There are only two stocks that are good to go long if you are an inexperienced active-investor and those are, of course, the two Featured long candidates. However, we, ONCE AGAIN, do not have perfect chart setups and every long listed has a problem. First, CLR was once a long for us back in March. It started to work and then, so RUDELY, reversed and closed below the 50 DMA before re-reversing and blasting off onwards to a huge powerful short rally that has welcomed those that could hold this wild dog with a 55% gain. But, for me, I will try to get long this possible “monster stock” and will see if I can not come away with some gains. Newbies and experienced investors alike should make sure you are not loading up on this buy. ORB would be a great long if it had only one other requirement: volume! Where is it? Do you notice on that powerful breakout volume is low? That is your clue to keep it very small. Look at the last tiny long I took where that happened. ERES did not turn out so well. SNT is too speculative for most. I love that chart pattern, and despite the poor fundamentals, will still probably drop at least a $1k in it. Remember, I am an active investor. If the chart says “buy me,” I buy it. If it says stay way I stay away. For newbies you should make sure everything is perfect. For me, I know when to go big and when to stay small (now is the time to stay small). AREX is in the same situation except it is way less risky and earnings estimates for 2008 and 2009 are very bullish with over a 100% gain expected this year alone for EPS YOY growth. These are all nice charts but nothing is a “must buy.” These are all mediocre. Take it for what it is. If I was a complete newbie and looking for only perfect charts, NONE of these would be longs. Aloha and I will see you in the chat room on Monday!
new Featured long positions: CLR ORB
CLR is breaking out of a two-week tight (not quite two weeks) pattern, on very strong volume. This stock has been excellent since late February when it bounced off the 50 DMA and broke out of an ascending base pattern. After a nasty shakeout below the 50 DMA, in mid-March, the stock has blasted off into an incredible run on very strong to super strong accumulation and with BOP going max green. The flat base is VERY TIGHT but the volume was loud (above average) in the base and that is a problem for any breakout. Plus the base is too short and BOP couldn’t stay max green the entire way in the base. This along with the stock being so far away from the 50 DMA makes it a risky long for almost everyone. However, a small poke could not hurt as the stock is under some huge accumulation. Hopefully it can keep it up. If not, cut your final loss with a close below the 38.61 level, if the stock does not move higher immediately.
ORB is breaking out of a well-formed saucer with high handle pattern, on below average volume. It is kind of surprising to see this powerful breakout from such a TIGHT handle come on no volume. But that is what happened. The stock started to gain some steam again, after it ran into some problems in February, when the stock reversed a breakdown below the 50 and 200 DMA. Since then the stock has rallied on strong volume, pulled back on light volume, has done that with BOP going green again, and with the RS and moneystream line leading this stock to new highs, the low volume should not matter that much. However, if volume does not come in soon after this breakout, we will need to get out it ASAP (recent example is ERES which just brokeout. But it has gone nowhere and now is a 100% sell). Cut your final loss with a close below the 26.23 level, if the stock does not move higher immediately.
new speculative long position: AREX SNT
AREX is putting in a very bullish intraday session, reversing a poor intraday showing into a strong close, and is breaking out to a new all-time high, on very strong volume. This stock had a nice flat and boring start in 2007 that came with some ugly price action in January. That however has turned into some solid price gains, on strong volume, with low volume pullbacks, green BOP, and with the RS and moneystream lines leading the way, ever since the uptrend got back on its feet in March. Cut your final loss with a close below either the 50 day moving average or the 17.42 level, if the stock does not move higher immediately.
SNT is breaking out to a new 52-week high, bouncing off recent support near the 50 day moving average, and is putting in one bullish intraday session, closing at the HOD, on very strong volume. This stock has been on my radar screen for a very long time as a possible speculative gem. This stock got its act together in December when it started to rally on very strong volume and max green BOP. Right after that the stock set up in a very long base and the stock did not start moving again until March. When it did it started first on light volume and then turned on the juice in April as a lot of heavy accumulation entered the stock along with the green BOP going max green. Everything was looking good and then in April it started this nice flat (slightly uptrending) base that has now resolved itself to the upside. The BOP is still max green and the RS line is leading the stock WELL into new high ground. This is probably the most speculative stock I have seen in a while as the fundamentals suck!! But, dang it, this chart is hot and if we can get an immediate follow-through I bet this little gem could be a nice long. However, KEEP IT SMALL PROFESSIONALS. And newbies, you should stay away as it IS WAY TOO RISKY with a 30% possible loss in this stock. I am talking KEEP THIS SMALL. But if you ever see this pattern in a stock with 99 EPS A SMR A acc/dis and has a 99 RS and a 99 composite, make sure you load up!! Cut your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.
GU is holding the 50DMA…. is that line magical or what?
Probably is but we need an entry, it failed once. It will need to show signs of strength.
Rob, GU failed!!!!!!!!!!!!!!!!!!!!!!!!!!! IT BROKE DOWN ON HEAVY VOLUME!!!! I am out of 100% of my GU long.
I took a 15% long on the position. DGLY, BKE, DAR, HA, ADEP, IRW, KOP, GENC, and GNET all look better and would have made better longs than GU. GU stinks but it was a smaller position. Remember, that day, BOP fell from max green after being max green the entire November. That was not a good sign to see max green lost on the b/o. The next day the stock failed to move higher immediately. That should have had you out at least 20-25% of it. Then the breakdown. With my sell this AM, I took a 15% final loss. I hope this helps. Cut your loss…move on to better stocks like GFA which is bouncing RIGHT off the 50 DMA and has an EPS rating of 93. GU was showing NO EPS growth and actually had NEGATIVE EPS numbers the most recent quarter. Hopefully, GU was as small a long for you as it was for me.
Its a small position and I’m pretty cash heavy to begin with. I put a stop in around 11.50 (right below the 50) and it didn’t hit. But as you said, I should have been out before all this.
I had a stop on FEED a couple weeks that also failed to hit before it exploded to the upside. I took some of it off when it got a bit extended.
hey Josh, I’m wondering if you have any fundamental insight related to CLR’s involvement in the “Bakken” discovery which is a mystery in itself, but you keep your ear tuned to the street so.. for me, the chart is saying there may be something to this myth (also HAL NOG BEXP ERF etc). Also curious as to what sets CLR apart from its compadres in this field as I might pick BEXP since it seems to have more to gain (smaller company). Also, would you plan on averaging down at the 50? Don’t think it’s getting there for a while with that nice flag and VOLUME tho.. BTW nice call on the intermediate Ag top.
I never average down. losers do that. I only buy stocks moving up.
I do not focus that much on CLR. CLR is a BABY position. I have no interest in it and will be selling 50% tomorrow AM as the stock has FAILED to move up immediately.
I NEVER average down.
Study my past big winners to learn why. There are so many example of huge winners, I have no clue why I get so many questions like this.
Please, everyone, listen…………I NEVER AVERAGE DOWN!!! I PYRAMID UP!!
It is all good. You have a plan and that is good. but remember if you do not have a track record of making money already, you should NEVER be taking a long with over a 10% risk. For instance, tonight: IRW, GTLS, and GFA should be YOUR ONLY long candidates. ADEP and PMFG are OFF LIMITS.
You are well on your way. You know what you did wrong and you also had a plan. That is all I can ask for…unless you are experienced…then we need to work on entries and exits better.
Great luck!