early
technical failure to watch out for would be if this issue
violated its pivot point ($64.05). If that
were to occur then its bullish breakout will be negated.
However, now that NX has cleared all prior overhead supply,
should this issue continue advancing, be careful not
to "chase" it past the maximum buy price as risk
increases at higher levels. As always, stop losses should
be placed 7-8% below your entry point to preserve
capital.
Technical
Analysis:
On
September 29th NX blasted through its pivot
point on more than +4.5 times average
turnover, cleared a +7 month base and all
previous resistance. On September 30th, NX
followed through and closed below its maximum buy price
offering another buying opportunity. The bullish breakout on
higher than average volume coupled with the follow through
has thrust this issue to the coveted 52-week high list.
|
BP Prudhoe Bay Royalty Trust |
-
Kenneth J. Gruneisen |
|
Ticker Symbol:
BPT |
Industry Group:
Diversified Investments |
Shares Outstanding:
21,400,000 |
|
Price:
$79.12 (9/30/2005 close) |
Day's Volume:
166,500 (09/30/05 close) |
Shares in Float:
21,200,000 |
|
52 Week High:
$79.99-$38.51 |
50-Day Average Volume:
166,400 |
Up/Down Volume Ratio:
1.0 |
|
Pivot Point:
$80.09 (8/12/05 high +.10) |
Pivot Point +5% = Max Buy Price:
84.10 |
Web Address: N/A |
CANSLIM.net Profile: BP
Prudhoe Bay Royalty Trust operates as a grantor trust in
the United States. The trust holds overriding royalty
interest in the Prudhoe Bay Unit located on the North
Slope in Alaska. The royalty interest constitutes a
non-operational interest in minerals, which entitles the
trust to a royalty on +16.42% of the
first +90,000 barrels of the average
actual daily net production of oil and condensate per
quarter. These royalties have helped this company
increase its earnings by an impressive +82%,
+110%, +130% in the
past three quarters. The annual earnings history (the
“A”) has shown solid increases in the past three years,
which helps reassure investors of strength in the
underlying fundamentals of the company. The company is
a leader in the solid Oil&Gas-US Royalty Trust Group, a
group now ranked 50th on the
197 Industry Groups list, helping this selection
meet the “L”. Sales have accelerated during the past
four quarters rising from +3% to +126%,
which is no small feat. BP Prudhoe Bay
Royalty Trust was formed in 1989 and is based in New
York City.
C
A N
S L
I M |
StockTalk |
News |
Chart |
SEC |
Zacks Reports
What to Look For and What
to Look Out For: BPT is currently perched
near resistance and it would be encouraging to see
this issue break above its pivot point of $80.09 on
at least +50% above average trade
volume. If this were to occur,
then a buy signal would be triggered. With strength
continuing in the group it is worth considering for
purchase upon seeing heavy trading above the pivot
point. On the other hand, if this issue fails to
trigger a technical buy signal, then prices could
fall towards support. A break below the 50 DMA
would cause concern, and a violation of prior chart
lows ($73.56) with high volume would be a bad
technical failure and sell signal. This issue
reiterates the importance of waiting for a stock to
move through its pivot point before initiating a
position. Also, it is important to note that this
issue has enjoyed a considerable advance from its
'03 lows in the $13 range, so it
would be fair to call it a late stage base, and thus
it could be failure prone. That gives you all the
more reason to mind your 7-8% stop
losses.
Technical Analysis: From its
peak July 8th BPT began tracing out
a three month flat base with resistance at August
12th high of $79.99 and support
near August 18th low of $70.30. The
50 DMA line is currently residing in the middle of
the present base. A bullish breakout would occur
if buying demand managed to send prices above
$80.09 (pivot point) on at least
+50% above average volume. If that
were to occur then all resistance at prior chart
highs would be cleared. BPT currently sports a
healthy 88 Relative Strength
rating. It would be encouraging to see the relative
strength line break out to new highs before the
actual stock does.
|
Each month the above
selections are compiled by several of our expert contributors who hand-select
these ideas:
Kenneth J. Gruneisen
- Registered Principal, managing a Source Capital Group (Member
NASD,SIPC) branch office and offering personalized assistance.
(954) 785-1990 or (888) 237-8399 or email
kgruneisen@ sourcegrp.com |
Frank E. Testa - An independent
investment analyst and devoted practitioner of the CANSLIM methodology.
Frank's investment experience spans more than 20 years. He is presently
a Level 3 Chartered Market Technician (CMT) candidate in the Market
Technicians Association's (MTA's) certification program. |
Adam Sarhan -
is the publisher of The Sarhan Analysis. He is well schooled in
fundamental and technical analysis. Mr. Sarhan's portfolio selection,
asset allocation and technical skills are notable. Through his discipline
& expertise in both equity and commodity markets he is able to take
advantage of both long and short opportunities. Mr. Sarhan earned
a MA in Political Science from Florida Atlantic University and is
well versed in capital markets. He also, is an active participant
in local charities. |
Richard Miller, Ph. D - Statistics
professional and serious trader with years of technical analysis-based
trading. He currently manages six different portfolios. He maintains
his own of stock analysis website. To learn more visit
TripleScreenMethod.com
or email him directly at
rwmill@yahoo.com |
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FEATURED STOCKS
|
MONTHLY |
REVIEW
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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 |
AAPL - NASDAQ
Apple Computer Inc
COMPUTER HARDWARE - Personal Computers |
$53.61 |
$1.27 |
8/24/2005 |
$46.82 |
+14.50% |
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Featured on
8/24/05 as ranks became within the guidelines. Had immediately
advanced until recently where it pulled back and successfully
tested its upward trendline. It now sits near all-time highs.
Still waiting for a high volume (+50%) advance that would
trigger a technical buy signal. |
ABCO - NASDAQ
Advisory Board Company
DIVERSIFIED SERVICES - Business/Management Services
|
$52.03 |
$0.49 |
5/6/2005 |
$43.11 |
+20.69% |
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Had been in
steady uptrend since featured until recently when it dipped
below it 50 DMA. Has recovered since and now is near all-time
highs. |
ADVNB - NASDAQ
Advanta Corp
FINANCIAL SERVICES - Credit Services |
$28.23 |
($0.20) |
6/7/2005 |
$26.31 |
+7.30% |
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Ran up in a
steady uptrend since first featured, then pulled back below its
50 DMA, yet remained well above its featured price. Then was
consolidating until Friday (9/30) when it dramatically dipped
intra-day yet reversed to close off just 20 cents. Remains in
uptrend since featured and now sits near all-time highs. |
AET - NYSE
Aetna Inc
HEALTH SERVICES - Health Care Plans |
$86.14 |
$1.44 |
9/8/2005 |
$83.93 |
+2.63% |
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Recently broke
above the pivot point we gave but not on enough volume to
trigger a technical buy signal. Has yet to trigger a technical
buy signal since featured. An above average volume (150%) break
above the pivot ($85.32) would trigger a technical buy signal. |
AMED - NASDAQ
Amedisys
HEALTH SERVICES - Home Health Care |
$39.00 |
$0.39 |
6/21/2004 |
$30.65 |
+27.24% |
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Dipped below
50 DMA since first featured then made a decent advance until it
consolidated for several months. Recently broke out of
consolidation and below its 50 DMA. |
AMGN - NASDAQ
Amgen Inc
DRUGS - Biotechnology |
$79.67 |
($0.10) |
9/9/2005 |
$84.49 |
-5.70% |
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Still below
support of its 50 DMA. Has yet to trigger a strong technical buy
signal since featured. |
APA - NYSE
Apache Corp
ENERGY - Independent Oil & Gas |
$75.22 |
($1.44) |
8/11/2005 |
$72.37 |
+3.94% |
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Dipped to just
below its 50 DMA just after being featured. Then continued
basing until a gap open. Now is just off of all-time highs. A
break above the new pivot on above average volume (+50%) would
trigger a technical buy signal. First featured in a CANSLIM.net
Mid-Day BreakOuts Report (yellow) on 08/11 with a DailyGraph®
here.
