Opportunity Buffet Part 1 | stockbee

7/23/2007

Opportunity Buffet Part 1

It is a mixed market with 122 long and 88 short breakouts. Below the surface there is lot of weakness. Stocks after stocks which had rallied for months are having large one day down moves. When you look at the list in second part, you will notice this clearly. Stocks that have rallied in to earnings are breaking down on earnings.

Making a long term commitment on long side in such environment is a bit risky unless you find a stock with clear catalyst or a stock breaking out post earnings. This week there will be torrent of earnings and number of stocks are breaking out in anticipation of earnings. So before taking a position looking at earnings date is critical.

Merk (MRK) a Dow component is up 6.75% today on high volume. 4% plus breakouts are extremely rare on Dow component stocks and have a very high success rate if you hold them for a year or more after such breakout. It has had three 4%breakout in last year and half and gone up subsequent to them. So if you are looking for a large cap play, MRK might be worth a look. AMR corporation (AMR) is another large cap stock which had a 4% plus breakout today. It had six 4% breakouts in last 31/2 months while price is stuck in range near a pullback from a high in January 2007. Such clustered breakouts have a very high probability of precipitating a rally. So both MRK and AMR are worthwhile candidates to consider for long term play for large caps investors or for option traders.

Now lets look at rest of the list for opportunities.

Bullish IBD 70 plus EPS

There are 44 candidates in this scan today. On of the feature of the correction so far is IBD kind stocks continue to hold on to gains and some sectors like shipping are really hot and in runaway mode.

ACAP,Am Physicians (Google Yahoo Earnings Chart)
ACCL,Accelrys Inc (Google Yahoo Earnings Chart)
ACH,Aluminum Corp China (Google Yahoo Earnings Chart)
ATW,Atwood Oceanics Inc (Google Yahoo Earnings Chart)
CALM,Cal-Maine Foods Inc (Google Yahoo Earnings Chart)
CECE,Ceco Environmental Corp (Google Yahoo Earnings Chart)
CIEN,Ciena Corporation (Google Yahoo Earnings Chart)
CMED,China Medical Technologies Inc (Google Yahoo Earnings Chart)
CROX,Crocs Inc (Google Yahoo Earnings Chart)
DCI,Donaldson Co Inc (Google Yahoo Earnings Chart)
DO,Diamond Offshre Drilling (Google Yahoo Earnings Chart)
EDU,New Oriental Edu And Tech Corp (Google Yahoo Earnings Chart)
ENPT,En Pointe Technologies (Google Yahoo Earnings Chart)
ESV,Ensco International Inc (Google Yahoo Earnings Chart)
EXM,Excel Maritime Carriers (Google Yahoo Earnings Chart)
FUL,H.b. Fuller Co (Google Yahoo Earnings Chart)
GNTX,Gentex Corp (Google Yahoo Earnings Chart)
GSF,Globalsantafe Corp (Google Yahoo Earnings Chart)
GSH,Guangshen Railway Co (Google Yahoo Earnings Chart)
JBX,Jack In The Box Inc (Google Yahoo Earnings Chart)
JRJC,China Finance Online Co Ltd (Google Yahoo Earnings Chart)
JSDA,Jones Soda Co (Google Yahoo Earnings Chart)
LFC,China Life Insurance Company (Google Yahoo Earnings Chart)
MFLO,Moldflow Corporation (Google Yahoo Earnings Chart)
MFRI,Mfri Inc (Google Yahoo Earnings Chart)
NVT,Navteq Corp (Google Yahoo Earnings Chart)
PDE,Pride Internat Inc (Google Yahoo Earnings Chart)
PETS,PetMed Express Inc (Google Yahoo Earnings Chart)
PTI,Patni Computer Systems Ltd ADR (Google Yahoo Earnings Chart)
PTNR,Partner Communications (Google Yahoo Earnings Chart)
RBN,Robbins & Myers Inc (Google Yahoo Earnings Chart)
RIG,Transocean Inc (Google Yahoo Earnings Chart)
RIO,Companhia Vale Do Rio Doce (Google Yahoo Earnings Chart)
SNCR,Synchronoss Technologies Inc (Google Yahoo Earnings Chart)
SYNO,Synovis Life Tech Inc (Google Yahoo Earnings Chart)
TBSI,TBS International Limited Class A (Google Yahoo Earnings Chart)
TKC,Turkcell Iletisim Hizmetleri ADS (Google Yahoo Earnings Chart)
TSL,Trina Solar Ltd. (Google Yahoo Earnings Chart)
TSRA,Tessera Technologies Inc (Google Yahoo Earnings Chart)
TTPY,Tomotherapy Inc (Google Yahoo Earnings Chart)
UFCS,United Fire & Casualty (Google Yahoo Earnings Chart)
VII,Vicon Industries Inc (Google Yahoo Earnings Chart)
VSEC,Vse Corp (Google Yahoo Earnings Chart)
WCN,Waste Connections Inc (Google Yahoo Earnings Chart)

Out of these 44, around 27 stocks qualify for the 10% plus weakness. Out of those 27 , I have selected 11 based on their distance from 52 week or recent highs. The 11 stocks are GSH, JBX, WCN, MFLO, MFRI, FUL, ATW, PTI, CECE, PETS,and ACCL. Now to narrow this list further I would look at 1) recent two quarters earnings 2) margin 3) ROE 4) float 5) news catalyst 6) sector etc. Which basically is in line with IBD philosophy. That way the candidates can be reduced to 1 or 2 prime candidates or prioritized.

