Company Earnings

Notable Earnings Announcements For July 11th, 2005

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Earnings season is beginning to ramp up and kicking it off this week will be reports from Genentech (DNA) and Posco (PKX) (the Korean steel producer) on Monday.

Genentech will report after the bell.  Considering the big run up in the stock in the past few months, this is not a stock I would be willing to hold through tomorrows earnings report.  Although the company should report outstanding results once again, investors may be looking to take profits on the news regardless.  How about that move in Amgen (AMGN) last week.. looks more like a momentum stock rather than a big cap, blue chip!!

As for Posco, I wasn’t able to come up with the time they will report.  Steel stocks have begun to show some signs of life lately and Posco looks poised to begin to carve out the right side of a base starting with a nice move on Friday.  Many other steel companies have been warning of slowing growth of late, so it will be interesting to see what Posco has to say about the future outlook.

Stocks

Top Breakouts (6.27.05 – 7.8.05)

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Breakouts left and right.. 52 over the past 2 weeks to be exact.  The following screenshot was taken of the SelfInvestors.com premium database.  This particular filter displays breakouts for the past 2 weeks and the screenshot below displays the top 13 (with a Total Rank of 50 or above).  For more information on the SelfInvestors.com premium database and how it can help you find the best opportunities please have a look here.

(too much data, too little room – click here to see a larger image you can actually see)

Of the 52 total breakouts in the last 2 weeks, 37 are currently holding a gain, while 9 have a loss and 6 are holding the flat line.  Clearly, breakouts in small to mid cap growth stocks have been performing quite well despite an uncertain market.

Oil, property managers and banks have been leading the way in terms of number of stocks breaking out recently.  Two top rated oil companies, Berry Petroleum (BRY) and RPC Inc (RES) both remain in a buyable range although buy volume could be better in both of those positions.  Property managers/developers remain strong with another top rated breakout in this group from Levitt Corp. (LEV).  The chart looks outstanding, the stock is a bit extended after Friday’s move.  It might return to around 31 offering a better trade.  I’ve been holding two other leaders from this group in the SelfInvestors Model Portfolio for some time – CB Richard Ellis Group (CBG) and St. Joe Company (JOE) which continue to act well.

The top rated breakout in the database in the last 2 weeks has been HDFC Bank (HDB), a leading Indian bank.  The stock broke out on June 30th, but quickly reversesd and closed the day below the pivot point of 47.60.  However, the stock has recovered quickly, making its way to the next level of resistance right at $50/share.  While you could have purchased the stock at the formal pivot point, I’d be more comfortable getting into the stock after it breaks through 50 and then returns to that 50 level on decreasing sell volume, finding support there.  Considering the severe decline in the left side and the quick gains in the right side, it’s probably best to be patient and see how the stock digests recent gains in the coming weeks.

HDFC Bank reports earnings this Thursday, July 14th.

In terms of technicals (fundamentals aren’t too shabby either), the most promising breakout of the past two weeks (which broke out to all time highs on Friday) has to be in Grupo Aeroportuario (ASR) which operates, maintains and develops airports in southeast Mexico.

Mail Bag

A Member Recommends Some Reading

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I’m familiar with most of the books recommended. In my humble opinion, they are more of an investment classics actually.

Would recommend 1 more though

Lessons from the Greatest Stock Traders of All Time – John Boik.

It includes to-the-point essential techniques and rules, charts, Short and Concise and Easy to read or re-read
( These elements are important and helpful in sustaining a long term discipline )

It features these 5 traders

  • Jesse Livermore–How early market defeats taught him the number one rule of profitable trading–Cut your losses and move on!
  • Bernard Baruch–Techniques Baruch learned from his $5 a week Wall Street job–and how they helped him build a multimillion dollar portfolio
  • Nicolas Darvas–What this "outsider" did to regularly outmaneuver Wall Street’s top pros in his spare time
  • Gerald Loeb–What Loeb saw that many others missed, allowing him to sidestep the Crash of 1929
  • William O’Neil–How O’Neil expanded on the time-honored rules of his predecessors to become a great modern-day success story

If there is only one book that an investor can read, it’s definitely this one. And just as Nicholas Darvas re-reads Loeb’s book every 2 weeks while active trading, this is definitely a top choice for current investors.

