ParkTwain's Parlor

[b_cadvantag]

Park,

Hope everything is ok or that you are on vacation.

Miss reading your posts...


Tag

[IIC]

Yeah...where are you Park???

[Gatorman]

Did you have a change of heart out there in Vegas and are concentrating on Roulette rather than stocks?

[ParkTwain]

I have been out of the market for the last couple of months, due to other things taking up my time. I have finally spent a little time tonight looking at a few charts based ONLY on today's list of new 52-week highs. Here are a few ideas for candidates for new long positions based on all-time high breakout scenarios.

----------------------------------------------------------
(data as of 4/27/2006 market close)
(* = bending my own rules a bit to consider this stock)


BUY NOW Candidates - very recent all-time high brkout on HIGH VOLUME (brkout date)

ASX (4/27/06) New news re Taiwan's legalization of Taiwanese chip
companies building plants in mainland China
BAC (4/27/06)
CB (4/25/06)
CHH (4/26/06)
CSGP (4/27/06)
DP (4/27/06)
NGA* (4/27/06)
SCL* (4/27/06)
SYM (4/27/06)
TMK (4/27/06)
WFC (4/27/06)
WOOF (4/27/06)



Within 10% ABOVE prev ATH of at least 30 calendar days ago
(these should be relatively safe to buy and hold for
about a 10% gain over some number of weeks)

AMP, AP
BWP
CE, CELL, CHKE, CLX, CSR
DKS, DLLR
FD, FLA
IBI, IFS
MANT, MYE
NSR
PBG, PFWD
SIAL, SPSX
TOO
UACL*, UPCS
ZVXI


WATCH LIST, within 5% BELOW prev ATH of at least 30 calendar days ago
(be prepared for an upcoming breakout scenario
for these stocks)

ATAC
BBW
CL
DTV
GMT
IIVI
JILL
LTD
SUMT*
UTK

[ParkTwain]

Here is a copy of a note ("my approach to stock speculation") that I recently sent to a new online acquaintance:

------------------------------------------------------------------------

I operate in the stock market only (no options or other).
I am interested only in "price breakout setups" (and
follow-throughs from breakouts) involving a stock
making an all-time high price. That is, I'm less
interested in the company's fundamental business
activities than in how its stock is behaving compared
with its own past history. I have been interested
in finding HIGH PROBABILITY scenarios for stock price
gains -- that is, where there is a >50% chance of
at least 15% gain in about 3 weeks. I have had good
results in the past couple of years (when I have had
the time to devote to developing my ideas) by using
the following approach.

At the end of each day's market activity, I look for
all stocks making a new 52-week high and that have
at least a certain minimum RSI (a particular technical
indicator of a stock's strength versus its own past
history) reading. I can get this list at this website:

http://www2.barchart.com/high.asp?=&sort=8&what=ALL&force=high%2easp

For each stock on this list with an RSI of at least 65,
I examine the long-term stock chart to see whether
today's price is also a new all-time high, or is near
(whether about 10% above or below) that stock's all-time
high price. If today's price represents a jump just
above its previous all-time high, then that stock
becomes a candidate for me to buy in the near future
(depending on its behavior over the next few market
sessions). If today's price is just below that
stock's all-time high, then I add it to a "watch list"
in anticipation of the day when it will in fact
"breakout" beyond the all-time high price. If today's
price is just above (but no more than about 5%) that
stock's all-time high, then I will also consider
buying it, if certain additional technical indicators
are presently favorable.

When I buy a stock under these circumstances, I am
looking for a 10% to 20% gain in a matter of a few
weeks. If the overall market is bullish, this gain
can happen pretty quickly. I will carry up to
4 or 5 positions at one time.

The main sources of ideas that have influenced my
present thinking are:

* How I Made $2 Million in the Stock Market, by Nicolas Darvas

This book is about how a novice in the stock market
(1950s and 1960s) figured out how to watch for price
moves out of an established price range as being the
key to identifying a stock that will make a significant
run-up in price.

* How Charts Can Help You in the Stock Market, by William Jiler

This book is a set of lessons about various kinds of
important patterns that one can observe in a daily
stock chart.

