September 30, 2009

Bank and Financial Stocks

I've had an eye out for anything financial lately. Especially looking for the beginning of a new run. CSGH isn't a financial I don't think but it has a great chart going for it right now. Might just run again tomorrow. Great volume spike.If anyone else has some nicely uptrending financials or ones that just had unusual volume anytime in the future post them up with the ticker in a comment anytime. Unusual volume spikes are great scans. I recently caught BRNC with one at a 5 handle and it ran to $7.

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full disclosure:no positions

Swine Flu Stock Alpha Pro Tech APT

CNBC did atleast one long segment on APT this morning as part of a swine flu segment. Here is the CNBC article on them to. This $130 million market cap company had heavy volume today on a gap up. I'm going to watch for a possible double top. It looks like the chart sets up for a short if it fills this gap. The chart is unclear to me until it retests that high. It very well could continue breaking out though because of this gap and volume. Though the past two times is has a gaped up it has pulled back immediately this year.

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full disclosure:no position

September 28, 2009

Stock ADPT

I put CHCI up as a watch the other day and this thing ran huge today and topped out at $.98. I didn't trade today but I hope some of you maybe saw these like VG to that I put on Twitter that ran today. LPTH was my top watch today and it ran 16% today off a easy set-up. The breakout was at $2.30 and it ran to $2.74. Net-Net MSN is holding up better than I expected. To many possible swing trades out there.

ADPT is testing around this new possible support around $3.00. It is congesting well so far which makes it seem that it might continue running. If I'm going to play it tomorrow is the day to go long. I think a good stop loss is right below $2.85. If you look on the 11th,12th and 18th $2.85 was the low of those days and important support. The likelyhood of it getting more downside when it cracks this is pretty good. So $2.83-84 is a good stop point with a profit target of $3.50-.60.














full disclosure: no position

Ben Graham Net-Net EFJI

EF Johnson Technologies EFJIMost of their business is from wireless radios. They sell wireless communications equipment with a large base of their customers being the government.

Major Customers

The U.S. Department of Defense was approximately 15%, 62% and 16% of consolidated revenues in 2008, 2007 and 2006. DRS Technologies, Sprint/Nextel, and the State of California are significant customers, representing 13%, 12% and 12%, respectively, of consolidated revenues in 2008.

Valuation
At $1.24 a share market cap is $32.74 mil and net current asset value is $39.41 mil. Net current asset valuation is a quick rough liquidation value. However, in this particular case almost 50% of NCAV (net current asset value) is comprised of inventory sitting in storage. In the event of an actual hypothetical liquidation it would very likely yield much less than the amount on the companies books.

2009 earnings per share have been boosted it appears to $.06 and a sole analyst expects $.10 for 2010. At 1.24 a share this is only about 12 times earnings and they could continue to grow over 50%. This asset valuation and trailing 2009 PE multiple of 20 seem nuts to me. Nuts meaning it might still be undervalued.

On the 15th of September volume soared and the stock flew on the back of a press release for their new Hybrid IP25 first responder radio system and 2 new military contracts for the radios on the 15th. I would have loved this stock at $1.00 because of the larger asset valuation cushion and also because of the price action. I believe the stock could have a pull-back soon which I explain in the following charts and I am going to wait a day or two to see what develops.


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In the above chart we can see that there could be strong support right around $1.00.


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The green line on ADX contracting worries me a little right now


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It's running on heavy momo(momentum) right now being that it is hugging the upper band. Some people could take some profits soon.


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The arrow on the right shows how buying volume is trending downward day to day which worries me that buyers might be getting exhausted in this round up for now atleast. Plus the doji candle two days ago and a shooting star candle Friday. The momo could very well continue for awhile but I feel more comfortable waiting just a day or two for either a pull-back or some other sign buyers are committed right now.


full disclosure: no position at time of writing

Strong KEME

I haven't traded any of those ETF's like I was thinking about like SRS or a short on the Nasdaq. This market continues to be incredible as far as the confidence in equities even with higher valuations. I'm not going to short any indices soon. I put this momentum penny stock KEME at the top of my watchlist the other day and ended up longing it at an average basis of $1.48 a share. It failed to breakout then has just seemingly re-tested and printed a hammer today. I'm looking for a breakout to sell into and add to my 7% profit so far. If it gets hung up again on the breakout and doesn't look strong I'll probably take the gain or cut it break-even to slightly down. This hammer looks really good to me though.