If sections were prioritized for re-reading, my recommendations would be
1.) Nicolas Darvas
2.) William O’Neil
3.) Jesse Livermore

There ‘s another investment classic series which i may intend to acquire and read or recommend :-
A fool’s money – John Rothschild.

Mail Bag

Beware ‘O Claims of Outrageous Returns

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Question:

I noticed last years annualized returns is 32%.

Actually, there was another website whose analysis and annualized returns is about 100% and there was another website focusing on volume analysis that reflected an even more postive returns of over 200% with QQQQ options trading!

This is not to say who is better but just can’t help noticing the difference and wondered why…any comments ?

My Response:

I’m glad you asked about returns.  Annualized returns of 100% are highly unrealistic over a long period of time.  Yes, 200% gains with options can be had over a short timer period.  However, options can be quite risky and can be become quite complex when combining different kinds of orders.  The majority lose money trading options.  Be careful about these kinds of claims.  When sites makes these claims, they are often referring to a theoretical portfolio where they take the price at the date of recommendation and use the high of the stock.  When you see a site that advertises these kinds of returns I encourage you to ask these kinds of questions:
 
1. Are the returns based on an actively managed portfolio? 
2. Do you take position size into account for each recommendation?
3. Do you issue buy and sell alerts for each transaction of the portfolio?
4. Is each transaction tracked and are updates given throughout the holding period?
 
If these kinds of questions can’t be answered with a yes, then I would be highly skeptical.
 
If in fact returns are based on an "real" model portfolio like the one here at SelfInvestors.com, then I would ask to see the results of each position and the gain/loss.
 
One of the reasons I got into the business was because I was frustrated with the lack of integrity in this business.  I don’t make wild claims about returns and the model portfolio is a real world view of an actively managed portfolio.  You see my triumphs and my mistakes.  No hype.  That being said, I’m extremely happy with my returns which represents more than tripling the performance of the S&P over the last couple years.
 
Do I lose  members who start a trial and immediately compare my returns with the "unverified" returns of another site?  Yes, it happens.  However, I will NEVER resort to that kind of advertising.. period.
ETF Movers

Today’s ETF Movers

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The market continues to show its resiliency today and is battling resistance areas in the Dow (10440) and the Nasdaq at 2100.  However, volume is not particulary heavy today considering the magnitude of the move.  If the Dow and Nasdaq can hold above resistance levels and volume picks up significantly above the average levels in the last hour of trading, it would be a BIG step in the right direction.

Here’s a look at the ETF’s that are moving with volume today (data as of 2:30 EST):

Ticker Name Price Today Price Change % Vol Change From Avg DI20 DI40 RS % From 50DMA % From 200DMA
IBB Ishares Nasdaq Biotech 71.61 2.08 77 9 8 41 7.54 4.13
EWC Ishares Canada 18.85 1.4 93 5 5 63 7.84 10.88
RTH HLDRS Retail 98.88 1.14 56 -1 2 49 5.48 3.7
ILF Ishares Latin America 94.19 0.75 60 2 1 74 7.31 17.99
IGW Ishares Semiconductor 55.12 1.51 59 -2 0 49 5.39 7.11
PPH HLDRS Pharma 72.74 0.99 32 -1 -1 62 -2.43 1.07
EFA Ishares EAFE Index 52.4 0.87 60 0 -2 58 0.23 1.06
IJS Ishares S&P 600/Barra Value 63.25 1.09 133 -4 -4 61 6.05 7.79
IGV Ishares Software 39.22 0.87 46 -5 -6 60 2.08 0.85

You see that semis, healthcare related stocks and select software are doing well.  How about the Canada ETF!  It broke out of a nice looking base with volume yesterday and looks very strong.

Note: The DI 20 and 40 scores are proprietary indicators of SelfInvestors.com that measure demand in a stock based on price and volume movements over a period of 20 and 40 days.  The higher the score, the greater the demand.  It’s not surprising that the Biotech ETF (IBB) is showing the highest DI scores in the chart above.  Take a look at the chart and you’ll see high volume buying and low volume selling.  It has soared above resistance of the 50 and 200 day moving averages in the last couple of weeks.

Company Earnings

Notable Eearnings: Research in Motion (RIMM) Reports After the Bell

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After several quarters of tremendous growth, Research in Motion (RIMM)

is expected to begin to slow but still maintain solid earnings growth.  Their earnings report after the bell today should shed some light on the impact of recent lawsuits and the outlook in the months ahead. 