Each of these books emphasizes the importance of
recognizing patterns of price, previously established
price ranges, and high-volume price moves above or below
an established price range.

You can observe for yourself, among any large set of
stock price charts that you want to view, that after
a stock's price surpasses its own all-time high,
that the rate of price appreciation noticeably changes
to the upside. You can look for this situation
without any close knowledge of the business that the
company is in, etc. For additional safety in making
selections, one can also consider the strength of the
company's industry, the stock's price/earnings ratio,
the stock's price/earnings ratio to earnings growth
rate ratio, etc.

I won't consider trading a stock whose price per share
is below $5.00 or whose average daily volume is less
than 50,000 shares traded per day.

I like to use the charting features of this web site:

http://tinyurl.com/m9397

//PT

[IIC]

Welcome back...Doug

[diogenes]

Good to hear from you Park.

[ParkTwain]

Dan Zanger, record-setting trader

"My Stocks Are Up 10,000%!"

What a story, from the bubble era.

http://www.investopedia.com/articles/trading/04/082504.asp

More about Dan Zanger's trading approach:

http://technicalanalysis.org.uk/chart-patterns/Blac03.pdf

[ParkTwain]

This is a very interesting post (not authored by me) that is found in a thread of posts on the KKD discussion board at Yahoo.com. (Also read backwards in the same thread for other interesting posts from other board participants.) Part of the thread's discussion is about the institutions, mechanics, and business arrangements that assist large institutions willing to lend their shares for shorting by other institutions. This discussion confirms for me why I'm generally not so interested in "turnaround" plays of fallen stocks, even when the technical upside "headroom" depicts a worthwhile risk/return setup. Before concluding that a bounce from a significant and/or long-term downturn in a stock's price indicates the stock market's knowledge of a significant change the company's prospects, it seems that one must still be very well plugged into the company's fundamental operating situation in order to gauge the trustworthiness of the bounce (see also BEL, evidently).

http://tinyurl.com/g2yng

//
Thank you for your questions. They help me focus my thoughts. I track about twenty expensive to borrow stocks GRMN, OSTK, NFI, NYX, MSO, MDTL, SPWR, FFH, PPD, KKD and some others. In a more perfect world trading would favor the investor who knew most about the company fundamentals. I am long NFI and I noticed that its PPS dropped on good news.

I worked (as a technician) for more than twenty years on Wall Street so I figure at least I was close to the action.

I concluded that for some stocks there were other fundamentals that were more important than company fundamentals or sector fundamentals or whatever.

I believe that very few people would pay more than twenty percent per annum to borrow a stock for the purpose of shorting it. I can not really think of a "pure" motive to do this.

The "subscription based" site has a free section. Go to www.dataexplorers.co.uk, click on performanceexplorers, click on SUMMARY STATISTICS, register for free. Click on a month and scroll down to Equities by Fee.
It does not say how much the fee is but other sources have put them at as much as 40%.

Since the fee paid is split at least four ways and we are talking about millions, even billions of dollars there is incentive to do things that are not aboveboard. Like lend securities that do not in fact exist. Most recently THI was lent in a rather huge way. It is an IPO. Last month the most expensive stock to borrow was NYX, it, too is an IPO.

There is some question about where these shares come from.

Regulators (SEC, FRBNY, NASD) are looking into this. Their efforts are on the net at www.agencylending.capco.com. The miscreants cannot be hoist on their own petard until they have it (their petard) in place. It will not be in place until October first.

At that time, I believe, this type of manipulation will cease. Then stocks like this one will be squeezed. And some stocks with bad fundamentals will be squeezed earlier. So, I am leery of shorting these.
//

[IIC]

Park...your Tiny url doesn't work...Doug

[IIC]

Park...your Tiny url doesn't work...Doug

Nevermind...it works now

[ParkTwain]

Sixteen printed pages of 52-week highs today, which is much more than Friday. This is incredible.

http://www2.barchart.com/high.asp?=&sort=8&what=ALL&force=high%2easp

My powder is completely dry, so I'm probably back into the market this week after many weeks away. I am working my way through an immense list of candidates, using new highs data only from 5/1/2006 forward.