|
ASFI - NASDAQ
Asta Funding Inc
FINANCIAL SERVICES - Credit Services |
$30.36 |
($0.31) |
6/16/2005 |
$28.52 |
+6.45% |
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Featured on
6/16/05. Initially dipped and found support near its 50 DMA yet
then broke below to its 200 DMA before charging to all-time
highs before again dipping below it 50 DMA. Now is just above
it. |
ASR - NYSE
Grupo Aeroportuario Adr
TRANSPORTATION - Air Services, Other |
$39.90 |
$0.57 |
7/8/2005 |
$33.43 |
+19.35% |
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Has been in an
uptrend since featured. |
ATLS - NASDAQ
Atlas America Inc
ENERGY - Oil & Gas Drilling & Explorati |
$48.85 |
($0.03) |
8/1/2005 |
$44.00 |
+11.02% |
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Featured as it
was breaking out from a cup with handle like pattern. Did soon
dip and test its 50 DMA before making a uptrending advance where
it now sits at all-time highs. Great group and highly ranked.
Did soon dip and test its 50 DMA before making a uptrending
advance where it now sits at all-time highs.
|
BPT - NYSE
B P
Prudhoe Bay Rylty Tr
ENERGY - Oil & Gas Refining & Marketing |
$79.12 |
$0.14 |
9/29/2005 |
$78.37 |
+0.96% |
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Has yet to
trigger a technical buy signal since just featured 09/29/05.
Nearing the pivot point we have of $80.09. A break above there
on above average volume would trigger a technical buy signal.
June '04 'C' is below guidelines but it has been increasing
since. Other ranks look good and a great group. Just featured
with a DailyGraph(R) here. |
BZH - NYSE
Beazers Homes
MATERIALS & CONSTRUCTION - Residential Construction
|
$58.67 |
$0.70 |
2/1/2005 |
$51.00 |
+15.04% |
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Made minimal
gains since featured then trading below any investors stop loss
point before moving to new highs. Recently broke it 50 DMA and
now sits just below it. |
CB - NYSE
Chubb
INSURANCE - Property & Casualty Insurance |
$89.55 |
$0.85 |
5/4/2005 |
$83.51 |
+7.23% |
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Initially
dipped just after being featured then yet held above support of
the recent base before steadily advancing to all-time highs.
recently trading under its 50 DMA yet well above the featured
price. Has been consolidating near all-time highs. |
CBG - NYSE
C B
Richard Ellis Group
REAL ESTATE - Property Management/Development |
$49.20 |
$0.41 |
6/20/2005 |
$41.63 |
+18.18% |
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Featured on
6/20 at $41.63. Initially made good gains then pulled back yet
held well above support and consolidated until it neared its 50
DMA where it advanced with a solid gap open. Then it dipped
below it 50 DMA before advancing to $50. Has had resistance at
$50 and a break above there would be significant. Ends the month
with a new high close. Has made decent gains since being
featured. |
CDIS - NASDAQ
Cal
Dive International
ENERGY - Oil & Gas Equipment & Services |
$63.41 |
($0.37) |
1/27/2005 |
$43.45 |
+45.94% |
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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
gains and then consolidated near it 50 DMA before going on to
make new highs before it recent pullback below the 50 DMA. It
quickly moved up from there and now is at all-time highs. |
CERN - NASDAQ
Cerner Corp
COMPUTER SOFTWARE & SERVICES - Healthcare Information
Service |
$86.93 |
$0.13 |
9/6/2005 |
$81.12 |
+7.16% |
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Featured on a
big volume breakout, it then came back to test support near the
recent base. Now near all-time highs. |
CLFCE - NASDAQ
Center Financial
|
$23.50 |
$0.01 |
11/5/2004 |
$19.97 |
+17.68% |
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First featured
as it was breaking out of a flat base. Traded sideways for a
time until getting hit with selling on 3/24/05 & 3/28/05 pushing
it under it 50 DMA. Re-highlighted on 6/20/05 and made steady
gains since recently when it was again knocked below its 50 DMA.
Since has recovered and ran to just off of all-time highs though
now is below its 50 DMA. |
CME - NYSE
Chicago Mercantile Xchng
DIVERSIFIED SERVICES - Business/Management Services
|
$337.30 |
$4.25 |
6/2/2005 |
$228.37 |
+47.70% |
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Featured from
a big volume breakout and has made a steady until the end of
July where it started a normal consolidation. Recently has been
in a uptrend and is at all-time highs. |
CMX - NYSE
Caremark R X Inc
HEALTH SERVICES - Specialized Health Services |
$49.93 |
$0.13 |
8/9/2005 |
$47.00 |
+6.23% |
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First
triggered a technical buy signal when first featured on 8/9/05
then pulled back to support of the recent base yet held above
the featured price. Had a couple of dips since yet held above
support of it s 50 DMA. Now is at all-time highs. An above
average volume advance up to the max buy price ($48.24) would
trigger a technical buy signal. Has yet to do so.
|
COH - NYSE
Coach
CONSUMER NON-DURABLES - Textile - Apparel Footwear & A
|
$31.36 |
$0.17 |
3/3/2005 |
$29.28 |
+7.10% |
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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. Recently featured on 03/03/05 in a
CANSLIM.net Mid-Day BreakOuts Report then dipped past any
investors stop loss point. Most recently featured 06/01/05 and
has produced steady gains since until recently when it dipped
below its 50 DMA. |
CVH - NYSE
Coventry Health Care Inc
HEALTH SERVICES - Health Care Plans |
$86.02 |
$1.54 |
1/31/2005 |
$56.84 |
+51.34% |
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This leader
was first featured on 08/02/04 in the August 2004 issue of
CANSLIM.net News at $51.11 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 that day
at $56.57 (split adjusted). Since then it had a nice run and is
now sits near all time highs. |
CYH - NYSE
Community Health Systems
HEALTH SERVICES - Hospitals |
$38.81 |
$0.30 |
4/29/2005 |
$35.95 |
+7.96% |
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Featured on a
high volume gap open breakout and followed with several days
strong advances before consolidating for a time then plunging to
just below the featured price followed by a gap open then the
price faded to below its 50 DMA once again. Now near all-time
highs. |
DJO - NYSE
D J
Orthopedics Inc
HEALTH SERVICES - Medical Appliances & Equipment
|
$28.94 |
($0.96) |
5/3/2005 |
$29.30 |
-1.23% |
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Recently fell
apart after making some gains on whipsaw action. Now sits near
all-time highs. |
DNA - NYSE
Genentech Inc
DRUGS - Biotechnology |
$84.21 |
$0.66 |
8/31/2005 |
$92.84 |
-9.30% |
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First featured
on 8/31/05 and then highlighted again in yellow as it built a
new base to buy from. Since, it has steadily declined to support
of the June/July lows where it has bounced and has been moving
higher. Has advanced since triggering a technical buy signal and
is at a new high. |
ELOS - NASDAQ
Syneron Medical Ltd
HEALTH SERVICES - Medical Appliances & Equipment
|
$36.48 |
$0.34 |
6/3/2005 |
$34.22 |
+6.60% |
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First featured
in a CANSLIM.net Stock Bulletin at $34.22 on 06/03/05 and
immediately triggered a technical buy signal before pulling back
to just below its 50 DMA. It then advanced steadily, yet now has
declined a bit.. |
ESRX - NASDAQ
Express Scripts Inc
HEALTH SERVICES - Specialized Health Services |
$62.20 |
$0.48 |
7/28/2005 |
$52.15 |
+19.27% |
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Featured on a
huge gap open and has steadily advanced since and now is at all
time highs. Makes for another great example. Holding on to gains
since huge gap open yesterday on volume. Pretty good group.
