A Weight Has Been Lifted

It’s going to take some effort to take the emotion out of this post but here goes…

I wanted to discuss an upcoming change here at the blog and the reason why I would create such a headache for my readers.  Apparently some time ago, Investors Business Daily decided it was no longer acceptable for other websites to mention that they use the CANSLIM method or components of the method for stock selection.  Several months ago I received an aggressive cease and desist letter from Investors Business Daily claiming trademark infringement with the use of CANSLIM as well as the use of “investors” in my www.selfinvestors.com domain.

Fortunately, taking on a major corporation in court was averted and the legal weight around my neck lifted when we came to a settlement agreement out of court.  As a result of the agreement, I keep www.selfinvestors.com as is, but have agreed to remove all mentions of IBD, Investors Business Daily and CANSLIM from my sites.

As a result, I will need to change the main folder at the blog from /canslim_investing/ to something else.  No big deal right?  Well, actually it’s a major headache because of the way other sites have linked to the blog (linking to http://investing.typepad.com/canslim_investing/ rather than http://investing.typepad.com and how the RSS feeds are created.  Basically what happens is all links coming into the site will now be broken and all subscribers to the RSS feed will no longer receive the updates after the folder name is changed. 

On March 17th, the change will be made.  Once that change is made you’ll need to re-subscribe to the RSS feed if you’d like to continue receiving blog updates to your RSS reader.  I’ll be sending a reminder out on the 17th with specific instructions.

If you are a blog owner and currently link to the site, your help in getting this blog back on its feet by changing your incoming link is greatly appreciated.

I’m looking forward to putting this behind me, moving on and focusing on what matters.. and that’s helping self investors navigate the market.

My goal for the rest of 2006 – to stay away from doctors and lawyers (no offense Cindy 🙂

Today’s Notable Earnings Movers – LifeCell (LIFC)

Here are today’s notable earnings movers:
Note: fundamental rank in brackets does not include latest results

It’s all down for today.

DOWN

  • LifeCell Corp (LIFC) Biotech, [27/30], down 11%, reversing sharply following yesterday’s breakout, but still maintaining support above 50 DMA
  • Allis-Chalmers Energy (ALY), Diversified Machinery, [24/30], down 10%, taking out support of 50DMA once again, but still has support around previous breakout point around 14.70 for now
  • Logility (LGTY), Application Software, [23/30], down 8%, breakout from short base with no handle failing.. not much of a surprise there.  However, still has support above 50DMA
  • GFI Group (GFIG), Investment Brokerage, [24/30], down 5%, holding up at support of 50 day moving average and in the process of carving out a base

The Big Squeeze: Something’s Gotta Give

Are you ready for the final days of frustration, ready for this bull/bear battle to resolve itself?

With the market getting squeezed between an intermediate upward trend line and upper resistance, I think it happens very soon.  When a bull and bear are backed into a corner with nothing between them but a 16oz. tenderloin, something has got to give right?. (OK my analogies need some work, but it may be better than the dead cat bounce)

Here’s another bold prediction…  I have no idea where this market is headed.  While I’m still moderately bullish considering major support levels are intact and we’re making higher highs and higher lows, the market has failed to follow through on rally attempts twice now in the last couple of weeks and selling volume is beginning to overshadow buy volume.

Lets take a look at the squeeze on the charts.

You can see in the Nasdaq we’re right on that upward trend line which continues to squeeze the Nasdaq up to resistance.  We’re running out of room creating the likelihood of a big move in either direction very soon.  My feeling is we sell off a bit tomorrow morning but continue to hold up at that trend line for at least a few more days.  But time is running out….
(apologies for the grainy charts, the screenshot was taken a bit too wide)

The "squeeze" is also evident in the S&P as we sit right on that upward trend line as well.  Strong support at 1275 (notice the 50 day moving average converges there as well, adding strength to the support).

While there isn’t a well defined area of resistance around the highs of the Dow like there is in the S&P and Nasdaq, there is a clearly defined upward trend line.  It was discouraging to see that the Dow wasn’t able to hold up at 11,000 today, but it still has some support at the 50 day moving average as well as that upward trend line.

ETF Portal Launched!

I’m very pleased to announce the rollout of ETF Central, a site I’ve been working on in bits and pieces over the last several months.  I never thought the darn thing would get done but now it’s complete!   

If your at all interested in supplementing your portfolio with exchange traded funds, I think this information and tracking portal will be of great benefit to you.  ETF Central provides links to recent news stories, recent blog entries from top ETF blogs such as ETFinvestor.com and ETFTrends.com, links to books and resources as well as my own chart analysis and some built in screens for tracking top ETF’s. 

There is lots of information there, so have a look around and let me know what you think!

Today’s Earnings Movers – Men’s Wearhouse (MW), Chicos Fas (CHS)

Here are today’s notable earnings movers:
Note: fundamental rank in brackets does not include latest results

UP

  • Men’s Wearhouse (MW) Apparel Stores, fundamental rank [25/30] up 11%, carving out right side of long base
  • Aldila (ALDA) Sporting Goods, fundamental rank [26/30] up 5%, maker of golf club shafts continuing to make new all time highs after breaking out on Feb 21st
  • Tenaris Steel (TS) Steel & Iron, fundamental rank [27/30] up 4%, a stock mentioned here back in December before breaking out, up about 30% since and hitting another all time high today
  • Bancolombia (CIB) Banks – Foreign Regional, fundamental rank [25/30] up 4%, continuing its steady trend higher and showing no signs of slowing down

