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Top Rated Stocks

June 2, 2008 by 13 Comments

Today I am posting a list that shows the stocks that are making multiple screens based on my fundamental screens and scans (click the link to understand the criteria in more detail). I run these scans every night and make notes of stocks that are appearing on more than one screen (I have found that these are the strongest stocks in the market and have been using this method for almost eight years).

I do own several of the stocks listed below but I am always ready to jump into new opportunities when the risk/reward warrants the purchase. I keep my personal watch list up to date on a daily and weekly basis so I can make a move when the charts are screaming buy. I also watch my current holdings to look for red flags that help me determine if a stock needs to be sold (yes, I do have predetermined sell points once I reach a 25%+ profit but I do remain active when monitoring my portfolio).

Two of the most important screens that have helped me buy and sell since 2007 have been stocks with:

  • Institutional Sponsorship Increasing
  • Quality Stocks with a new IPO within the past two Years

Stocks making new highs and stocks within 15% of new highs haven’t been my bread-and-butter in 2008 nor have stocks trading along the 200-d moving average. I have explained in the past how I use my screens and scans and how I determine which ones are more relevant during specific markets environments.

Top Rated Stocks according to my Research
*Disclaimer – this is not a buy list!*

  • SOL – 25.08, ReneSola Ltd. , the young stock has moved from $7.36 to a peak of $29.48 in two months with solid institutional accumulation along the way. Any drop with support in the $20 area is an excellent risk/ reward buy.
  • POT – 199.07, Potash Corp. Saskatch Inc., is the superstar of all superstar stocks over the past two years. Shorter term plays can happen on pullbacks to the 50-d m.a.; longer term accumulation can take place at the 30-week moving average. I wrote about the sister stock IPI in April.
  • MA – 308.65, Mastercard made another new all-time high this week as it reached $320 with consumers using the plastic as their home equity loans dry up. I still own the stocks and will continue to hold untila trend snaps.
  • SD – 55.00, Sandridge Energy Inc., made another new all-time high this week and it continues to trend higher on increasing volume. A couple late day reversals to end the week sent up a red flag (minor at this point in time).
  • GTLS – 41.89, Chart Industries Inc. is trading near new all-time high territory as the trend is higher. A move above $43 will trigger a triple top breakout on the point and figure chart (a positive sign if it comes on heavy volume and without a reversal).
  • TITN – 24.30, Titan Machinery Inc. is still making new all-time highs but did run into some selling pressure near the $26 level. The trend is higher and I am holding until told otherwise by the charts.
  • GFA – 44.68, Gafisa has been an enigma in my mind as I figured it would be much higher by now based on fundamental and technical feedback. But, we all know that’s not how the market works – it’s not rational in the way we think it should be. In any event, GFA remains a top rated stock on multiple screens I run every night.
  • V – 86.36, Visa is closing in on a new all-time high after the recent dip from last week which did present an excellent buying opportunity or additional accumulation area. I am a holder and will look to add on opportunities such as last week as Visa remains the new MA in my portfolio eyes. Again, the market must tell me otherwise before I consider selling.
  • HES – 122.81, Hess Corp. has been on a tear but is now extended from the major moving averages. Ideal accumulation areas along the present themselves on pullbacks to the 50-d m.a. and/ or 200-d m.a.
  • LL – 15.88, Lumber Liquidators, the recent up-trending chart is nice to look at but I am skeptical about its market. It sells hardwood flooring and we all know the construction industry is taking a black eye in the media and sheep follow the media (their decisions are based on what they see and hear). Regardless, the stock showed up on multiple screens once again so I can’t ignore it because of my biases.

Other High Rated Stocks in my System:

Filed Under: Daily Stock Screens, Stocks

Hot Momentum Stocks

May 20, 2008 by 1 Comment

SOL Remains HOT after my post titled SOL is ‘En Fuego’

SOL – 27.80, ReneSola Ltd. was up 6.76% Monday on volume 325% larger than the average. I told you last week that this was one momentum stock you should not ignore. It’s now up almost 30% in three days after my Thursday morning post. It was up 15% last Wednesday, one day prior to me highlighting the stock which is why I will repeat that stocks in motion typically stay in motion (simple physics – right).
5/14/08:

Renesola Ltd (SOL), $21.67, is on fire over the past several weeks since its IPO debut in January. Volume has been exploding as the stock is up almost 200% since it’s low in late March. I have been watching the stock as it has crossed dozens of nightly screens but decided not to post it to the blog until now.

If you want momentum, SOL is currently providing it. The stock was up more than 15% today on volume 409% larger than the average. At least 11 accumulations days have occurred over the past month as the stock started to log new all-time highs.

A couple more HOT momentum stocks:
VISN – 22.53, VisionChina Media Inc. has also been tearing up my nightly screens but it slipped past any and all ideal entry points for me as a trend trader. It is now in the hands of the day traders with a year-to-date gain of 146%, a 148% gain over the past three months and a 42% gain over the past month.