Highly ranked. |
FADV - NASDAQ
First Advantage Corp
DIVERSIFIED SERVICES - Business/Management Services
|
$29.40 |
$0.50 |
8/16/2005 |
$24.97 |
+17.74% |
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Featured as it
was breaking out of a nice base. Did successfully test the 50
DMA once yet did not drop much below that featured price.
Recently has been uptrending and now is at a new high. Did
successfully test the 50 DMA once yet did not drop much below
that featured price. Now sits just off new highs. |
FDG - NYSE
Fording Canadian Coal Tr
METALS & MINING - Industrial Metals & Minerals |
$42.57 |
($0.68) |
7/25/2005 |
$34.55 |
+23.21% |
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Featured on
07/25/05 yet did not trigger a technical buy signal until
8/17/05. It has advanced steadily since and is now at all-time
highs. Remains highly ranked and there is not much overhead
supply (resistance) in the way of new highs. |
HCSG - NASDAQ
Healthcare Services Group
DIVERSIFIED SERVICES - Business/Management Services
|
$19.25 |
$0.74 |
3/30/2005 |
$24.73 |
-22.16% |
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First featured
on 03/33/05 in the CANSLIM.net Mid-Day BreakOuts Report. 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
and made steady advances until recently when it started
downtrending to near its 200 DMA. Recently has been advancing. |
HLEX - NASDAQ
Health Extras
INSURANCE - Insurance Brokers |
$21.38 |
$0.04 |
6/23/2005 |
$18.91 |
+13.06% |
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Featured at
$18.91 on 06/23/05 as it was blasting out of its base. Has
advanced fairly well and is now consolidating above $20. |
INFY - NASDAQ
Infosys
COMPUTER SOFTWARE & SERVICES - Technical & System Software
|
$74.28 |
$0.80 |
2/16/2005 |
$73.15 |
+1.54% |
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First featured
as it was breaking out on massive volume from a decent base. It
steadily advanced to a high of $78.48 before pulling back and
dramatically selling off before advancing again. |
IVGN - NASDAQ
Invitrogen Corp
DRUGS - Biotechnology |
$75.23 |
($0.01) |
5/2/2005 |
$74.97 |
+0.35% |
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Has made
considerable gains since featured while remaining above its
upward trendline until recently when it broke below its 50 DMA.
Now is near it 200 DMA. |
JWN - NYSE
Nordstrom Inc
RETAIL - Apparel Stores |
$34.32 |
$0.52 |
7/28/2004 |
$27.51 |
+24.75% |
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Since first
featured in initially had a tough start. It was re-featured on
03/31/05 and again failed. Then on 5/17/05 it broke out and was
highlighted and it has made steady gains since and was perched
at all-time highs until a recent gap down as the group came
under pressure. Now sits under its 50 DMA. |
KBH - NYSE
K B
Home
MATERIALS & CONSTRUCTION - Heavy Construction |
$73.20 |
$1.10 |
11/9/2004 |
$43.50 |
+68.28% |
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First featured
on 11/09/04 initially made steady gains then consolidated and
built a new base near $60. Highlighted again as its CANSLIM.net
status was changed from green back to yellow in a CANSLIM.net
Mid-Day BreakOuts Report on 5/18/05 on the breakout. Had
advanced in an uptrend until recently when the group got hit
with selling.. |
KWK - NYSE
Quicksilver Resources
ENERGY - Independent Oil & Gas |
$47.79 |
$0.26 |
6/9/2005 |
$38.75 |
+23.33% |
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Above average
volume breakout prompted the featuring of this leader on
06/09/05. Made a steady run continuing to make new highs until
07/05/05 where it started its recent downtrend until recently it
started moving higher and now is at new highs. |
LKQX - NASDAQ
L K
Q Corp
WHOLESALE - Auto Parts Wholesale |
$30.20 |
($0.47) |
7/25/2005 |
$29.00 |
+4.14% |
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First featured
on 7/25 with a gap open then pulled back to its 50 DMA before
moving to new highs. Then it sliced through its 50 DMA and
traded just below the featured price but not more than 8%. Then
later dipped a little lower until recently where it gapped open
and now is above its 50 DMA and near all-time highs. |
LM - NYSE
Legg
Mason
FINANCIAL SERVICES - Investment Brokerage - Regional
|
$109.69 |
$1.76 |
6/2/2005 |
$87.50 |
+25.36% |
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Huge advance
on 06/24/05 after being featured. Recently has had some trouble
with a gap down on 7/26/05. Now consolidating near its 50 DMA.
Price is still above support of 50 DMA and it is holding on to
decent gains. |
LYTS - NASDAQ
L S
I Industries Inc
CONSUMER DURABLES - Business Equipment |
$19.00 |
$0.03 |
9/6/2005 |
$15.91 |
+19.42% |
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Featured as it
was breaking out of a nice base on huge volume and has been in a
steady uptrend since and now sits near all-time highs. |
MDC - NYSE
M D
C Holdings
MATERIALS & CONSTRUCTION - Residential Construction
|
$78.89 |
($0.10) |
1/13/2005 |
$68.89 |
+14.52% |
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First featured
on 1/13/05 and initially made some decent gains until trading
under its 50 DMA. Highlighted again on 7/7/05. Made a slight
gain then dipped under its 50 DMA like other homebuilders. |
MGM - NYSE
M G
M Mirage
MEDIA - Movie Production, Theaters |
$43.77 |
$0.47 |
6/3/2005 |
$39.35 |
+11.23% |
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First featured
in a CANSLIM.net Mid-Day BreakOuts Report. Made initial gains
then pulled back a bit before moving to new highs. Has been
trading sideways since. |
MINI - NASDAQ
Mobile Mini Inc
MANUFACTURING - Metal Fabrication |
$43.35 |
$0.09 |
9/1/2005 |
$44.55 |
-2.69% |
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Featured as it
was breaking to new highs on the biggest volume day ever. Has
been in a downtrend since, yet has remained above support. |
MTH - NYSE
Meritage Homes Corp
MATERIALS & CONSTRUCTION - Residential Construction
|
$76.66 |
$2.22 |
10/26/2004 |
$41.06 |
+86.70% |
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Featured on
10/26/2004 in a CANSLIM.net's Mid-Day Breakouts Report at
$41.06. Continued advancing steadily upward almost doubling.