Bullish Double Trouble

There are 40 stocks in this scan today.

ACH,Aluminum Corp China (Google Yahoo Earnings Chart)
ANO,Anooraq Resources Corp (Google Yahoo Earnings Chart)
ASTE,Astec Industries (Google Yahoo Earnings Chart)
CAF,Morgan Stanley China A Share Fund` Inc (Google Yahoo Earnings Chart)
CALM,Cal-Maine Foods Inc (Google Yahoo Earnings Chart)
COR,Cortex Pharmaceuticals Inc (Google Yahoo Earnings Chart)
CROX,Crocs Inc (Google Yahoo Earnings Chart)
EDU,New Oriental Edu And Tech Corp (Google Yahoo Earnings Chart)
ESMC,Escalon Medical Corp (Google Yahoo Earnings Chart)
EXM,Excel Maritime Carriers (Google Yahoo Earnings Chart)
GGBM,Gigabeam Corp (Google Yahoo Earnings Chart)
GSH,Guangshen Railway Co (Google Yahoo Earnings Chart)
IAX,International Absorbents (Google Yahoo Earnings Chart)
IMMR,Immersion Corporation (Google Yahoo Earnings Chart)
IOSP,Innospec Inc (Google Yahoo Earnings Chart)
JRJC,China Finance Online Co Ltd (Google Yahoo Earnings Chart)
LFC,China Life Insurance Company (Google Yahoo Earnings Chart)
MF,MF Global Ltd (Google Yahoo Earnings Chart)
MFLO,Moldflow Corporation (Google Yahoo Earnings Chart)
MFRI,Mfri Inc (Google Yahoo Earnings Chart)
NM,Navios Maritime Holdings Inc (Google Yahoo Earnings Chart)
NVT,Navteq Corp (Google Yahoo Earnings Chart)
OPK,Opko Health Inc. (Google Yahoo Earnings Chart)
OPSW,Opsware Inc (Google Yahoo Earnings Chart)
PKX,Posco (Google Yahoo Earnings Chart)
PTEC,Phoenix Technologies Ltd (Google Yahoo Earnings Chart)
PTI,Patni Computer Systems Ltd ADR (Google Yahoo Earnings Chart)
PTNR,Partner Communications (Google Yahoo Earnings Chart)
RBN,Robbins & Myers Inc (Google Yahoo Earnings Chart)
RIO,Companhia Vale Do Rio Doce (Google Yahoo Earnings Chart)
SA,Seabridge Gold Inc (Google Yahoo Earnings Chart)
SCLD,Steelcloud Inc (Google Yahoo Earnings Chart)
SNCR,Synchronoss Technologies Inc (Google Yahoo Earnings Chart)
SRI,Stoneridge Inc (Google Yahoo Earnings Chart)
SYNO,Synovis Life Tech Inc (Google Yahoo Earnings Chart)
TBSI,TBS International Limited Class A (Google Yahoo Earnings Chart)
TSL,Trina Solar Ltd. (Google Yahoo Earnings Chart)
VII,Vicon Industries Inc (Google Yahoo Earnings Chart)
VSEC,Vse Corp (Google Yahoo Earnings Chart)
VSR,Versar Inc (Google Yahoo Earnings Chart)

Out of this 19 stocks have less than 10% growth:ANO CAF COR CROX EDU GGBM GSH IAX IOSP MF MFLO MFRI NVT OPK OPSW PTI PTNR SRI SYNO To narrow these down to 2 candidates I just sort them by 260 days growth and pick the one at top and one at bottom. OPK is up 1118% and SRI is up 105%. If you want more than two candidates, you can chose the next two at top and bottom.

Bullish Multi Year Leaders

There are 15 stocks in this scan. Out of that 6 stocks have less than 10% growth in month: OPK, PTNR, MFRI, ATW, IOSP, and RIG.All of them are buyable barring RIG, which is up on merger news.

Bullish Distressed Stock

There are 11 stocks in this scan today.