CSUN – 13.06, China Sunergy Co. is now up more than 47.74% over the past month but is still down 20% from my original 2008 post of $16.15 on January 4, 2008 (however, I did state: Ideal Entry: $12.00). The three month gain is 80.93% with a peak of 97% – I timed this one wrong but saw the trending potential back at the turn of the year. Patience – a must in this business. CSUN did reverse Monday – the first red flag in May.
1/4/08:

China Sunergy (CSUN) is part of a booming solar industry that includes stocks such as the ones listed below; all head lined by FSLR, a stock that is up more than 700% over the past year or so.

FSLR – $265.87
STP – $88.22
SOLF – $36.95
YGE – $38.02 (another stock I am looking to add)

One last word: watch the daily action because the summer months are coming – sell off time (hint, hint). Have all stops set and always look for red flags! Enjoy the momentum while it lasts but NEVER let a solid gain slip away.

Filed Under: 2008 Stock of Day, China, Stocks

Portfolio Stocks on the Move

May 19, 2008 by Leave a Comment

Today I cover four stocks that have been padding my portfolio over the past several weeks (months if we narrow it to EDU and JASO). Both EDU and JASO could be in my portfolio for many more months to come based on their fundamental and technical characteristics. This is in addition to the speculation lead-up to the Olympics in China.

JASO – 24.83, JA Solar Holdings is currently trading in the handle portion of a cup with handle base (one of the prime setups in the CANSLIM philosophy).

EDU – 80.08, New Oriental Education & Technology Group has come a long way since its correction down to the mid-$40 range. It closed above $80 on Friday and is now back within 15% of a new all-time high.

GU – 17.00, Gushan Environmental blasted 22.39% higher last week on above average volume as it closed at a new all time high.

TITN – 23.52, Titan Machinery is starting to flirt with all-time highs as volume is increasing during accumulation weeks

Filed Under: China, Portfolio, Stocks, Uncategorized

The Big Decline

May 7, 2008 by 17 Comments

I am a positive person by nature and I prefer to buy stocks going up but I am starting to see several leading stocks struggle to hold new highs or fail to challenge recent highs. These patterns are familiar and they are suggesting that the recent bounce is the final stage before a possible market decline. A perfect example can be the charts posted of DRYS yesterday.

Now, this big decline could take years to materialize so I don’t want to jump the gun and start yelling sell or short sell everything in sight. I trade to catch the mid to long term trends so time is on our side to determine what is happening.

  • I don’t need to call the tops and bottoms of moves
  • I just need to be able to identify the trend (if one exists) and then trade accordingly.
  • It’s a fairly easy method of investing and doesn’t require watching the market every hour of every day.
  • Trending markets are not very common to begin with but certain sectors, industries or markets are always forming some type of trend.

I will look to post up examples from former declining markets and will highlight what the charts looked like before those big declines.

Now, take a look at the charts of First Solar Inc. (FSLR). The market leader recently recorded new highs after the first correction since its IPO but it is now starting to churn. We have witnessed three consecutive weeks of churning action as the stock is not moving higher on above average volume.

I do admit that the overall trend is still higher but the red flags are starting to appear (with this stock and others).

[Read more…]

Filed Under: General Market, Selling, Stocks

DryShips (DRYS) Drying up?

May 6, 2008 by 15 Comments

Stock Snapshot
Dry Ships Inc. (DRYS) – $90.99
Both Blain and Rajin highlighted DryShips (DRYS) this past week as I linked to them in my weekend post but I am not so sure if I agree with their conclusions. Blain calls the stock breakout a beauty and Rajin grouped it in as a top weekend hold (actually he noted TBSI as his top hold).

Investor’s Business Daily placed DRYS at #8 on its IBD 100 which is fine but it raises suspicion because the stock didn’t even make the list the prior week. How can a stock go from not listed to #8 in one week? I have been a subscriber for almost 8 years but I have never understood or agreed with the way IBD mysteriously manages the IBD 100. DRYS could have only been at 101 at best so I just don’t understand how it jumps to #8.

Anyway, to my point: the IBD 100 has become more of a bandwagon list rather than a guide towards trending stocks. More specifically, they are usually late or on the tail end of trends for stocks that have already established runs (in my opinion based on reading the paper). Will DRYS prove them later again?

In any event, here are some amazing fundamental numbers for DryShips:
35% annual EPS growth
484% EPS growth last Quarter
2,064% EPS growth two Quarters ago
195% Sales growth last quarter
46% Return on Equity
Next Earnings Due: 5/29/08

So what do I see?
I see a decent consolidation over the past few months but I have a problem with the current pattern that is forming if it does not test former highs near $130. Volume is increasing as it moves higher but the stock is starting to struggle near the last peak of $88.

In addition to the basic weekly chart, I see the 30-week moving average starting to turn-over and point south for the first time in years. This does not mean that the stock can’t move higher and reverse the course of that average but the odds are starting to suggest otherwise.

All in all – I am not a buyer of the stock at this level. It may be a solid short term buy for traders that make these types of plays such as Blain and Rajin but it does not fit into my criteria for a trend trading opportunity. A challenge of new highs or a push into new high territory will change my perspective of the stock.

Let’s see where it goes. What do you think and in what time frame?

Filed Under: Stocks
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