Then consolidated before advancing some more. Recently got hit
with selling as the group came under pressure on news of home
sales slowdowns. |
NOV - NYSE
National Oilwell Varco
|
$65.80 |
($1.57) |
7/25/2005 |
$51.94 |
+26.68% |
C
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Featured on
7/25/05 and immediately made an advance making gains. Did pull
back a bit yet held well above the featured price. Then
consolidated before moving higher. Now is just off of all-time
highs. |
NVDA - NASDAQ
Nvidia Corp
ELECTRONICS - Semiconductor - Specialized |
$34.28 |
$0.30 |
8/12/2005 |
$29.41 |
+16.56% |
C
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A huge gap
open from a solid base made this issue worthy to feature.Since
then it did pull back a bit though held above support of the
base before advancing to near all-time highs. Did pull back a
bit though on light volume. Now is near all-time highs. |
NX - NYSE
Quanex Corp
METALS & MINING - Steel & Iron |
$66.22 |
$0.21 |
9/30/2005 |
$66.98 |
-1.13% |
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Just featured
in Friday's (09/30/05) CANSLIM.net's Mid-Day BreakOuts Report as
it was breaking above the pivot point on above average volume
triggering a technical buy signal. |
OIS - NYSE
Oil
States International
ENERGY - Oil & Gas Equipment & Services |
$36.31 |
$0.03 |
5/6/2005 |
$22.96 |
+58.14% |
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Initially
dipped after being featured yet found support at its 50 DMA
line. Then made a steady advance and now is near all time highs. |
PARL - NASDAQ
Parlux Fragrances Inc
CONSUMER NON-DURABLES - Personal Products |
$29.14 |
$0.72 |
6/13/2005 |
$28.18 |
+3.41% |
C
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Featured while
breaking out on 06/13/05. Has made a considerable gain since. |
PENN - NASDAQ
Penn National Gaming
LEISURE - Gaming Activities |
$31.11 |
($0.19) |
6/24/2004 |
$32.16 |
-3.26% |
C
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Gapped open
since first featured. Highlighted again on 6/28/2005 and
CANSLIM.net status was changed from Green back to Yellow as
stock had built a new base. Made some gains since yet recently
has broken its 200 DMA. |
PHM - NYSE
Pulte Homes Inc
MATERIALS & CONSTRUCTION - Residential Construction
|
$42.92 |
$0.37 |
2/1/2005 |
$33.50 |
+28.12% |
C
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Had a bit of
trouble at first but never broke below the featured price by 8%.
Then had a nice 2 day advance before pulling back a bit once
more since going on a steady climb to all-time highs. Recently
broke its 50 DMA with other home builders and has been trading
sideways since. |
POT - NYSE
Potash Corp
METALS & MINING - Nonmetallic Mineral Mining |
$93.32 |
($0.52) |
6/14/2005 |
$94.49 |
-1.24% |
C
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Since featured
on 06/14/05 had initially produced steady gains.then broke
support of its upward trendline and its 50 DMA which was the
first sign of trouble. It now sits above its 200 DMA. |
PRGS - NASDAQ
Progress Software Corp
COMPUTER SOFTWARE & SERVICES - Application Software
|
$31.77 |
($0.14) |
9/16/2005 |
$31.64 |
+0.41% |
C
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A couple of
days after it was first featured, it had a day where it ran up
several points on huge volume; yet closed with a much less
substantial gain. Since then, has been trading sideways and
another above average volume break above the pivot point would
trigger another technical buy signal. |
PTEN - NASDAQ
Patterson-Uti Energy Inc
ENERGY - Oil & Gas Drilling & Explorati |
$36.08 |
($0.21) |
5/10/2005 |
$26.73 |
+34.98% |
C
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Immediately
dipped below its 50 DMA and below and 8% stop loss. Never really
gave ideal buy back signal yet now sits at all-time highs. |
PTRY - NYSE
Pantry
RETAIL - Grocery Stores |
$37.37 |
$0.04 |
5/16/2005 |
$36.24 |
+3.12% |
C
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Featured on
5/16/2005 with a gap open to new highs in that day's
CANSLIM.net's Mid-Day Breakouts Report. Remained in uptrend
until recently where it broke its upward trendline and it 50 DMA
and declined to its 200 DMA. Now sits just under it 50 DMA and
near the featured price. |
PVH - NYSE
Phillips van-Heusen
CONSUMER NON-DURABLES - Textile - Apparel Clothing
|
$31.02 |
$0.50 |
5/26/2005 |
$31.27 |
-0.80% |
C
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Made steady
gains since featured then consolidated until recently when it
declined to near its 200 DMA. |
ROP - NYSE
Roper Industries Inc
MANUFACTURING - Diversified Machinery |
$39.29 |
$0.08 |
5/2/2005 |
$34.14 |
+15.08% |
C
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Immediately
gapped open after featured, then consolidated before making more
gains. Overall has been it a steady uptrend. |
SPN - NYSE
Superior Energy Svcs
ENERGY - Oil & Gas Equipment & Services |
$23.09 |
$0.05 |
7/25/2005 |
$20.46 |
+12.85% |
C
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Made some
initial gains after being featured, then tested its 50 DMA where
it found support and blasted up from there. Now is near new
highs and well above its upward trendline (connecting lows from
5/16). |
SQM - NYSE
Sociedad Quimica Y Minra
CHEMICALS - Synthetics |
$126.24 |
$0.73 |
6/2/2005 |
$90.00 |
+40.27% |
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Made a steady
advance since featured the test support of its 50 DMA yet
remains well above the featured price and since has been
consolidating near all time highs. |
STN - NYSE
Station Casinos
LEISURE - Resorts & Casinos |
$66.36 |
$1.01 |
10/26/2004 |
$60.85 |
+9.06% |
C
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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. Recently
got hit with selling that forced price below its 200 DMA. |
STR - NYSE
Questar Corp
UTILITIES - Gas Utilities |
$88.12 |
$0.24 |
5/31/2005 |
$62.80 |
+40.32% |
C
A N
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L
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G - A high
volume breakout on 5/31 prompted the featuring of this high
ranked leader in that day's CANSLIM.net Mid-Day BreakOuts
Report. Has advanced steadily since. Now sits near all-time
highs. |
SWN - NYSE
Southwestern Energy Co
ENERGY - Independent Oil & Gas |
$73.40 |
($0.95) |
6/16/2004 |
$32.59 |
+125.22% |
C
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Continued
making gains since first featured and is at all-time highs.
Another great example. |
TDY - NYSE
Teledyne Tech
DIVERSIFIED SERVICES - Technical Services |
$34.47 |
$0.03 |
6/14/2005 |
$33.83 |
+1.89% |
C
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First featured
on 6/14/05 on a breakout. It quickly tested support of its 50
DMA before gapping open on 7/28/05. Recently dropped below its
50 DMA and found support at its 200 DMA. Recently highlighted on
7/11/05 and gapped open. |
TS - NYSE
Tenaris Sa Adr
METALS & MINING - Steel & Iron |
$137.84 |
($0.71) |
2/2/2005 |
$51.90 |
+165.59% |
C
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First featured
in CANSLIM.net's Mid-Day Breakouts Report on 02/02/05 near $52.
