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Sample Newsletter: Mid-Week Alert 5/21/08
Market Summary: The market has been doing very well until the last 2 days when oil futures went through the roof and the short sellers finally had enough edge to bring in the sell programs, wave after wave. Then the FED's mundane comments from the last meeting allowed the sellers to push the DOW all the way down to 12,600 and the 50 DMA. I suspect there is a lot of speculative trading that is manipulating the oil futures to the detriment of the USA and I suspect George Soros is right in the middle of it. Naturally Congress is not accepting any responsibility for 25 years of denying access to some of the largest oil reserves in the world in our own backyard in favor of keeping environmentalists happy. HPQ reported last night and then managed to drop with the market and I will be watching it pretty close to see if we want to keep it through the summer when techs are historically weak. The good news is that all of the model stocks have reported earnings for this quarter. With the DOW sitting on key support at 50 DMA we will watch the trend tomorrow to see it can hold there or I might look for something to trim for cash.
CHAT SITE: The chat site is available for Poormans Investors on this website and I won't always be there, but I stop in regularly and then moderate if necessary. At this time all you need is to submit a "name" and your own password and upon confirmation of valid information - enter the room. A new program eliminated the sweeper and restarts new each day and at this time any one can access it. It has lots of "bells and whistles", etc and one of the best around. If you don't see a feature, just ask about it, as it was designed from scratch by Brad@wickett.net.
Some good looking charts (STOCKCHARTS.COM): Interesting charts: ABAT,GU, HCKT, NTWK, SOL, WH. See below chart and table listings for more possibilities.
Here are some indexes found on stockcharts.com:
$BPNYA - Bullishness chart .
$OSX - energy index chart
$SML - S&P 600 small cap
$SOX - Semis - usually do better in fall/winter, but not this past winter.
$VIX - Volatility index was 18.59 at close - over 13 indicates a sign of bears trying to control the market and push it down!
Note (repeat): I have waited for 4+ years for IBD/DGO to provide industry pe averages and in the process I came across HighGrowthStocks.com (HGS)which has similar groups as IBD and all the information I need for doing my ratings. It is complex software and I am just scratching the surface thanks to the help from my friend Jerry. I mostly use the industry pes from HGS, but made some adjustments or estimates in a few cases. They have 200 Industry Monitors and have given me permission to use a certain amount of their data (vice Vector Vest and IBD who allowed nothing to be used). In case you want to try it for 60 days, here is the link. http://www.highgrowthstock.com/referral.asp?id=3349
STRATEGY for using Poormans model: 1. This year we carried all 10 of the 2007 model stocks into 2008 without changing any quantities. If you plan on following the 2008 model in whole or in part, and haven't bought in yet, it is an attractive time when indexes maintain support over their 50 DMAs. I suggest taking your time and watch the marked stocks below and keep an eye on the nightly comments in the "MODEL TRADING STRATEGY". It is updated each evening and mostly considers stocks that are planned for any 2007 model changes. Some investors buy some of the model stocks and also some off of the shopping list. You can consider the bold/underlined prices for chart buys or pull back buys, especially if market holds and shows improvement. HOLD means I am holding the model and not considering buying until conditions improve. Chart buys (c.b.) and break out buys are very risky when the market is going down and not recommended.
2. If you allocate 50K for following the model stocks, just buy half the model quantities. If you have $10k or less, then I suggest you pick and choose 4-6 stocks and you can do that by leaning towards the ones with higher ratings (as they tend to out perform lower rated stocks) or just take the first ones that fill your orders. If my p.b. price is shown as $12.02 and it comes back to 12.10, you might want to grab it anyway if it has good upside potential. I provide near term and longer term (1 year away) targets. You can easily calculate the 1 year target (for example) by multiplying next year's estimate times the industry pe (Yahoo profile - industry - Indus pe). A full position is 10% of portfolio for $50k and larger.
3. I am more conservative (less recommended bold buys) in front of earnings and until we see what happens in the early part of the earnings season. The non-bold prices are secondary levels of information for more aggressive traders and are considered higher risk. Be careful when buying within 2 weeks of earnings release. I tend to depend on support points and fundamentals as opposed to an "8% stop" for example. If you have had success with them and market looks weak - then go for it. Some times I use a stop when a stock has hit my target area and I want to lock in profits, but mostly I have mental stops (reviewed at end of the day). Trailing stops also work well for stocks that ran up hard like BOOM and a favorite of momentum players.
