Daily Screen for Wednesday 9-12-07
It was a strong day for the young growth stocks of the market. Some of the same stocks will continuously make my daily screens but that is the point as they are clearly the leaders. These are the stocks you want to buy, riding higher instead of bottom feeding on the garbage.
My highlight stock is Baidu.com (BIDU) as it made another new all-time high and is up 119% on the blog since late April. Stocks making new highs typically go on to make higher highs. It’s such a simple rule and a very profitable system during strong markets but the majority of people prefer buying stocks making new lows. I’ll never understand some people (consistent losers) as the entire CANSLIM philosophy made sense since the first day I read about it on the Jersey shore almost 10 years ago.
Highlight Stock: Making New Highs:
- (BIDU) – 227.04, Baidu.com was first highlighted in a big way on April 25, 2007 in Baidu.com (BIDU) buy Opportunity and BIDU Stock Analysis. BIDU was trading at $103.50 with a short term target of $118 and a higher target of $130+. Recent buy opportunities have appeared above $170 or at the 50-d m.a.
Interesting Stocks: Recent IPOs Making a Move:
- (TSL) – 49.99, Trina Solar had a great run earlier in the year but is currently correcting from its all-time high. Support holds above $38 which is also the ideal entry area on pullbacks. The higher peak highs and higher valley lows are encouraging. A recovery of the 50-d m.a. is also a short term entry signal.
- (CMG) – 103.63, Chipotle is within striking distance of a new all-time high as it continues to ride along the 50-d m.a. Watch the gap-up near $90 as this will be the consolidation area if the stock breaks lower.
- (MA) – 132.17, Mastercard is correcting and touching the 200-d m.a. for the first time since the line formed. As one of my big winners this year in my own portfolio, I still consider it a watch if it can hold the long term moving average support. Please note that I took down my position in July at precisely the correct point as noted here: Taking Partial Profits
- (CPLA) – 50.62, I never performed a case study on the stock but I should have several times as it has clearly been a winner since the start of the New Year. Short term entries can be made at or slightly below the 50-d m.a. with tight stops
- (SNCR) – 36.09, Synchronoss was up 4.22% today and 12.71% for the week on above average volume.
- (EHTH) – 24.69, up 5.31% since I posted the breakout on yesterday’s daily screen. The stock is up 11.47% on above average volume and heading towards new all-time highs. The pivot point was $22.60.
- (GTLS) – 28.85, continuing to build the nine week cup shaped pattern as it recovered the 50-d m.a. this week. Large support sits below $25 on the P&F chart
- (EDU) – 55.72, New Oriental is moving higher with short term support above the 50-d m.a. while trading within $4 of all-time highs.
- (VE) – 77.11, Veolia is currently correcting consolidating and trading along the 200-d m.a. while offering a solid buying opportunity (risk-to-reward). *Not an IPO stock*
Detailed descriptions of each screen can be found through this link:
Fundamental Screens and Scans
This is NOT a buy list, please buy and sell at your own risk!
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BIDU has been a great trade and still looks quite strong considering the nice volume it has had on the days it makes new highs. Love the pattern of lower volume on down days and strong volume on up days.
BIDU is a strong market leader…nuff said great stock. We won’t see a correction with BIDU continuing to hit highs.
Around the investment blogging world…
Today I want to start what a series that I will call "Around the investment blogging world." In these posts I will link to some posts from other investing blogs that are worthy of GrowYourFunds readers attention. It will be my……
Hi Chris,
I have a question about the MA reversal that you pointed out in the chart. I haven’t really studied Candlesticks yet to see further behind their meaning, but after looking up that candlestick, I suppose it classifies as a Shooting Star that would indicate reversal from an uptrend movement?
Reference Shooting Star Example Chart:
http://stockcharts.com/school/data/media/chart_school/chart_analysis/candlestick_bearish_reversal_patterns/bearrev2-shoot-chv.png
Was there anything also in the volume that warned you to take 1/2 of your position down? a combination or the pattern alone? I am intrigued by your call on this and would like to know more.
Thanks,
Steven Mac
Chris,
I would like to add on to my previous post - is there a particular reason why you didn’t take the position down when the pattern was down trending between 155 and 160?
Thanks,
Steven Mac
Steven,
The answers are in my post from July: http://www.chrisperruna.com/2007/07/19/taking-partial-profits/
The market was weakening, the NH-NL ratio was falling fast and it was the middle of the summer. All the forces told me to cash in so I did and I wasn’t looking for new trades. I knew these stocks had to correct and my bread and butter is the 200d- m.a. so I figured I would wait. I am up over 56% for the year so I don’t need to be greedy.
I took down half my position a few days after the reversal because of the information my screens were giving me at the time. It was a weak market and the NH-NL ratio was pathetic. Volume did play a big part as the stock reversed on larger volume (this clearly showed sellers had the upper hand).
I happened to get out at the top for MA but that wasn’t the case for BIDU. But it doesn’t matter, I far exceeded my objectives and I left with a handsome profit. I never look to get out at the top, sometimes you just get lucky with your timing.
Thanks Chris - going to give this all a good read! Learning a lot here!
If I may ask one more question about the MA gap, I think you said that always a gap will fill - could be months or up to a year. Can you explain to me why these gaps must fill? or what triggers them to be filled? What makes them repeatable events as with AU in August or on your ROCM Post from July 17th (Support and Resistance) that showed ROCM had an unfilled gap in March?
My sincere thanks for your time!
Steven Mac
I bought BIDU either the day of or the day after you highlighted it (it was a Thursday), and then it gapped up 15% the next day for me.
I decided to hold onto it through the recent market correction but did sell half of my position when I was up around 75%. Truth be told, while I am thankful for you, Chris, for pointing out the stock to me in the first place, I feel pretty good for holding onto it when you first mentioned you were selling.
I know, I know, I shouldn’t gloat because things can change… but today, at least (when the stock is performing well), I’d like to enjoy the moment!
That’s great news Terry. I sold for several reasons and made the right decision when looking back. Riding the “full” trend is very difficult but over time it becomes easier to stay on board. BIDU is a true home run with a high R return.
Steven,
Gaps don’t always fill but many of them do fill. Nothing is guaranteed. It’s just human trading nature to push for a gap fill (supply and demand). I don’t have a better answer for you.
[...] – 63.18, Capella Education; I bough this stock as a rebound play upon returning from my trip in Mexico. I highlighted it as a [...]