Made minimal gains then dipped below its 50 DMA for a bit yet
held above the featured price. Since has gapped above and
steadily advanced and now is at all-time highs. |
UFPI - NASDAQ
Universal Forest Prods
MATERIALS & CONSTRUCTION - Lumber, Wood Production
|
$57.32 |
$0.32 |
11/22/2004 |
$39.12 |
+46.52% |
C
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First featured
on 11/22/04. Made minimal gains; then traded sideway for many
months until a strong advance started with a big volume
breakout. Now sits near all-time highs. |
UNT - NYSE
Unit
Corp
ENERGY - Oil & Gas Drilling & Explorati |
$55.28 |
($0.62) |
9/28/2005 |
$53.72 |
+2.90% |
C
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Just featured
in a CANSLIM.net Mid-Day BreakOuts Report on 9/28 on a big
volume breakout. |
UPFC - NASDAQ
United Panam
REAL ESTATE - Mortgage Investment |
$24.97 |
$0.02 |
5/31/2005 |
$23.90 |
+4.48% |
C
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Featured while
just starting to break out of a sound base. Immediately broke
out and charged higher in a steady uptrend then found support
near it 50 DMA. Until recently when it started to decline to it
200 DMA and is near the original feature price. |
UPL - AMEX
Ultra Petroleum Corp
ENERGY - Independent Oil & Gas |
$56.88 |
$0.57 |
6/16/2004 |
$17.45 |
+225.96% |
C
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L
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Had a hard
time making headway since first featured yet recently has
advanced in a steady uptrend and now is at all time highs. |
URBN - NASDAQ
Urban Outfitters Inc
RETAIL - Apparel Stores |
$29.40 |
$0.67 |
3/7/2005 |
$47.89 |
-38.61% |
C
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Dipped since
featured then moved higher. Now sits near all-time highs. |
USG - NYSE
U S
G Corp
MATERIALS & CONSTRUCTION - General Building Materials
|
$68.72 |
$2.31 |
8/4/2005 |
$51.27 |
+34.04% |
C
A N
S
L
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Had made a
steady advance since featured until recently when it pulled back
to support well above the featured price. Just blasted and
closed at a new high on Friday. Has made a steady advance since
featured. A great example. |
USNA - NASDAQ
U S
A N A Health Science
DRUGS - Drug Related Products |
$47.70 |
($1.68) |
8/31/2005 |
$51.59 |
-7.54% |
C
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L
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Featured on
8/31/05 as it was breaking out of a cup with handle like
pattern. Never triggered a technical buy signal since featured,
so should have never been purchased under the guidelines.
CANSLIM.net daily coverage was suspended on 9/21/05. |
VLO - NYSE
Valero Energy Corp
ENERGY - Oil & Gas Refining & Marketing |
$113.06 |
($1.93) |
7/26/2005 |
$82.71 |
+36.69% |
C
A N
S
L
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StockTalk,
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Featured in a
CANSLIM.net Mid-Day BreakOuts Report on 07/26/05 with a cup with
handle like pattern. Initially made a decent advance then pulled
back to support of recent base before making a solid advance and
now is consolidating near all-time highs. L in very good group.
Highly ranked. Needs to break above the pivot on above average
(+50%) in order to trigger a technical buy signal. |
VMSI - NASDAQ
Ventana Medical Systems
HEALTH SERVICES - Medical Instruments & Supplies
|
$38.07 |
$0.00 |
12/21/2004 |
$62.91 |
-39.48% |
C
A N
S
L
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Featured in
CANSLIM.net's Mid-Day Breakouts Report on 12/21/05 at $31.45
(2/1 split adjusted) and has rallied and made steady gains
since. Then slipped under it 50 DMA yet had bounced off of its
200 DMA and is moved higher to near $45. Traded near its 50 DMA
for sometime until recently when it broke below its 200 DMA. |
XTO - NYSE
X T
O Energy Inc
ENERGY - Independent Oil & Gas |
$45.32 |
($0.55) |
2/9/2005 |
$28.80 |
+57.36% |
C
A N
S
L
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Got into a
solid uptrend just after being featured then pulled back but not
more then 7% below the featured price. Just recently
re-highlighted (from green back to yellow) as it was breaking
out of a buyable base. Has made solid advances since and is now
at all-time highs. |
XXIA - Ixia
ELECTRONICS - Semiconductor Equipment & Mate
NASDAQ |
$0.00 |
$0.00 |
6/2/2005 |
$19.99 |
N/A |
C
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L
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Minimal gains
since featured and then broke support of its 200 DMA. On
9/20/2005 CANSLIM.net daily coverage was suspended. |
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 |
|
|
|
Trading
Breakouts and Pullbacks in Today’s Environment
Richard W. Miller, Ph.D. Founder
www.TripleScreenMethod.com
Last month, I
raised the point that sector rotation cycles have hurt the performance
of “buy & hold” strategies. Even quality stocks find themselves in
sectors that have rotated from favor. Housing is an example. Most
housing stocks have fallen to the support of their 200-day moving
averages, some even below that historic pillar of support. I also
presented data and discussed the outcome of recent modeling studies
aimed at defining the best approach to trading pullback patterns of
fundamentally sound stocks. This month, I extend that approach and
contrast the profit/risk characteristics of trading pullback versus
breakout patterns.
One
can classify trading into two broad categories whether one focuses
intraday or trades over several days or weeks: (1) trading strategies or
patterns regardless of the quality of the underlying stock or (2)
trading those same strategies or patterns with fundamentally sound
stocks. The second, of course, is a subset of the first, but I prefer
it, which I’ll call techo-fundamental trading, to trading historically
proven patterns (like break outs or pullbacks) regardless of where
they’re found. Why? Longer-term holders, like institutions, sit ready to
buy stocks with quality fundamentals, as their market cap grows,
especially at breakouts and pullbacks. As a consequence, one might
expect different responses to common trading patterns for these two
broad classifications, e.g., more support at major moving averages like
the 50- and 200-day, a greater tendency to accumulate during periods of
consolidation, etc.
Most common trading
approaches boil down to either buying (or shorting) stocks in pullback
(or recovery) or buying (or shorting) those same stocks in breakout from
longer-term consolidation patterns, like “cup & handles.” The first
approach offers well-defined, tighter risk management; the second the
added benefit of limited overhead resistance. For this work, I’m
concerned solely about trading long, fundamentally sound stocks. Here, I
share results of TradeStation modeling intended to further refine
risk/profit characteristics of two common trading patterns: going long
after a 5-day minimum is reversed or after a 21 (1 month of trading
days) breakout occurs.
Twenty
fundamentally sound stocks (2 each from 10 major sectors, see September
CANSLIM.net News for stock list) were back tested over 4.2 years between
7/30/01 and 9/29/05 (1,522 days each for a total of 30,440 days), then
again over the most recent 268 days between 1/04/05 and 9/29/05. These
periods encompassed extremes in the market where the S&P ranged between
max gains of +7.8% and +3.5%, respectively, for the two periods and max
losses of -45.9% and -10.7%. Over the first period the S&P remains down
13.5%; over the second up 3.3%.
The performance of
these 20 were evaluated in pullback and breakout, which were both
defined by several factors (see chart for added clarification): (1)
first half position profit target taken after a 5% gain; (2) second half
profit taken utilizing a 3-day trailing stop; (3) any loss constrained
to 7.5% (gaps can extend loss); (4) pullback depth, defined by the high
4 days ago and today's low, must be greater than 5%. Three additional
conditions ensured trading stocks only in bullish trends: (1) 20-day
moving average must be greater than 50-day moving average; (2) today's
price must be greater than its 200-day moving average; and (3) today's
50-day moving average must be greater than it was 10 days ago.
