It was a very bullish day, on Thursday, with many stocks showing up in my scans that are now attempting to hammer out right sides of bases, after a five month downtrend. There is good news and bad news involved with this. The good news is that there are signs that stocks are trying to firm up and head higher. These include some technology names like MCRS and SKIL. Some more flat and sideways action out of these two, for instance, would give us two great looking tech names to add to the list of stocks rising. This is bullish but the problems with these stocks is that there are a lot of charts out there, that even though they are working on a right side, are very wide and loose. Obviously just a couple of weeks of quiet trade would help but that is just a lot of hope. At least, we have things shaping up a bit more. Another problem, still, is that the past leaders from homebuilders in 2006 to technology in early February to mortgage/real estate loans in the summer, and now big-cap favored tech, gold, oil, and chemicals are all very ugly. Since they were the leaders of the 2003 to 2007 bull market and now that they are broken you can guarantee it is going to take a lot longer than five months to fix this market and send it to new highs. Chemicals and gold are just now breaking; there is no way this is bullish for the market, on the short term, considering the commodity bull was the last bastion of safety. The longs tonight are all very solid and, if you are a professional, there is no way you can go wrong on any of these. If you are a newbie, you STILL must be VERY cautious. There is NO WAY you should be going all-in here thinking the coast is clear. Maybe 20% of your account, at the most, should be in longs currently. If we can move higher in the next few days to weeks and more and more charts start showing up that look like NEU, BKE, LSR, XIDE, CHT, BRKR, MCF, SVT, MA, and VLNC, then I will look to get very bullish and will recommend we get very long. If you think you need to get the EXACT bottom to make a lot of money in the market, do me a favor, and actually take some time this weekend to freaking study your history. Sheesh, you don’t have to go far back (March 2003 to January 2004) to witness the last start of a bull market. A daily or weekly index chart of your favorite market should prove that you don’t need to bottom “guess” to make a TON of money in the market. Right now, trust me, only the very foolish and lucky COULD EVEN POSSIBLY make a ton of money in this market. Every professional I know, including myself, are moving nowhere. If you have returned over 10% during this downtrend (November 1, 2007-current), I would love to hear from you and hear your individual trades. If you are one of those lucky few, let me know in the comments. I would love to hear from ya.
new Featured long positions: LKQX FLO
LKQX is breaking out of an ascending base pattern, on very strong volume. This is actually three patterns in one: cup, cup with wedging handle, and ascending. At first I thought this was a wedging handle but after looking closely it is obvious that this is all part of the whole uptrend that the stock has been under the past year plus. Since July the stock has shaped up with a lot of strong accumulation and green BOP showing up early in the uptrend. As the uptrend went on the power behind it petered out. But in late February the stock gapped higher on very strong volume and steadily climbed higher on very solid accumulation and green BOP. After recently hitting a new high, the stock pulled back in very quiet volume the past three days and is now breaking out on very strong volume. The recent green and leading RS, moneystream, and TSV lines really help make this a nice chart. The fundamentals are incredible, with EPS and sales growing double to triple digits the past eight quarters. Estimates for 08 and 09 are still nutz at 38% and 26% respectively. Mutual fund ownership has gone from 98 to 108 to 161 to 186 the past four quarters. This stock is very sick (for the dork’s that don’t know, that is good) with the extremely strong chart and fundamentals. If this stock was bouncing right off the 50 DMA, I would have no problem putting 10% of my account in it (thos that know me know that is considered a HUGE!! position). Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.
FLO is bouncing off the 50 day moving average and nearing a breakout from a cup pattern, on very strong volume. This stock has been part of an uptrend since 2000 but more recently in August and November of 2007 the stock started to get more active on strong volume as it found support at the 200 DMA both times. After another bounce off the 200 DMA on strong volume and this time green BOP, the stock blasted off to new highs on very strong volume. It then created one more base with volume drying up a little bit (except a few days of accumulation) which was then followed by Friday’s near breakout on very strong volume with BOP going green again. The fundamentals are very impressive, with EPS growth between 6% and 45% the past eight quarters, sales growth between 7% and 11% the past eight quarters, and EPS estimates for 08 and 09 for YOY gains of 12% and 13% respectively. Mutual fund growth has gone from 108 to 119 to 130 to 132 the past four quarters, showing institutional money is gaining an interest in this leading stock/story. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.