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full disclosure:long

September 26, 2009

Net-Net LDIS Is Liquidating

I just wanted to do an update on LDIS. In this press release they say they want to get a liquidation from between $.93 to 1.20 per share. This is right on the back of a Nasdaq deficiency notice for a low share price and it requires that the share price must now trade at $1.00 in the next 180 days or it could be delisted. I first noticed LDIS when it was at $.73 back in July. I can't seem to find a net-net I like that doesn't do well lately. Even net cash stock ACTS from awhile back has performed well. As of right now I'm not going to buy LDIS.


I sold INHX at $1.21 today from a $1.20 buy because I got a bad feeling about this action the past several days. They got some media? coverage I guess on a Seeking alpha article and a $2 target by Zacks. The thing I didn't like about that was it did boost the price into that breakout I was looking for but it looked like a bull trap and nasty shooting star to me plus I've got some back to back winners and taking a commission scratch on this one will probably be some good risk management that I need. It is still looking strong but I'd just rather buy the next big break if it comes.
















full disclosure: no positions

September 24, 2009

Real Estate Index In Trouble

Existing home sales fell very unexpectedly it seems.

I'm a day late in catching this perfect set-up but I think there will be some continuation. Maybe a lot of continuation. When I first saw the candle the arrow points to I thought it was a pure shooting star but it is more of a doji which is just as ugly being at the top of this chart. These two spike days back to back look very bearish plus that half shooting star/doji, plus the fundamentals.

I'm hoping for a pull-back so I can get long UltraShort Real Estate ProShares (SRS). If it gaps down I might go long to. The risk of taking this trade for more than a day or two is there is good support at 11.00 to 11.20 in SRS(the line) and it will probably bounce around before another big move.

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full disclosure: no position in SRS, IYR

September 23, 2009

ABK Ambac Financial

ABK's consolidation here around resistance is forming a nice looking triangle. It's congesting right around resistance which is very bullish. Add that healthy consolidation and this is a good set-up for a buy here on any pop in price. Especially on heavy volume over 1.81. I'm going to front run it and nibble on it here today. These are the kind of set-ups(triangles) that have been working so well lately.
















click for bigger picture
















ABK really gave off some easy signals to read in hindsight. There was a hammer at the bottom on 8-17 and a doji off that recent consolidation.



full disclosure:no position at time of writing. Order pending.

September 22, 2009

Trading Update

I sold ABK at 1.90 because it popped huge just like I expected. My cost basis on ABK was 1.67 so I did about 13% on it. I'm up some in KEME and INHX I'm about breakeven. INHX if you've been following me has been great if you could have gotten some off the 1.08ish bounce that I was looking for. I messed up the order and got a 1.20 buy fill the other day for INHX.

INHX and KEME are ascending triangles. INHX is a drug stock so I am not the most confident there will be a nice pop but it is looking good so far. I could have sold at 1.30ish but I'm swinging these until the price action occurs at the tip of the triangle or I stop out. So far I'm really happy with the success of this consolidation pattern(triangles), especially recently. I think from now on in up-trending overall markets this will be a great swing trading strategy for me. The stop loss is easy to place and the volatility off of the consolidation pattern produces nice runs like an NCT for example.

DITC is a value stock right above net current asset value I am liking the price action of right now.

full disclosure: long INHX and KEME

September 18, 2009

Stock Picks Are On Fire

You might want to just bookmark and check the blog every morning to catch fresh posts. For me atleast Feedburner email posts tend to be late a lot. I get my own posts with email feed to make sure the feed keeps working ok and sometimes the posts will come in up to one or two days late.


I'm going to boast a little on how well stocks I put up on this blog have done lately. I'd imagine if you all were watching these you might have commented. But then again since I started to find my groove these past few months in many different strategies I guess great picks are more common now. Boasting how well my watches do probably gets a little old but this past week has been amazing as you are about to see. I'll cut down or cut out the praising my own picks in the future. If your new to the blog or are passively just reading I just want to give you the heads up. I find winners in all types of markets. Bull or bear. Unlike other pure value investors who are sucking their thumb right now trying to find potentials.