Each trade was
entered at the point it reversed its pullback or broke above its 21-day
high and exceeded the high of the preceding day by $0.05; the initial
stop was $0.05 under the new pullback low or the low of the day
preceding the breakout ; and all trades, if not stopped out earlier,
were sold at the close of the 20th-day (time stop). Finally, each trade
was initiated with $10,000 and traded in half position increments. Three
trades could be undertaken simultaneously with a $30,000 account. The
chart shows a trade schematic.
Trades are entered
under profit (1P) and loss (1L, 1FS) criteria. If 1P is met, the second
half trade is exited with a 3-day trailing stop at profit (2P) or even
at the original buy point (2E). On the other hand, if the technical stop
is hit first, half the position is exited at loss (1L) and the second
half is exited with a 3-day trailing stop at either a profit or loss (3
P/L). Under any of these conditions, the total position (or the half
that’s left) is sold at the 20-day time stop (1 Tm) or the 7.5% final
loss point (1FS). Trade results are summarized in the table.
Trade Type
|
Total
Profit ($) |
# Profit
1/2 Trades |
# Loss
1/2 Trades |
Avg
Trade Length (days) |
Avg Max
Draw Down ($) |
%
Winners |
% 2 P |
% 2 E |
% 3 P/L |
% Tm |
% FS |
|
1522 Days
between 7/30/01 and 9/29/05 |
|
|
Breakout |
63,935 |
549 |
411 |
7.00 |
1,821 |
57.25 |
37.02 |
12.28 |
23.01 |
7.27 |
20.42 |
|
Pull
Back |
67,515 |
505 |
325 |
6.90 |
1,782 |
60.84 |
36.00 |
13.26 |
22.74 |
6.53 |
21.47 |
|
268 Days
between 1/04/05 and 9/29/05 |
|
|
Breakout |
18,281 |
139 |
93 |
8.24 |
850 |
60.17 |
* |
* |
* |
* |
* |
|
Pull
Back |
11,472 |
105 |
79 |
6.85 |
641 |
57.07 |
* |
* |
* |
* |
* |
Both trading approaches were highly profitable for this fundamentally
sound group of 20 stocks. The pullback approach offered slightly greater
profit with fewer trades (a higher winning percentage). Note, the number
of trades, each entered with $10,000, is broken into half trades, i.e.,
there were 480 full breakout trades over the last 4.2 years. These
trades occupied 3,360 trading days (480 x 7.00 days average trade
length), so on average, two trades overlapped at any time, and a $30,000
account would have allowed entry into most of them. The breakout trading
scheme thus returned 213% over this period, a period where the S&P
remains down 13.5%. So far this year, breakout trading has been
significantly more profitable.
The Above Article
Was Prepared by
Dr. Richard Miller, Founder of...
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SPECIAL |
ARTICLE |
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Capital Preservation
-
Prepared by Frank E.
Testa
Name a profession where you can “fail” 70%
of the time and be considered a success and earn substantial money. If
you guessed a professional baseball player, you are correct, as a batter
is considered a success if they are able to get three hits every 10
at-bats. Likewise, an investor can be successful if they manage to limit
their losses on losing stock selections to 8%, while letting their
profits run on the winners. To demonstrate this vitally important
investment concept, please refer to the examples below.
Example 1: Investor limits losses to 8%
|
Example
1: |
|
|
|
|
Investment |
Investment Return |
Gain/Loss |
Cumulative Funds |
|
|
|
|
$1,000.00
|
|
1
|
-8%
|
($80.00)
|
$920.00
|
|
2
|
-8%
|
($73.60)
|
$846.40
|
|
3
|
-8%
|
($67.71)
|
$778.69
|
|
4
|
-8%
|
($62.30)
|
$716.39
|
|
5
|
-8%
|
($57.31)
|
$659.08
|
|
6
|
-8%
|
($52.73)
|
$606.36
|
|
7
|
-8%
|
($48.51)
|
$557.85
|
|
8
|
25%
|
$139.46
|
$697.31
|
|
9
|
25%
|
$174.33
|
$871.64
|
|
10
|
25%
|
$217.91
|
$1,089.54
|
|
|
|
|
|
|
Return
on Investment
|
8.95%
|
|
$89.54
|
|
Winners
|
3
|
|
|
|
Losers
|
7
|
|
|
|
%
Winners
|
30.00%
|
|
|
In the above example, an investor suffered
seven losses of 8%, while locking in profits of 25% on three stock
selections. Despite picking a losing investment 70% of the time, the
investor’s account would have earned a return on investment of $89.54,
or 8.95%. Incidentally, any combination of seven 8% losses and three 25%
gains would return the same.
Now let’s see how an investor would fare if
they did not limit their losses to 8%, but rather sustained seven 10%
losses.
Example 2: Investor limits losses to
10%
|
Example
2:
|
|
|
|
|
Investment
|
Investment Return
|
Gain/Loss
|
Cumulative Funds
|
|
|
|
|
$1,000.00
|
|
1
|
-10%
|
($100.00)
|
$900.00
|
|
2
|
-10%
|
($90.00)
|
$810.00
|
|
3
|
-10%
|
($81.00)
|
$729.00
|
|
4
|
-10%
|
($72.90)
|
$656.10
|
|
5
|
-10%
|
($65.61)
|
$590.49
|
|
6
|
-10%
|
($59.05)
|
$531.44
|
|
7
|
-10%
|
($53.14)
|
$478.30
|
|
8
|
25%
|
$119.57
|
$597.87
|
|
9
|
25%
|
$149.47
|
$747.34
|
|
10
|
25%
|
$186.83
|
$934.17
|
|
|
|
|
|
|
Return
on Investment
|
-6.58%
|
|
($65.83)
|
|
Winners
|
3
|
|
|
|
Losers
|
7
|
|
|
|
%
Winners
|
30.00%
|
|
|
In Example 2, the investor begins with the
same $1,000 portfolio and subsequently experiences seven losses of 10%
before locking in profits on three investments of 25%. While the
investor’s “batting average” remains at .300, the relaxing of the sell
discipline to 10% losses resulted in a net decline of $65.83, or 6.58%.
Now let’s look at Example 3 whereby an investor allows losses to grow to
12% and view the dramatic impact it will have on the portfolio.
|
Example
3:
|
|
|
|
|
Investment
|
Investment Return
|
Gain/Loss
|
Cumulative Funds
|
|
|
|
|
$1,000.00
|
|
1
|
-12%
|
($120.00)
|
$880.00
|
|
2
|
-12%
|
($105.60)
|
$774.40
|
|
3
|
-12%
|
($92.93)
|
$681.47
|
|
4
|
-12%
|
($81.78)
|
$599.70
|
|
5
|
-12%
|
($71.96)
|
$527.73
|
|
6
|
-12%
|
($63.33)
|
$464.40
|
|
7
|
-12%
|
($55.73)
|
$408.68
|
|
8
|
25%
|
$102.17
|
$510.84
|
|
9
|
25%
|
$127.71
|
$638.56
|
|
10
|
25%
|
$159.64
|
$798.19
|
|
|
|
|
|
|
Return
on Investment
|
-20.18%
|
|
($201.81)
|
|
Winners
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3
|
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Losers
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7
|
|
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%
Winners
|
30.00%
|
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This person’s portfolio suffered considerable damage. Even three
“winning” investments of 25% each can not erase the losses incurred, as
the portfolio’s value fell by $201.81, or 20.18%.