new speculative Featured long position: PPO
PPO is breaking out of a short continuation pattern, on very strong volume. After a rough start, PPO has really righted itself out by starting a very nice uptrend in October when it gapped higher on very strong volume. As the rally went along, the stock popped right off the 50 DMA in February on strong volume. In March another very strong volume breakout occurred. This one took it to a new 52-week high and I flagged it for a purchase. But my dumb-ass decided to pass and I missed out on a quick 11% gain. But luckily for me, it is breaking out of another base. Sadly, this base is very small and that makes it much more dangerous as five days is the minimum you usually want to see; this base is four days long. However, the uptrend has been on very strong volume, green BOP, and pullbacks have been on low volume. That with today’s heavy volume pop that saw BOP go green again is a clear “let’s try this one out” signal. The fundamentals are HOT, with EPS growing 360% and 486% the past two quarters, sales growth has been between 9% and 23% the past seven quarters, and EPS estimates for 08 and 09 are for YOY gains of 126% and 19% respectively. Mutual fund ownership has gone from 10 to 28 to 30 funds the past three quarters, showing a growing interest in the company and its story. Cut your loss with a close below the 19.72 level, if the stock does not move higher immediately.
new speculative long positions: COKE CHT
COKE is bouncing off the 50 day moving average and breaking out to a new 2008 closing high, on extremely strong volume. COKE really hasn’t gone anywhere in the past year-and-five-months as it has been very volatile and range-bound. However, on 3/3 the stock had a very bullish reversal above the 50 and 200 DMA on very strong volume with BOP going green. The very next day COKE followed-through with that with a higher volume pop with BOP going max green. After that move, BOP stayed max green the entire time it made the most recent consolidation period. The breakout on Friday on very strong volume came with the stock hitting a new high for the year and with it closing at its HOD. That action, combined with the max green BOP recently, should be very bullish for this usually calm stock. The EPS growth was very strong but it is now going the wrong way and that combined with sales growth is very lame. Mutual fund ownership has even fallen in the most recent quarter from 41 to 39 funds. However, either a new mutual fund or one of the current ones loaded up on the stock this month because that sure is a lot of huge accumulation. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.
CHT is breaking out of a three-weeks-tight pattern, on very strong volume. This stock has been in a very strong uptrend since the bullish intraday reversal in August. The uptrend that started in August was moving along at a calm pace until the split in January. Once the 11 for 10 split (a VERY responsible split) went through, volume picked up significantly. The gigantic increase in volume is very noticeable on a long-term chart. The huge increase in volume has come with BOP going green which helps make this chart very nice after the very mundane start. The stock is not as great as it appears if you look at an arithmetic chart. There you can see how volatile and choppy it is compared to the pre-November action. The fundamentals are getting better with EPS growing 19%, 23%, 3%, and 9% the past four quarters, sales growing 8% and 3% the past two quarters, and a ROE of 11%. The very negative data point is that fund ownership has gone from 86 to 84 to 81 to 52 the past four quarters; this is NOT good and is a major red flag. Newbies should stay away from this one, until the EPS is at least 70 (currently 56). Cut your loss with a close below the 23.61 level, if the stock does not move higher immediately.
adding to existing Featured long position: BRKR
BRKR is putting in a very bullish reversal and is coiling for a breakout, on very strong volume. This chart wasn’t that nice until October when the stock started moving higher on a very large surge in volume and green BOP. That uptrend really took off at the start of December with a couple of very strong days that had the stock looking like it was going to be off to the moon. Sadly, the stock reversed lower but found support right on the 200 DMA. That low volume downtrend then became this very high volume uptrend from February to March. A handle was made on lower volume while BOP remained green to max green. That wonderful base has led to today’s breakout, on strong volume, with the RS line moving to a new high, confirms that this stock is ready to rock. The fundamentals are getting much better with EPS up 50% and 89% the past two quarters, sales up between 16% to 35% the past six quarters, along with mutual funds sponsorship growing from 65 to 73 to 81 the past three quarters. EPS estimates for 08 and 09 are for YOY gains of 87% and 26% respectively. Management also owns 39% of the stock, showing their confidence in their company. Cut your loss with a close below the 13.78 level, if the stock does not move higher immediately.
The March 20th issue of IBD favorably mentioned LKQX. http://www.investors.com/editorial/IBDArticles.asp?artsec=24&issue=20080320
Hi
On the weekly chart LKQX appears to be wedging upward. There has
been no shakeout to get rid of the weak longs.
I noticed this to. but you have THREE bases here. At first I saw it as a cup with wedging handle. But then after studying the volume I realized THIS is an ascending base. There is NO selling. ONLY massive accumulation. This is also JUST a cup base. If you do anything over a weekly chart it becomes a CLEAR cup and the wedge is gone.
The great thing about doing this for so long, I know how to play these so well. I am only buying 1% of my port and it wouldn’t even be that big but the fundamentals are excellent. However, it definitely isn’t the best and if you have problems with it I say DO NOT buy it. I believe since it is a mix between a cup with wedging base and an ascending base and has a TON of accumulation and green BOP that I would be FOOLISH to pass it up. Especially with the RS and moneystream line hitting new highs at a MUCH more rapid pace than price. The TSV line is also above the middle line and is showing some very bullish strength.