My financial picks from the other day which included GNW and HIG among others did amazing if you saw that. I mentioned NCT in that post just yesterday and it was one of the top gainers today 20% gain along with SPDE. Remember SPDE? SPDE was up 118% today! ARNA was in that watchlist to and it was up big after hours today. Both of these stocks ran after triangular consolidation. I knew ARNA was a good watch because of how it has run in the past. It likes to squeeze shorts too. ARNA was the stock I predicted and won Timothy Sykes price target contest with.

I made a statement some months back that this is the best blog for net-net(net current asset) ideas. In 2009 I had 25 winning net-net picks and 4 losers. Since all of those were just ideas I measured their performance as if someone bought them the day after they first appeared on the blog and held through the stocks runs. With most of the ideas it would have been hard to lose money because you just had to wait for some gain and sell. Someone didn't think those picks were good and mentioned Greenbackd.com as the best site for net-nets even though my ideas went on for the biggest percentage gains. Remember I found PIR at rock bottom among other gainers. Well, so far it is looking like I might not even have to separate this blog from the small handful of other top net-net blogs maybe. I left a comment in Greenbackd's post because they were asking for comments on the market. http://greenbackd.com/2009/09/16/ring-the-bell-announcing-the-inaugural-gizzard-squeezer-gong/

EDIT: apparently, Greenbackd comments section posts newer comments at the top of the comments where I never expected them to show up. Disregard the next paragraph.

I tried to post a comment that I thought the last couple decades was fantasy so it is very likely the indices will not see new highs for a very long time. I also said check out ADPT because the activists are getting busier in that stock. I tried to post the comment because I thought it was appropriate and with good intentions. The comment form had a standard name entry space and url. I used my name and the url to my blog. Their blog has moderator approval on for comments and for some reason they have yet to approve my comment. If they don't want people using a url along with their name I don't see why they would even give that option. Do they not like intelligent comments? Are net-net comments inappropriate for a deep value site? Hmmm, I wonder why this site would be a threat to their readers? ; )



full disclosure:no positions

September 16, 2009

Financials Still Strong

The stock watchlist I put up the other day when financials were at technical support levels has done pretty good. Actually really good. GNW since that list ran from $9 to $13, 40% run. HIG is over $28 now. RAS took off. SUPG is breaking out a little here. SBGI is up a $1 to $3.80. I put that list up because financials had flagged down and if the run was going to continue those were some of the best financials to try and trade the possible move with. I'm sure there are some compelling fundamental reasons institutions are accumulating them. I don't really care because I can just see their footprints.

FRZ and KEME are still consolidating. I'm still going to keep an eye on KEME and SUPG. NCT is breaking out. I'm long INHX and am looking for a breakout. It's slowly moving up with higher highs. I didn't get the price I wanted. I wanted a conditional trigger buy if it fell to just over $1 at 1.08 but I got filled at 1.20 I think. Still will be good if it breaks out. It sure has found support right around $1 these two days though.

full disclosure:long INHX

September 15, 2009

Coffee Stock Caribou Coffee CBOU Quick Take

Caribou beat by $.10 at the beginning of the year and had decent numbers in that hellish economy. In hindsight I guess that was one of the fundamental buy indicators. I was onto the stocks breakout but never bought any shares to hold. They have been upping guidance pretty consistently lately and I believe right now are guiding for $.38-.39 next full year. With the stock at $7.50 that seems about right at a forward PE of around 20.

The reason I am bringing up CBOU again though is I stumbled upon a coupon in the local newspaper advertising section for Caribou Coffee. What really surprised me was that the coupon was for buying their beans(or ground coffee beans). It said they were "available at a local grocery store near you." This is very good for the company and their brand. For years they have had independent reviews that ranked their coffees,especially their light roast coffees higher than competitors like Starbucks.