Watch out for Wednesday and the Fed.

As for "an immense list of candidates," here's the rough draft of candidates (i.e., results of a first pass among all US-domestic-only common stock issues above 5.00/sh with min 50K avg daily volume, on NYSE/AMEX/NASDAQ, with RSI >65, and making a new 52-week high, but almost always excluding banks, mining and gold-related, and REITs) as of yesterday's close, with the findings so far shown in alphabetical order:

//
** = pretty good-looking example, on first notice, of my preferred chart setup

ABK (imminent b/o), AFG, AHS (high ceiling), AIN, ALJ, ALV, ANEN,
AP (>10% over b/o), ARWR (imminent b/o), ASFI, ASGN (high ceiling),
ASX**, ATAC**

BAC** (b/o 4/27), BGC (20% over b/o), BIO (b/o 5/5),
BOKF (imminent b/o, bank), BRK (b/o 5/5), BWA, BWLD

CACC (imminent b/o), CALD (high ceiling), CAM, CAS (>10% over b/o),
CB (~10% over b/o), CFC (b/o 5/5), CL (imminent b/o),
CLHB** (b/o 5/4), CPF (bank, Hawaii), CSH (>10% over b/o),
CTR, CTRN, CVA

DCTH, DIL, DJO (>10% over b/o), DKS, DLB (imminent b/o), DRH,
DST (high ceiling), DTV (imminent b/o)

EAGL** (b/o 5/4)

FCL, FCS (high ceiling), FLOW, FORR (high ceiling),
FSH (>10% over b/o)

GAIA (imminent b/o), GGI, GISX, GFF**,
GFIG (b/o 5/5, watch retest), GMT (imminent b/o), GMTC,
GPRO (b/o 5/4), GYMB (imminent b/o)

HAFC (bank), HCR, HLF, HPY** (b/o 5/5), HRZ**

IART, ICON**, IFIN (immiment b/o), IHR, IIVI (imminent b/o),
ISNS** (5/8 b/o), ITRI, ITW

KAI (b/o 5/4), KNOL (imminent b/o), KSU (high ceiling)
LCUT, LRCX (imminent b/o), LTBG, LTD (imminent b/o)

MANT** (nat'l sec), MAR (<10% over b/o), MEA (WATCH!),
MEAS (imminent b/o), MGA (imminent b/o), MMM (imminent b/o),
MOG.A, MSSR, MTSC (>10% over b/o), MYGN (high ceiling)

NC, NGA**, NKTR (high ceiling), NPO, NRF** (REIT), NSR
OGE**, OIS, OPEN**, OVTI

PBG (P/E: 17), PFG, PKE (high ceiling), PLL, PSPT** (b/o 5/5),
PTSI**, PTV** (b/o 5/5), PVH, PWR (high ceiling)

QSFT (high ceiling)
R (imminent b/o), REM, RENT (low avg vol), RHI, RMKR** (watch!)

SBUX (>10% over b/o), SCS (high ceiling), SCVL, SHFL (high D/E),
SMDI** (high ceiling), SMXC (high ceiling), SPSS**, STKL,
STT, SWFT**, SYM (low avg daily vol)

TAL** (IPO), TGE, TGI** (b/o 5/5, aircraft parts), THE,
TMK (insurance), TMO (imminent b/o), TNB (imminent b/o), TOO,
TSAI (imminent b/o), TUNE (high ceiling), TWGP (low PEG)

UACL, UCTT, UEIC (high ceiling, tech wave and product trends),
UNT, URI

VSAT, VTNC (low avg daily vol?)
WG, WGR, WMI (high ceiling), WTI (10% over b/o)
//

GATORMAN, please tell me what you think of this list so far.

[ParkTwain]

This morning, buying RTI, GFF, preparing to pull the trigger on SMDI, PTV, and WTS.

[ParkTwain]

RTI is burning the flesh on the palms of my hands this morning.

[ParkTwain]

Not much chat around here about the aerospace stocks, including the titanium-wonder stocks. I got some RTI this morning just before it really took off. Check its news. Could get most of a double in this stock in another 4 months. I may buy some LMIA next.