It isn’t perfect but a CANSLIM stock with this kind of a pretty chart being the first to breakout after a FTD is quite bullish and I think passing on it would be the wrong play. Since the start of March it is just too green.
LKQ’s fourth-quarter profit soared 78% to 16 cents a share from 9 cents a share in the same quarter a year earlier. Revenue more than doubled to $414.7 million from $204.6 million. Some of that growth was due to its acquisition in 2007 of 12 used auto parts firms, mostly smaller companies except for Keystone Automotive, which it acquired for $810 million.
Read that article posted by ackvil (Jim)
Joshua, Any idea why money is suddenly flowing into the commerical REITs? Strip mall owners with lousy fundamentals like DDR and FRT appear to have broken out and big-name financial office building REITs like BXP and VNO are hanging in there. Shouldn’t they also be having problems with their leveraged debt in light of the slowing conditions in retail and the financials?
Maui no ka oi, dude.
Andrew, you are a little late with this story.
Sadly, right now, you are the public. The charts knew about these problems WAY BEFORE YOU DID or the market did. Now the charts are rallying as the DUMB money goes short this sector. The stocks starting topping and breaking down in January and February of 2007.
Nice job, retail, once again, you are only A FULL YEAR LATE, LOL.
and anyways…..”any idea why”…..I NEVER CARE “why!”
why will NEVER EVER EVER make me money. the fact THAT IT IS will be the only way i can make money.
If you are currently an investor that is out there and you always want to know “why” something did this or that….you are MINIMUM two years away from making money consistently.
In fact, if you have been involved with the market for over five years, you still are not making consistent money, and you are STILL ASKING “why,” you probably need to find a new hobby.
The last thing you should ever ask is “why.” CANSLIM investors never ask why. We just do!!!! We listen and take action immediately. You can ask why later, if you want. But I personally DO NOT CARE AT ALL why a stock went up 3000% or why it fell 99%. I just need to know did it setup in a chart pattern that could have made me money.
MAUI NO KA OI!!! IS RIGHT. IF IT WASN’T FOR MY GIRLFRIEND, I WOULD NEVER LEAVE!!!! OR IF I LEAVED I WOULD MOVE TO KAUA’I
By the way, they could still rollover and COLLAPSE!!! But, you need to wait till they show signs of topping. Right now, I am still short 9% of my CLP from my short on 10/26/07 but these stocks all appeared to have bottomed.
I apologize for all the name calling (donkeys, jerks, aholes, jackoffs, etc..) but I am TIRED of people with SHITTY!!!! track records trying to get under my skin.
People tell me to buy C, IMA, BSC, HNSN, DRYS, TMA, and GS, I tell them to sell or short them, they ALL!!!! move lower, and NOT ONE SINGLE person says they are sorry or emails to tell me that I am right. Yet, then, immediately, I get one from some jack-off saying that I should be bullish because “this is the bottom and I must know deep in my gut that I want to be long.” Why don’t people go to my website and first look at my past big winners before opening there mouths?
Thank God I love this so much that I can look past this but I am getting sick of these jerks. If these schmucks were with me from the start in 1998, they would be hanging on EVERY word.
If you do NOT believe me that there are three chart patterns here, how come IBD didn’t define LKQX?:
LKQ Corp. (LKQX) rose 1.22 to 23.32, clearing its 23.12 buy point in heavy volume. The auto parts maker recently posted strong Q4 profit and sales growth. But its 2007 ROE and profit margins are a bit light.
……all they say is buy point. They see exactly what I am seeing.
This is what they said about it back on 3/11 in ‘base reader:
LKQX may be working on a handle of a 27%-deep cup base.
…..it sure did. and it wedged up. but on huge accumulation not quiet volume. thus I am calling it an ascending base.
If it fails anyway it isn’t going to hurt that much. the 50 DMA should be where your FINAL cut loss is. You should be out some if it is down anywhere from 5-10% before it closes below the 50 DMA.
Aloha.
Hey Joshua,
I’ve only very recently (last week or so) become interested in trading stocks, but have launched myself into it with a passion. Your commentary is helpful and fascinating.
My question is basically to make sure that I understand all of this at a fundamental level.
On my ETF watchlist a few of my choices are:
UYG, DON and DLN.
These basically fit in with your filtering methods, correct?
I plan on researching for a long while before throwing myself into the market, but am curious as to what you think of these picks.
Thanks
-Sean
Just to let you know my website is going to go way OVER your head so be ready for this. You better read all of my books on my website at .net before trading too much.