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Key market numbers to watch: DMA: 9 50 200
DOW(12601)Sup:12573/12200 Resist:13137/13200;>/;<9/21/50/200 DMAs 12865 12625 13006
Nasdaq (2448)Sup:23752315 Resist: 2551/2600;>/50 ;<9/21/200 DMAs 2493 2375 2515
S&P (1390) Sup: 1368/1325; Resist: 1440/1523;>/50 ;<9/21/200 DMAs 1409 1368 1427
Russ2000 (727) Sup: 708/700; Resist: 744/800;>/21/50;< 9/200 DMAs 734 708 748MODEL STOCKS/CANDIDATES - UPDATED: 5/21/08:
Stk = Stock; Rtg = rating; #Sh = # shares purchase(d); Purchased Price Initial(in model); Sup = Support;
C.B. = Poormans Chart Buy (new high or PB); P.B. = pull back; investors Fair Value targets (near/long term);
Loss (courtesy 8% sell); Industry PE average; Analysts Estimates: c.yr = calendar year; n.yr = next year;
Earn date = estimated report date. Favored trades for new investors to consider: bold. (limited buying
interest in front of earnings). NOTE: Annual Estimates changed since the last update are shown with an underline. Bold => up.
Bold numbers are first consideration for possible buying. Target calculations for any Industry pe over 40
are adjusted to 40 maximum.
* Targets are based on INDUSTRY AVERAGE from HSG (highgrowthstocks.com). Add 10% if #1 in their SECTOR.
* Earn date watch: when they are expected to report within 2 weeks and buying is very risky.
* Days short interest (ref: HGS). Red/flag: 4.0 days or greater
* HGS targets/ratings sent out 4/23 (a few differences with this list - priority to these targets first).
* 5/7 updated short interest as of 15 APR monthly reporting.
* 5/18 Updated ratings. 5/21 updated buy points and some earn dates. 5/21 UPDATED INDUS PEs
MODEL Purch Buy Pts Targets_ DAYS INDUS Anal Est Earn
Stk Rtg #SH Price Sup C.B. P.B. Near Long S.I. PE c.yr n.yr Date AEY 0 600 6.17 3 4.30 21.05 0.8 27.7 0.76 8/11
AUY 10 400 13.98 14 16.50 14.05 35.20 41 0.3 40.0 0.88 1.04 8/7
BPHX 3 400 14.75 7 11.35 9.55 18.97 24 4.0 18.6 1.02 1.31 8/1
CDS 5 800 7.50 7 10.30 8.15 46.80 60 5.3 40.0 1.17 1.52 8/8
CSIQ 9 400 28.15 25 49.02 27.05 94.00 132 2.2 40.0 2.35 3.31 8/13
DAR 7 500 14.42 13 16.80 13.05 27.54 26 4.8 30.6 0.90 0.88 8/8
GSI 9 500 8.70 8 11.05 8.70 23.67 30 3.4 26.3 0.98 1.15 8/15
HPQ 3 200 47.75 45 49.98 44.05 94.60 105 2.3 26.8 3.53 3.93 8/20
LMIA 6 300 26.51 18 22.25 17.85 27.03 34 2.0 17.9 1.51 1.92 8/8
QID n/a 200 42.50 38 38.05
TBSI 10 200 33.06 40 61.98 40.05 107 113 1.9 16.3 6.57 6.94 8/8
TGB 5 1300 5.18 5 5.65 5.05 11.55 18 1.6 21.8 0.53 0.85 8/14
CGMFX 203 52.49 (Mutual Fund)
CGMRX 332 30.07 " "
ADDITIONAL SHOPPING (BUY) LIST (other stocks of interest) Trend FLAG: Green
(Targets: near term. e.g. LMIA 19.9 x 1.70 = 33.83; 2008 = 39)
MODEL GRP Buy Pts Targets DAYS INDU AnalEst Earn
Stk Rtg # Sh Sup C.B. P.B. Near Long S.I. PE c.yr n.yr Date
AEHR 8 8 9.05 8.25 16.07 23 0.3 19.6 0.82 1.18 7/24
AFSI 4 14 16.05 14.15 30.77 36 6.9 18.1 1.70 2.99 8/7
AIRM 0 35 38.10 35.05 65.95 81 7.6 26.7 2.47 3.05 8/14
AKS 4 60 73.17 62.90 122 121 2.8 26.3 4.65 5.04 7/22
AMPH 7 20 23.05 21.15 45.78 40 0.7 19.4 2.36 2.09 8/5
AOB 5 8 11.45 9.20 17.93 23 7.9 22.7 0.79 1.02 8/7