The chart of RIMM is not a thing of beauty and with an RS rating below 50, this is a stock I won’t be touching for some time. 

You see RIMM carving out the right side of a large, very choppy base.

Company Earnings

Notable Earnings Announcements For Monday, June 27th

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I’ve added a new section that will highlight some of the more notable earnings reports for the following day.  This is the first post for this section and on tap for tomorrow are reports out of Walgreens (WAG) at the market open and a report from Sonic Corp (SONC) after the bell.  I will include a thumbnail image of the information that can be found in the SelfInvestors Breakout Tracker database for each stock which can be found below (for more information on this database and the information in the various columns, please have a look at this page).  At times I may include charts, time permitting.

(click the image for larger look)

Walgreen’s and Sonic are two very consistent companies with solid fundamentals.
It appears the base that Walgreen’s has been forming over the past couple months is on the verge of breaking down and looks like its on the verge of a much larger move down.  As for Sonic, it’s been carving out a decent double bottom base and is working on carving out the right side.

State of the Stock Market

Just a Quick Shakeout? Probably Not

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After briefly breaking out of a fairly tight trading range towards the end of the last week, the market reversed course in a big way on Thursday and Friday.  Conditions were certainly ripe for some profit taking, especially with strong resistance remaining in the Nasdaq, but the magnitude of the decline raises a red flag.  The Dow looks awful at this point, plummeting below all major resistance levels in just 2 days.  The S&P and Nasdaq are fairing much better, with each above major support levels of the 50 and 200 day moving averages.  The action indicates that we’ll probably remained mired in a choppy trading range for at least a few more months.  It just seems highly unlikely that the market can muster enough strength to break out any time soon.

It should be a very interesting week ahead of the holiday weekend with the FOMC meeting on Thursday coinciding with end of quarter reshuffling.  After locking in profits and/or limiting losses on nearly half of my positions over the past couple days, I for one won’t be doing any more major buy and selling until the end of the quarter flurry is firmly framed in the rearview mirror.  We’ll have a much better idea of the health of the market several days after the 4th of July.

In the chart below, you see that the Dow has broken through major support of the 50 and 200 day moving averages with heavy volume.  The next logical support for the Dow would in the area of the Dow 10,000, where it found support in the last leg down.  It’s going to be very difficult for the Dow to put the brakes on the downward momentum and push back up through those major resistance levels.  Doing so quickly would be a major positive for the market, but I just don’t see that happening.

You see the Nasdaq hitting resistance at 2100 once again.  I wouldn’t be placing large bets on much of anything until the Nasdaq can clear that resistance area with good volume.  Next logical area of support around 2000.

The S&P remains in much better shape than the Dow, but it’s difficult to ignore that head and shoulders (although not very symmetrical) topping action.  Look for firt support around 1175.

ETF Movers

Today’s ETF Movers

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Volume is accelerating during the selloff over the last hour or so as key support levels in the major indices approach.  Here’s a look at which areas of the market are moving with volume today. Data as of 3PM EST.  The only bright spot today appears to be the semis.

Ticker Name Current Price Price % Change Vol % Change RS % From 50DMA % From 200DMA
EWW Ishares Mexico 26.8 -0.85 40 64 6.99 12.42
IGW Ishares Semiconductor 55.31 1.26 45 49 7.96 8.05
SMH HLDRS Semiconductors 35.13 1.12 89 52 6.81 8.43
EWZ Ishares Brazil 24.29 -1.46 94 70 5.29 13.03
IWD Ishares Russell 1000 Value 67.48 -0.57 145 61 2.54 4.14
XLI SPDR Industrial 29.65 -1.46 74 63 -0.6 -0.8
IYM Ishares Basic Materials 47.3 -1.97 63 45 -0.55 -2.93
XLP SPDR Consumer Staples 23.02 -1.03 249 58 -0.65 0.74
EWS Ishares Singapore 7.63 0.93 39 66 2.83 5.53
BHH HLDRS B2B Internet 2.07 -2.82 66 24 -10.39 -18.5
IYT Ishares Transportation 62.53 -2.65 139 70 -1.48 -2.51

ETF, IPO & Breakout Stocks Analysis, Tracking & Research