WOW! I dont know what to say. You have not read my site. How you would think I would buy any of those blows my mind. You are so far away it isn’t funny.
Do those look ANYTHING like my new longs?
I never buy a stock where the 50 DMA is not above the 200 DMA and the price is not above the 50 DMA.
If the stock does not have the price above the 50 dma, the 50 dma above the 200 dma, there is NO way I am interested in it.
How you can see all of my past big winners and see my current longs and think I would go long these is SHOCKING!
Also I am CANSLIM, why in the heck would I go long an ETF? LOL.
Have you ever seen me go long an ETF? NEVER in 12 years.
Have you EVER seen an ETF be a HUGE WINNER? Never has been and never will be.
I am looking for 80,000% returns. Not 8%.
I am glad I just saw you are going to research before buying. I am very happy to see that but you are WAY OFF. There is nothing even close in ANY of your longs that would have me interested: they are ETF’s NOT STOCKS and they have horrible chart patterns.
Could they be bottoming? Yes. But I don’t play that sucker and loser and amateur and donkey and dumb-money game.
If your STOCK (not ETF or mutual fund) is NOT hitting a new high or within 10% of a new high I have NO!!!! interest.
I hope this helps and if you go to my .net site and go to my strategy area you will know where I am at with my style. I do CANSLIM with 90% of my trades because it is the best.
AAII independent study since 1998 shows a 1,354% return of CANSLIM to a 53% return for the SP 500. Why would you not do EXACTLY what this methodology told you to do.
http://www.bigwavetrading.net/category/joshua-hayes/strategy/
Thank you, sir. I will look into this.
Like I said I appreciate your site and the work you put into it.
OK, Back after some research.
Are FCN,CRM and LSR closer to fitting your standards? FCN looks especially good under the light of canslim.
Thanks
I was long FCN and got rid of it too early! Just like I just did with DAR!! This has been ONE ROUGH MARKET! FCN is hot. I need a low vol. p/b to the 50 dma and then a heavy vol. bounce off of it with BOP still green.
CRM: yeah no doubt. Next move on strong volume WITH BOP going green and I will be going long. A red or yellow BOP and I will pass. Or low volume.
LSR: DO A SEARCH! You can look this up. Next time please check first! Thank you. I am long this stock since 1/10, 1/14, 1/24, 1/25, and 2/1. So not sure how you missed that one.
I am up between 22% and 30% on all purchases with no profits taken. This is one of my favorites and if it was more liquid I would have loaded up. Even then for such a tiny stock it still makes up 2% of my accounts (BRKR is 6.5% and my largest position; it would be 10% but the base isn’t long enough and the BOP isn’t max green).
Great thanks. I guess I’m getting the hang of it.
I’d do a search, but I honestly can’t find a search function on your page.
I’ve only got silver package, so I can’t read the forums.
Which reminds me: are you giving out different (better?) longs for gold and platinum, or are you just paying for the extra features and commentary? Thanks,
Sean
The search is CLEARLY on the right hand side below the orange box. It is SO EASY to use. I just did a search and returned EVERY SINGLE ONE of my LSR entries.
I CLEARLY tell you what you pay for on the homepage!
UGH!….the forums have a TON of shit in there INCLUDING EVERY SINGLE ONE OF MY SELLS! Different, better longs???? Are you kidding me? Wow.
Come on man. Why in the hell would I do that. And how would I think that those would DEFINITELY go up? Why wouldn’t I have kept BRKR secret????? Oh man. Dude, you need to just stop and watch from here on out.
the plat is chatroom….JUST LIKE IT SAYS IT IS. THESE THINGS HAVE BEEN THE SAME WAY SINCE 1997.
Rev charges $500 and my mentor WHO I GAVE STOCKS TO charged $1,000 a month (when i was there it was $200-$300 a month).
IT IS A CHAT ROOM!!! Where I talk a lot. It is BEING IN MY TRADING ROOM!!!!! Live 24/7 with me talking stocks, sports, politics, life, and how much I can not believe newbies don’t do DD or read.
You clearly see what you get on forums and Platinum just from reading the home page and then using common sense combined. And the search function IS RIGHT THERE ON THE RIGHT.
Dude, just a little bit of time and you can save me 30 minutes a day that I waste answering all of these questions.
And where is my crew member who said he was going to make sure I didn’t have to answer these MUNDANE already answered questions.
Great luck but bro
Just so you know, I used to pay, along with 100 other people, $200 for someone who didn’t even tell you when he sold. I GIVE YOU EVERYTHING for only $125. A BARGAIN, with my returns. If you can’t trade, however, it doesn’t help which is why I keep saying I am not for newbies. I am for those ready to take the next step.
ALOHA and great luck!!!! Let’s do some searching on our own!!!