DOWN

  • Chico’s Fas (CHS) Apparel Stores, [28/30], down 12%, breakout failure, headed to next support around 40
  • Central European Distribution (CEDC), Wineries & Distilleries, [26/30], down 6%, holding up at support of 50 day moving average and in the process of carving out a base

Today’s Earnings Movers

Here are today’s notable earnings movers:
Note: fundamental rank in brackets does not include latest results

UP

  • Joy Global (JOYG) Industrial Metals & Minerals, fundamental rank [28/30] up 11%, this one just keeps on chugging
  • Cal Dive International (CDIS) Oil/Gas Equip & Services, fundamental rank [27/30] up 8%, latest results furhter confirmation that Cal Dive is a leader in the oil industry – currently carving out a new base
  • Southwestern Energy (SWC) Gas Utilities, fundamental rank [26/30] up 7%, carving out new base and continuing to hold up at 200DMA

DOWN

  • Housevalues.com (SOLD) Internet Software & Services, [26/30], down 27%, the breakout failed long ago in this one.. just more pain today and further confirmation of a slowing housing market
  • Fargo Electronics (FRGO), Business Software & Services, [23/30], down 11%, takes out support of 200DMA, but strong support at 16 where its bounced from today
  • Pacific Sunwear (PSUN), Apparel Clothing, [24/30], down 7%, has long been an underperforming retailer.. another reason to stay away from the laggards and stick with the leaders like ZUMZ, CTRN and TRLG
  • Perficient (PRFT), Business Software & Services, [24/30], down 5%, holding above 50DMA and remains strong technically.. and fundamentally.

Breakout Highlights: 2.14 – 2.28.06

The last couple of weeks certainly hasn’t seen a flurry of breakouts with a total of 27 breakouts out of the nearly 800 stocks that I track.  A more typical 2 week period might see somewhere in the neighborhood of 40 – 50 breakouts.  However, the success rate was very good with 19 breakouts ending the period with a gain and none hitting an 8% loss.

As usual, here’s a screenshot of the top breakouts over the past couple of weeks with a link to a larger version (so you can actually read it – imagine that)

The biggest breakout of the period belongs to Kendle International (KNDL) with a 20% gain from the breakout point.  Kendle is a highly ranked provider of clinical research and drug development services to the pharmaceutical and biotechnology industries.

The big loser.. well, there really weren’t any.  Two ended the period with a 2% loss (ASF and WEBX) and 2 ended the period with just a 1% loss (RL and VTIV). 

With oils and commodities no longer leading the market, new industries appear to be emerging to take the lead.  Medicals continue to do well, especially in the biotech arena.  Pay attention to this area.  I’ve never been a big fan of buying bank stocks but they have been showing signs of life and I’ve been noticing a pickup in breakouts in this sector.  The problem is most of them are highly illiquid.  If you don’t mind trading bank stocks that trade less than 50K shares a day, you may be able to find quite a few opportunities.  There is one bank stock that I like, which I’ve highlighted in the past – Wilshire Bank (WIBC).  Wilshire is the highest rated bank stock that I track and it broke out this week from a nice flat base with very heavy volume.

In the medical space, two highly rated companies broke out to new highs in the last couple weeks – Kendle (KNDL), which I mentioned above and A.D.A.M (ADAM), a company engaged in the creation and delivery of interactive health information marketed to health and educational organizations.

As you can see in the chart below, I’m calling the first breakout point above 26.44 as the stock cleared what could be called the middle peak of a funky looking double bottom base.  No it’s not perfect.  The second opportunity occurred after the stock cleared a new all time high above 29.50.  I probably would have avoided purchasing here given the quick rise.  I’d be more confortable initiating a position on an orderly pull back to around the all time highs (29 – 30) with declining volume.  It may be on its way to do that now, possible setting up another opportunity.

ADAM is a stock I’ve been watching for some time and have continued to be impressed with the technical action.  It rarely gets better than this.  Fairly tight price action, outstanding up vs down volume.. clearly there continues to be great demand for the stock.  The move up on Friday occurred with disappointing volume but other than that it still looks very good.  The selling of the past 2 days has not been particularly intense.  I would not be surprised to see the stock return to the breakout point at around 10 in the coming days, possibly setting up an opportunity for those who may have missed the initial move.  Just keep in mind that earnings are coming up on March 14th which will undoubtedly create some increased volatility.

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To wrap up this post I wanted to provide a link to the top breakouts of the first couple weeks in February.. it was a post I was in the process of writing before I developed the bursitus in the arm and never got a chance to finish it up.  Hope you find some opportunities in this list as well

Today’s Earnings Movers

Here are today’s notable earnings movers:
Note: fundamental rank in brackets does not include latest results

UP

  • Dynamic Materials (BOOM) Industrial Metals & Minerals, fundamental rank [26/30] up 4%, reclaiming 50 day moving average
  • Ceradyne (CRDN) Industrial Equip and Components, fundamental rank [26/30] up 4%, continues its long trend higher

DOWN

  • Homex Development (HXM) Property Management & Development, [26/30], down 11%, still has support of 50 day moving average
  • Astec Industries (ASTE), Farm & Construction Machinery, [24/30], down 6%, bouncing back to reclaim 50 day moving average after dramatic sell off this morning
  • InnKeepers (KPA), REIT/Hotel,Motel, [23/30], down 5%, attempting to hold up at the 50 day moving average
  • A.S.V Inc (ASVI), Farm & Construction Machinery, [27/30], down 5%, also reclaiming 50DMA after dramatic selloff early this morning

ETF, IPO & Breakout Stocks Analysis, Tracking & Research