Conclusion:
As the examples above clearly illustrate, there is no trading rule more
important than cutting your losses short. The pros say that selling
stocks for a loss is one of the hardest decisions any investor has to
make. When you take a loss, you are admitting defeat. It goes against
the internal optimist in everyone. Famed investor Peter Lynch once
remarked, “It’s like watering your weeds and cutting your flowers.”
Investors are prone to sell their winning stocks for small profits, but
hold on to the losers, hoping for a miracle.
Paring losses at 8% not only relieves you of
a losing investment, but preserves your capital to reap the rewards of
your winners. For instance, notice in Example 3 above, the investor who
suffered seven consecutive losses of 12% had only $408.68 to invest in
three stocks that became winners, resulting in an increase of $389.51 to
the portfolio. Whereas, the investor limiting losses to 8% would have
$557.85 to invest in three stocks. Consequently, the investor would have
more funds available to take advantage of the three 25% winners,
resulting in an increase of $531.69 to the portfolio.
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MARKET |
SENSE
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Beyond CAN SLIM™
-
Helpful concepts that can narrow your search for great CAN SLIM™
oriented stocks.
The following
article relates to concepts and tips that are communicated within
the pages of the book “How To Make Money In Stocks” third
edition, by William J. O’Neil, founder of the Investor’s Business
Daily newspaper. This information goes beyond the brief summaries
you will usually find published on the system of stock selection
called CAN SLIM™. It features extra suggestions that will
enhance your stock selection process based on a variety of items
within the book that I have personally found to be very important. I
will present my information in bullet format and offer you the page
number as to where you may find the quoted information for further
review.
Before we start, I
suggest that you get a highlighter pen and have the third edition of
“How To Make Money In Stocks” handy. If you don’t have the
latest edition, go to a bookstore or purchase it today at
www.canslim.net.
-
C
Pages 10-13: When comparing current quarterly earnings
you should avoid the trap of being influenced by non-recurring
profits. One-time extraordinary gains are deceiving. Insist on
escalating and significant earnings increases quarter after
quarter, at least on both of the last two quarterly reports. Do
not forget that sales revenue growth is imperative due to the
fact that it is the fuel that creates profits. Also, check on
the earnings the company will come up against for the next one
or two quarterly comparisons. If the year ago results look like
easy numbers to beat, then there is a good possibility that the
stock will escalate. However, two quarters of major
deceleration spells trouble. The book offers the following
example: “If a company growing at a 50% rate suddenly reports
earnings gains of only 15%, that usually spells trouble and you
probably want to avoid it.” Another important concept to
remember when selecting a stock is that you obtain additional
validation by checking the earnings of other stocks within the
same industry group. If most or all others are coming up with
strong earnings then you are on the right track. Page 171:
The newspaper offers a rating called the SMR Rating which is on
an A to E scale, “A” being the best. “Cutting costs may boost a
company’s earnings for a quarter or two, but powerful, sustained
profit increases require healthy sales growth. It is also
important to buy companies that make the most of their sales
growth. How much profit do they generate from each dollar of
sales? How well do they use their capital? The Sales + Profit
Margins + Return On Equity (SMR™) Rating
combines these important factors and is the fastest way to
identify truly outstanding companies with real sales growth and
profitability.”
-
A
Page 17: Make sure ROE (Return On Equity) is at least 17%.
“Our studies show that the greatest winning stocks of the past 50
years had had ROE’s of at least 17%”. A factor that is important for
screening growth stocks is the stability and consistency of its
annual earnings growth for the past 3 years. A scale of 1-99 is used
at DailyGraphs® under Earnings Stability. And the lower the figure,
the more stable the past earnings record is. “Growth stocks with
steady earnings tend to show a stability figure below 20 or 25.
Companies with earnings stability over 30 are more cyclical and a
little less dependable in terms of their growth.” Page 19: “A
standout stock needs a sound growth record during recent years, but
also a strong current earnings record in the last few quarters. It
is the powerful combination of these two critical factors, rather
than one or the other, which creates a SUPER STOCK, or at
least one that has a higher chance for true success.” P/E ratios
(the price to earnings ratio), which measures if a stock is
undervalued or not, should not be the reason for purchasing stocks.
Page 22: “The reality is that the lowest P/E usually belongs
to the company with the most ghastly earnings record, and that’s
precisely why it sells at the lowest P/E.” And vice versa.
Sample: America Online sold for over 100 times earnings in
November of 1994 before increasing 14,900% from 1994 to its top in
December 1999.
-
N
Page 28: “Just because a stock is making a new price high
does not necessarily mean it’s the right time to buy. You should
look for stocks making new price highs as they break out of price
consolidation areas (or bases).” Take note that big volume behind
this move is very important! Page 128: Market legend Jesse
Livermore named the line of “least resistance” or “pivot point” when
a stock comes out of a chart pattern and charges through an upside
buy point. Page 105: Buying right solves most of your
problems. “If you buy exactly at the right time of a proper daily or
weekly chart base in the first place, and you do not chase or
pyramid a stock when it is extended in price more than 5% past a
correct pivot buy point, you will be in position to sit through most
normal corrections. Winning stocks very rarely ever drop 8% below a
correct pivot buy point.” Page 103: “As a result of my
analysis, I discovered that successful stocks, after breaking out
(see chapter 12), tend to move up 20% to 25%. Then they decline,
build new bases, and in some cases, resume their advances.” Also on
this page comes the loss cutting rule, “If stocks sell below their
purchase price by 8%, they’d be sold and the loss taken.” With this
said, I believe it could be wise to sell at least half of your
position and make your profit, especially if you’re worried about
profits slipping away. The main purpose of investing is to make a
profit, not to wait until it disappears due to greediness.
-
S
Page 33:
The total number of shares outstanding in a company’s capital
structure represents the potential amount of stock available. But
market professionals also look at the “floating supply,” the shares
left for possible purchase after subtracting stock that is closely
held. Companies in which top management owns a large percentage of
the stock (at least 2% to 3% in a large company, and often much more
in small companies) generally are your better prospects because the
company managers have a vested interest in the stock. Page 34:
In regard to small and large companies, and the new products they
introduce into the marketplace, the following is also very important
to keep in mind: A hot new product for a smaller company will have
more significance than a similar new product from a large company.
“…if a mammoth older company creates an important new product, it
may not materially help its stock because the product will probably
account for only a small percentage of a company’s total sales and
earnings. The product is simply a small drop in a bucket that’s just
too big.” Page 34: “A stock will often top in price around
the second or third time it splits. Our study of the biggest market
winners found only 18% of them had splits in the year preceding
their great price advances.” So, keep in mind that stock splits
create larger supply and may place a company in the big-cap status.
Page 35: Look for companies buying their own stock in the
open market. Fitting all of the CAN SLIM™ criteria and also having
consistent stock buybacks can make for a great buy candidate. “A 10%
buyback is considered big. This reduces the number of shares in the
marketplace and usually implies the company expects improved sales
and earnings in the future.” Page 35: “Usually, the lower the
debt ratio, the safer and better the company. Earnings per share of
companies with high debt-to–equity ratios could be clobbered in
difficult times.” Keep in mind that convertible bonds in the
capital structure could dilute earnings if these bonds are converted
into shares of common stock. “A low corporate debt-to-equity ratio
is generally better.”