For some reason over the years they had been slow to sell their coffee in stores. Wholesale businesses getting coffee directly to consumers from other stores are what has propelled Diedrich Coffee (DDRX) from $.40 this year to $25. I probably had been saying that in my older CBOU posts. I knew it to be true since 2005 before Caribou started the aggressive turnaround.

What selling more of the coffee in stores means to me is it can act as a cushion around store operations because of its profitability, allow more consumers to find their brand, and possible allow for more upside surprise in EPS.



full disclosure:no position

September 13, 2009

Interesting Stock Charts

Huge volume spike on Bronco Drilling Friday. This ran to 5.40 after hours. Their balance sheet has been improving quarter by quarter.















Looks a little like a failed signal on the triangle breakdown. That sell-off went nowhere and it bounced back nice. Looking for volume to come back and big pop very soon.















I think ARNA has phase III results soon.














Nice volume spike and looks like clean breakout in works. Could just take off.














Hammer right up at resistance. Looks bullish.














Still breaking out. Amazing.














Possible this was a bull flag.
















full disclosure:no positions

September 11, 2009

ZRBA Net Cash Stock

ZRBA is no longer going to do the liquidation and put out a press release yesterday they are exploring strategic alternatives. I'm holding from about $3.90 and the stock popped up to $4.97 and I just sold at $4.66. The way this thing has traded on news in the past is it runs big first day then because know one trades this stock it falls off the next day. Whoever comes in with size will probably do this again and I can't afford to wait however many months, years for a bid on this company to possibly come in right now when I have a big profit margin in my face and the information I mentioned above.


full disclosure:no position ZRBA

Stocks To Keep On Watchlist

ADPT had a big volume spike the other day when it ran over resistance. This was a good entry point and see how it bounced off support in the upper $2.80s where I liked the stop loss just below? I don't BS with these stocks. Especially net-net's. This set-up is still here. It just tested support(former resistance) and could just breakout or consolidate again. A new entry would be best on a breakout I feel because the best stop off of a new entry isn't to clear to me. A stop loss for a breakout entry over 3.13ish would be 2.95.

















PGV is back in play. This thing loves to run. DEAR is in play and is a bank so you know what the appetite can be like for a stock like that. Huge run though. Would be surprised to not see some consolidation. These stocks I just throw up on watchlists are ideal for daytrading and are just watches. If I do an entire post on a stock I really mean business on it. BSTK from the other day ran 90% that next day.




full disclosure: no positions

September 10, 2009

Trendline Charts

I longed FSII. I'm just looking for 8% or so because I'm chasing it and I'm going to use a mental stop loss if it breaks this trend line on any decent sell volume. Click on these pics to get a bigger image.



















EGMI's trend I drew up has held up as it has bounced nicely off it. It's really amazing how much information the market will give you if you look at it. On the first pull-back volume decreased on this stock until it bounced off trend line. Similar on this second pull-back where I drew the down arrows. This last time though all the sellers shook out in a crescendo and it made a bullish engulfing pattern.



















full disclosure:long FSII

September 9, 2009

Net-Net FSII Soaring

I first found this net-net at around $.60 and it was at a big discount to net current asset value. I put it on the stock watchlist Monday because it broke out of a triangular consolidation. It's slightly over NCAV of $28 million now at over $1 a share. Huge volume today.















full disclosure:no position at time of writing

September 7, 2009

Strong Stocks Watch List

The financial sector has bounced off an important technical level on light volume. XLF, the sector ETF printed a hammer Friday which could be bullish. Anyway, these are a handful of stocks that stood out to me technically and have some momo going for them for potential quick trades.

Financials

RAS flagged and bounced real well.



















GNW same but trend line a little more defined.


















HIG two hammers back to back off trend line. This chart looks the best out of these financials as far as technicals with the two hammers and clean trend line. Just needs volume to follow through again or a move over Fridays high.


















TGIC seems due for a bounce.





Trying to hold uptrend. Last time it congested around trend line before run.



















Nice consolidation. Looking for breakout.


















Looks good on breakout.


















Former deep value FSII continues to impress. Nice volume on this tech stock.


