BGC 6 61 75.10 66.05 137 154 5.3 27.4 5.00 5.63 7/29
BOLT 4 18 21.10 19.02 35.69 41 8.9 21.5 1.66 1.92 7/22
CALM 7 28 35.43 30.02 116 10.4 20.7 7/23
CF 11 120 159.10 126.45 213 213 1.8 21.4 9.99 10.64 7/24
DXPE 2 37 42.50 37.70 69.74 82 2.2 19.7 3.54 4.21 8/12
EXM 9 37 61.07 37.35 109 110 2.2 16.3 6.74 6.72 8/19
EZPW 8 11 12.95 11.70 25.99 31 5.2 22.8 1.14 1.40 7/28
FUQI 8 8 9.85 8.02 19.98 25 0.1 18.5 1.08 1.39 9/25
GEOI 6 16 27.50 16.75 31.85 36 1.2 24.5 1.30 1.48 8/12
GHM 9 50 50.05 65EST 62 0.2 19.7 2.74 3.17 5/30
GTI 7 18 40.95 22.30 26.19 29 3.1 13.5 1.94 2.19 8/1
GTLS 4 34 40.25 34.05 62.25 60 2.9 21.5 2.43 3.04 8/1
HOGS 4 10 12.55 10.05 19.32 29 3.8 18.4 1.05 1.51 7/28
NM 6 10 15.05 11.25 22.33 29 0.4 16.3 1.37 1.83 8/16
NOEC 6 5 6.50 5.02 9.63 2.0 21.4 0.45 7/2
OFI 9 5 7.60 5.55 14.28 17 0.4 20.7 0.69 0.85 8/8
OTEX 4 32 39.19 32.05 68.71 79 27.4 34.7 1.98 2.28 7/29
QSC 4 3 4.90 3.65 14.64 9.3 25.5 8/1
SDTH 5 7 9.95 7.55 8.38 14E 6.3 13.3 0.63 0.78 8/8
SOLF 5 15 27.50 20.20 27.20 44 2.4 40.0 0.68 1.12 8/21
SUTR 7 5 9.45 5.95 19.92 22 0.1 26.3 0.76 0.87 8/14
TITN 7 17 20.05 24EST 1.9 16.9 0.77 0.91 7/28
TTES 9 45 50.05 57.67 70 3.4 17.8 3.24 3.98 8/7
UFPT 7 10 11.35 14.33 18E 0.1 16.1 0.89 9/1
UTF Util. Etf) 23.75 0.1
VSNT 5 25 32.20 28.05 79.27 2.3 34.7 5/29
WATG 4 6 9.55 7.50 11.94 15 1.3 15.5 0.77 1.00 8/13
WSCI 8 10 12.50 15EST 0.1 15.3 7/3
XIDE 6 13 13.25 16 8.0 17.9 0.23 0.90 6/11
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To view the model and shopping list data directly for easier printing: click here
Chart Higher Buy points hit this week: AUY, BPHX, AKS, BGC, BOLT, CSIQ, EXM, GTLS, HOGS, NM, NOEC, OFI, SOLF, SUTR, VSNT
Pull back BUY POINTS: None noted
ADDED TO DATABASE: None this week.
NEW ADDITIONS POSSIBLE: ACFN, AFAM, AFOP, AIRT, ATN, BTE, DRC, EDAC, EIHI, ENG, GES, GTE, GLW, GOK, HCKT, HDSN, HGG, IAO, NOA, PDE, SIM,STRL,
SVR, TCAP, TEAM, TGC, VOXX, WGOV, WH.
OTHER STOCK CANDIDATES:
Positive candlestick indicators: BOLT, CPX, GEOI, SOLF
From watch list:BOOM, HXM, NOEC, BBEP, FOE, PACR, AREX
Interesting charts: GTE, MDT, TGC, KCAP, AFAM
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Poorman$ information is obtained from data sources which I believe are reliable; including Highgrowthstocks.com, Quicken, Yahoo and Stockcharts.com. I am not a broker nor do I provide specific investment BUY/SELL advice to individual subscribers; rather, I am only authorized to provide information to assist individuals to make their own investment decisions. However, I am a registered Investment Adviser licensed in the State of Idaho. Past performance is no guarantee of future success. No retransmitting of this update is authorized without permission from the author. NEW SUBSCRIBERS ONLY: Just tell me "checks in the mail" (or soon will be)and I'll provide a password and add you to the distribution list.
SUBSCRIPTION :$10 FOR 1 MO: MAY 08 (based on $25 per month); $125 FOR UP TO 6 MONTHS (OCT 08) or $210. FOR 10- MONTHS (thru FEB 2009). Mail check to: Bruce Brotnov, 1111 Richardson Ave, Lewiston, ID 83501 |