-
L
Pages 40-41:
Avoid stocks that
have just suffered unusually large price drops, and look for
abnormal strength with large volume (price increases) in a weak
market. Remember that stocks that go up tend to go higher and stocks
that go down tend to go lower.
-
I
Page 43:
“Diligent
investors go yet another level deeper. They want to know not only
how many institutional sponsors a stock has and if that number has
increased in recent quarters, but they also want to know who those
sponsors are. They look for stocks held by at least one or two of
the more savvy portfolio managers who have the best performance
records. This is referred to as analyzing the quality of
sponsorship.” Page 44: Check out the Sponsorship Rating found
in the newspaper’s stock tables ranging from A (best) to E (worst).
“Stocks with an “A” rating indicate increased buying by the better
money managers in the market.” Also, “A significant, new
institutional investment position taken in the most recently
reported period is generally more relevant than existing positions
held for some time. This is because when a fund established a new
position, chances are that it will continue to add to that position
and may be less likely to sell it in the near future.” Remember that
institutional buying and selling accounts for more than 70% of the
activity in most leading companies. Page 45: Warns investors
to stay clear from “overowned” or “excessive sponsorship” in stocks
because it can translate to excessive selling in that particular
stock when it eventually declines.
-
M
Page 50:
“Bear markets usually end while business is still in a downtrend.
The reason is that stocks are anticipating, or “discounting”
economic events months in advance. Similarly, bull markets usually
top out and turn down before a recession sets in. For this reason,
use of economic indicators to tell you when to buy or sell stocks is
not recommended.” – Page 51: “For example, railroad
equipment, machinery, and other capital goods (which demand for
capital goods have never been strong in the early stages of a
recovery) industries are late movers in a business or stock
market cycle. This knowledge can help you get a fix on where you are
now. When these groups start running up, you know you’re near the
end. In early 2000, it was computer companies supplying Internet
capital goods and infrastructure that were the last-stage movers
along with telecommunications equipment suppliers.”
Chapter 12
is extremely important for all investors to read. Remember that all
of the main CAN SLIM™ criteria can be present, but if the “M” in CAN
SLIM™ (upward market direction) is not present, then all else won’t
matter due to the fact that most stocks follow the direction of the
market.
|
 I
am introducing my educational investment course for novice investors
- InvestorWiz
-
Ten easy chapters
that help you understand the markets, the economy, fundamental
and technical analysis, and types of brokerage accounts.
-
Simple language,
pictures, samples, homework, and answers page in each chapter.
-
Understand what
your financial advisor is doing for you!
-
Help yourself
to become financially independent through good investing.
Visit
www.Investorwiz.com
to learn more!
|
 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
InvestorWiz!
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.
|
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EDITOR'S
|
LETTER
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Expect the
Best, Prepare for the Worst
- James F. Taulman
|
September began on a somber note as the country entered
the aftermath of the most costly natural disaster in
history. Hurricane Katrina slammed three states
and literally drowned a major US city. Shortly
thereafter, Hurricane Rita pounded two states and
shuttered several major oil facilities in the region.
Even though the combined damage of these two storms
surpassed any other natural disaster in U.S. history,
our capital markets and economy continued moving
forward. Events like these help put our priorities in
perspective. Without hesitation, millions of dollars
were donated from people all around the world to help
the victims of these killer storms. Thousands of people
in neighboring states managed to put aside any
differences and opened their homes to the displaced
citizens of the Gulf. The numerous lessons that one can
learn from these situations can be applied to various
aspects of people’s lives.
One of these lessons is the
importance of planning for the worst. This holds
true for stocks as well. When the research staff at
CANSLIM.net features a new stock, it has the same
characteristics as the stocks illustrated in the book
"How to Make Money in Stocks" by William O'Neil, the
founder of the Investor's Business Daily®. Stocks
reviewed in that book have made gains many fold in
price. One stock rose as much as 8,958%.
So, one could expect the stocks that CANSLIM.net
features to have a strong possibility of producing great
gains. Many of the stocks featured have doubled or
tripled in price while some have gone up 10
fold. So, we expect the best for each stock that we
feature, yet we must also plan for the worst.
Planning for the worst is
simple. It's a matter of minding the 7
- 8% stop loss rule found on page
88 of "How to Make Money in Stocks".
When you sell your stock for an 8% loss
you are protecting your account so that you may
conserve your capital to invest successfully another
day. As we all know, disaster can strike in a moment,
and being prepared is paramount.
We hope that the fourth
quarter will be a new page for all of us. Our
thoughts and prayers are still with all affected by
these hurricanes. We wish them a speedy and healthy
recovery in all aspects of their lives.
What is Above Average
Volume?
Volume, a key indicator
of institutional activity, is one of the most
important tools prudent investors use when analyzing
stocks. We often write in our daily notes on newly
featured stocks "An above average volume break above
the pivot point would trigger a technical buy
signal." Some folks call in and ask what is "above
average" volume? According to the CANSLIM™ criteria,
whenever a stock breaks out (rises above its pivot
point), volume should by poised to be at least +50%
above average volume. If a stock on average trades
100,000 shares per day, then it
needs to trade 150,000 shares in
order to trigger a proper technical buy signal. So,
for instance, if it is 12:15PM (the exact middle of
the market day) and the stock has traded
85,000 shares for the morning, then one
could conclude that it is poised to close trading
190,000 shares for the day. Of
course, this is not guaranteed, but it gives you a
good guideline to work with intra-day.
The standard volume
measurement used in the CANSLIM™ methodology is the
50-Day Average Volume, which is the volume we use at
CANSLIM.net. Other sources may provide 30-day,
60-day or even 90-day moving averages.
CANSLIM.net strives to
offer its subscribers the tools necessary to
achieve their financial objectives. The accompanying
table can be used as a quick reference illustrating
the percent of daily average volume a stock should
have at any particular hour of the day in order to
be on pace to meet the minimum guideline. Realize
that the best breakouts to buy will usually blow
right by that minimum and trade up on +200-300% of
daily average volume or more. Keep in mind that
most stocks have a surge in volume in the beginning
of the trading day, so determining in the initial
minutes of trading whether or not a stock is
attracting heavy buying demand can be a rather
tricky proposition. This table should only be used
as a guide to volume percentage forecasting.
Intra-Day Trading
Percentages
Poised for 150% at Day
End
|
10:00 AM |
11.5% |
|
10:30 AM |
23.1% |
|
11:00 AM |
34.6% |
|
11:30 AM |
46.2% |
|
12:00 AM |
57.7% |
|
12:30 PM |
69.2% |
|
1:00 PM |
80.8% |
|
1:30 PM |
92.3% |
|
2:00 PM |
103.8% |
|
2:30 PM |
115.4% |
|
3:00 PM |
126.9% |
|
3:30 PM |
138.5% |
|
4:00 PM |
150.0% |
At the times indicated,
if a stock is trading above the corresponding
percentage shown, that stock is poised to exceed
150% of the DAV.
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If you know someone who might find this report or the features on our
website useful, please tell them about
http://www.canslim.net/. As CANSLIM.net's
subscriber base grows we are able to offer additional resources to help
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feedback that you may have. Please submit any questions, comments or
suggestions
here.
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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 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.
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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1996-2006 Gruneisen Growth Corp. d/b/a www.canslim.net All rights reserved.
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Canada and by international treaties.
The names “CANSLIM” and “CAN SLIM” are service marks and
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Gruneisen Growth Corp., a Florida corporation, under license. GGC is solely
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