FRZ maybe good on breakout
























breaking out



























Should be a good watch list for some good moves if the runs continue.



full disclosure:no positions

September 2, 2009

Stock Market Analysis

My technical bull call from about a month or so ago on the major indices has been right on. Around Dow Jones 9,500 was some key resistance. Dow Jones 10,000 would take out some good resistance levels and about be confirmation of a technical bottom. It looks like this is going to be a struggle with these fairly valued valuations. I had no idea what the fundamentals and economics was going to look like a month ago or even four months ago. Fundamentals and valuations are powerful I feel and know to. It's a fact technicals can only go so far. Economic reality is a powerful slap in the face.

In that last link you can see how the overall stock market started breaking down technically when valuations were at historic levels in the tech bubble nine years ago. People were blinded by the "new age" of technology and valued stocks as if they could grow profits beyond the possible. Once the technicals matched the fundamental picture that was the time to take profits and get short.

If the economic data stays about the same going into the fourth quarter 2009 and 2010 and GDP adjusted for stimulus stays pretty crappy its an easy short in my opinion on overall fundys.

Valuations

S&P 500
Trailing PE
70.85
Forward
17.24

Naz
Trailing
43
Forward
20 !

Dow
Trailing
15
Forward
15


This is not just another little recession. The economy is not going to blast to new heights any time soon. Forward valuations look more like a regular old recession is about to end I feel. The consumer is different now. The consumer is saving more now and deleveraging the last 15-20 years of insanity. This could take some time I believe.

The question I have been asking myself is just how long can the government spending and low rates continue to have a positive effect on the economy without bankrupting us in the long-term if it is not to late already. Could the FED and government stimulus actually work? They certainly had an effect in the past. But just how bad is the recession/depression? It's not easily overcome right?

I think these valuations are getting to optimistic and we are about fairly valued here. There is the possibility that the run continues hoping for a big, real change and in that case I feel that 12,000 on Dow and 1,300 S&P are the easiest levels to get short on a solid technical signal. I'm still watching for a signal here for a short. A major wide ranging day where we see a 3-4% plunge would be a good signal. There isn't a spike top here like we had on the last tops over the last year. This action the past day is not looking like a major signal. A spike/wide ranging drop day and a gap down should be good technical analysis indicators going forward. Feel free anybody to comment on the economy and valuations and disagree with me. I like hearing all sides to things and I won't bite.






























source on PE ratios

Nasdaq Top Forming

I'm really seeing strong bearish signals forming on the Nasdaq. I was going to mention in the previous post that Shanghai has had some major trouble lately to. This is also a small part of why I'm looking to get bearish here.

This trade to go short is looking better and better as I look at this chart coupled with valuations. I mentioned before I wanted to see a spike day. I hadn't looked at the Nasdaq percentage loss yet or the chart. Well, there is a decent spike day. In other words a volatile day. It isn't all that nasty a day actually but if you look at some other things I am seeing there is not a good chart here.















My red support line shows an internal trend line that touches support 4 times. The buyers and sellers in the market are comfortable with moving prices higher on that trend line. The chart has rising lows. This is bullish. However, it is right on trend line support again here with an ugly shooting star/gravestone candle. It was also a volatile day on strong volume.

The resistance trend line shows us that the Naz has been making higher highs to. This was bullish too. But, on that last push the market got the breakout but failed to hold the higher high and continue. You can see it in the chart below. The last time the momentum stalled was about 1,850 and it brought the drop below trend line support. The only drop below it. This last move here is different because it actually made a higher high but buyers immediately got shaken out.















This is also a potential double top forming that the arrows point to. I feel like confirmation of the top will be right around 1,900. I plan on getting short before hand though. The fundamentals for a short look good to. I am thinking I want to get a little broad market exposure short with the bear 3 X short Technology ETF (TYP) or another market ETF. I want to enter on any weakness and any break of trend line support. I think the risk reward is good here even if this isn't a major top and we just get another day or two of pull-back. If I swing something the next support level is my profit target. Right above that red confirmation line on the second chart. If we get a big gap down I'll probably be even more bearish.

I think I might start doing video and audio charts sometime soon. Keep an eye out for those. And if you get my posts RSS be sure and subscribe to the comments to. I have the widget for that on the right sidebar. There have been some good comments lately. Especially on the Vonage VG post.



full disclosure:no positions at time of writing