CORS,Corus Bankshares Inc (Google Yahoo Earnings Chart)
DEPO,Depomed Inc (Google Yahoo Earnings Chart)
DRL,Doral Financial Corp (Google Yahoo Earnings Chart)
MOVI,Movie Gallery Inc (Google Yahoo Earnings Chart)
NGEN,Nanogen Inc (Google Yahoo Earnings Chart)
OTD,O2 Diesel Corp (Google Yahoo Earnings Chart)
QFAB,Quaker Fabric Corp (Google Yahoo Earnings Chart)
SIR,Sirva Inc (Google Yahoo Earnings Chart)
SMMX,Symyx Technologies Inc (Google Yahoo Earnings Chart)
TMTA,Transmeta Corporation (Google Yahoo Earnings Chart)
TUES,Tuesday Morning Corp (Google Yahoo Earnings Chart)

Out of this CORS is the one I selected for further research.


Bullish Two Year IPO

29 IPO's in this scan as per Telechart data.

ANO,Anooraq Resources Corp (Google Yahoo Earnings Chart)
CAF,Morgan Stanley China A Share Fund` Inc (Google Yahoo Earnings Chart)
COR,Cortex Pharmaceuticals Inc (Google Yahoo Earnings Chart)
CROX,Crocs Inc (Google Yahoo Earnings Chart)
EDU,New Oriental Edu And Tech Corp (Google Yahoo Earnings Chart)
GGBM,Gigabeam Corp (Google Yahoo Earnings Chart)
GSH,Guangshen Railway Co (Google Yahoo Earnings Chart)
IAX,International Absorbents (Google Yahoo Earnings Chart)
IOSP,Innospec Inc (Google Yahoo Earnings Chart)
MF,MF Global Ltd (Google Yahoo Earnings Chart)
MFLO,Moldflow Corporation (Google Yahoo Earnings Chart)
MFRI,Mfri Inc (Google Yahoo Earnings Chart)
NVT,Navteq Corp (Google Yahoo Earnings Chart)
OPK,Opko Health Inc. (Google Yahoo Earnings Chart)
OPSW,Opsware Inc (Google Yahoo Earnings Chart)
PTI,Patni Computer Systems Ltd ADR (Google Yahoo Earnings Chart)
PTNR,Partner Communications (Google Yahoo Earnings Chart)
SRI,Stoneridge Inc (Google Yahoo Earnings Chart)
SYNO,Synovis Life Tech Inc (Google Yahoo Earnings Chart)

HBI out of this is what I would consider a possible buy. However it has poor IBD EPS ratings. So it is avoidable.

So that is the opportunity spread for today on the long side. The Episodic Pivot analysis is in the spreadsheet.

10 comments:

Tom said...

Maybe it would be interesting to post the winners/losers from the prior day's buffet?

If I have it correctly, these are today's results from Sunday's buffet list:

PP 15.00%
FOXH 11.04%
ISRG 4.75%
OMCL 4.59%
TPX 3.17%
REFR 1.67%
ANIK 0.99%
POSH -0.74%
SPSN -3.03%
PVG -7.01%
NCST -29.79%

I would be interesting to track these over time in a spreadsheet to see how they perform.

skytrader said...

This may have been covered to death already but when using charts for candidate selection can someone answer the following:

1. When looking at a stocks previous bullish 4% plus breakouts, how much weight should be given to the tendancy of it to breakout vs breakdown.

2. What are the ramifications of a stock rally beginning a few days before the bullish 4% plus breakouts.

3. Which setup is more likely to form a rally, the rally commencing slightly before the bullish 4% plus breakout signal or light breakdown/distribution (i.e red candlesticks) immediately before the bullish 4% plus breakout signal?

Pradeep Bonde said...

1 obviously breakout are preferred. Some stocks history tells you it is best to avid breakouts on them, because you can see the stock going nowhere after breakout.
2 I like weakness before breakout. A prior day narrow range or down day is preferable.
3 answered above

ivanhoff said...

Is there a website when we could compare the EPS growth of a company for the last 5-6 quarters? I know that IBD highlights any earnings' acceleration in relation to the previous quarter growth, but what if I need more precise information than just an arrow up and an arrow down? Is a company's income statement the only source for such info?

Pradeep Bonde said...

MSN moneycetral
Yahoo Finance
Returs
BusinessWeek

Andrey said...
This comment has been removed by the author.
Andrey said...

Ivanhoff: Try these links for the earnings history and surprises:

http://moneycentral.msn.com/investor/
invsub/analyst/earnest.asp

and

http://investing.businessweek.com/
research/stocks/earnings/
earnings.asp?symbol=FLI

In the second link, instead of FLI, put any stock symbol that you want to look at.

ivanhoff said...

Thanks. I checked all sources and for me Reuters provides the best summary

m31 said...

Hi PB, I learned a great deal from this blog. Today I encountered the worst day so far trading RBN. It was among the Bullish 70 EPS list. I wish it would keep rising, but I jumped in too early and did not stop loss in time. After I read your latest post, I think I need to be more careful and need more passion in trading :)

mgold said...

m31

One thing I can say, I have made mistakes but we all learn from them. I have learned much from Pradeep's blog. In ref to RBN....it did not have the 1 month weakness that Pradeep always mentions.