ParkTwain's Parlor

[ParkTwain]

Took about 10% profit closing out RTI this morning. Entered LMIA long after yesterday's breakout.

[ParkTwain]

After a couple of days of big market drops, there is some concern out there right now; see Runner's new "long or short" poll. The market has been acting very well for the last several weeks, so a new correction is not unexpected as far as that goes. However, we can't yet conclude there is unusual strength in the new downturn. There are also the possibilities that (1) any retracement in oil prices and (2) increase in market sentiment that Fed rate hikes could be paused for a month or two could give the bulls a new charge of electricity.

In a time of possible transition from bull to bear sentiment, I have had some success in the past in finding stocks that have been strengthening yet for whatever reasons remain below the market's publicity radar. Are there stocks out there right now whose strength seems to be divorced from the sources of the market's recent momentum?

There were several decent-looking stocks making new 52-week highs (* = all-time high) even on Friday, which was a second consecutive big down day for the overall market.

ACTS* - China chip maker, rumored supplanting PortalPlayer as iPod supplier
AEHR - flash memory chip package test equip, raised earnings guidance, but low daily volume
AMSF* - rising profits, low daily volume, small/growing workers comp insurer
ARJ* - rising profits, anti-microbial chemical co.
FLA* - profit jump, commercial real estate and railroads (strong sector) in Fla.
JTX* - raised earnings guidance, franchise tax prep service
LNDC - corn play (ethanol momentum?), increasing volume trend
SAFT* - raised earnings guidance, insurance
SMXC - low daily volume but rising profits, trucking co. (strong sector)
TGI* - aircraft parts (hot sector), doubled qtr's profits, pumped by Cramer

[diogenes]

I like AEHR.

Elder Bull is greater than the previous day’s value (good sign) and the Elder “Market Thermometer” is below the 13 EMA, which is a buy signal according to the Elder system.

The fun part:

The exponential/ Regression relative strength model I have been playing with when set to 3 standard deviations below the mean gives a really nice score.
So it should be a "safe" play and with the buy signal might be a very nice one.

[DSteckler]

AEHR is completing a large cup on the weekly chart.

[ParkTwain]

Doubled up in LMIA this morning. Opened small long position in SBUX.

[dmk112]

Parktwain, SBUX looks bearish to me, why did you take the long?

[ParkTwain]

Granted, this is definitely not my preferred play or setup. I have been watching SBUX since its breakout above about 32/sh. I see that in early March 2006 good support was put in at about 35/sh after that breakout. I missed the dip that happened before the current retracement because it didn't get down quite close enough to 35/sh at that time. This time it has. I might be premature, but I think that there is great pent-up bullish energy for this stock. I see the shares being in an uptrend for the foreseeable future because of the company's impressive growth in store openings along with sales and cross-sales successes in existing stores. Yesterday's intraday turnaround was enough to get me into the market. So this is about 55% a fundamentals play and 45% a technical play. I will add to it as she rises if I am right. I didn't make a big bet at this time.

Of course, JSDA, sold in every SBUX store, has got the killer chart right now. Looking for a good entry there as well.

[ParkTwain]

LNDC has been behaving very well this week in an overall down market. Couldn't resist taking a new long position this morning. This one was listed in my post of a couple of days ago.

Also long GFF at 28.38 as of a couple of days ago.

[Runner]

I like SBUX and if 35 holds I think it has a chance at the 40 area. ParkTwain what you think of SBUX action?

[diogenes]

Parktwain, SBUX looks bearish to me, why did you take the long?

The Wagner Weekly has SBUX as a short.
From the free weekly newletter they send out:

"# Industry - Restaurants
# Side - Short
# Stalking since - May 17
# Timeframe - 5 to 10 days (swing trade)
# Trigger - 35.84
# Target - 32.60
# Stop - 37.94"

Edit: A bit more info from the above:

"# Notes -

o SBUX has dropped almost 15% after setting a new 52-week high on May 5.
o These failed breakout attempts often lead to steep drops, trapping those who bought near the highs.
o The 50-day moving average is now above and should provide resistance.
o Our short entry is below yesterday's low minus some wiggle room.
o The buy stop is placed above the 50-day m.a. (about 1.5 ATR's from our entry)
o Trade expectations - We are looking for a quick drop to 32-33 area."

I think skiracer has the pay subscription to the site. So, there be more information about the trade.

[Runner]

I was thinking long over 36.50 but who knows..

[ParkTwain]

Maybe the near-term short swing trade is the better trade. I had been looking at the basing at about 35.00/sh going up to March 13 as the currently operative support. That basing took place over 5 or so sessions. A new short position at a trigger of 35.84 (transgressed 2 days ago), according to the site recommendation that was posted, would be a loss position as of today. (I would have estimated the trigger to be a bit lower.) It bounced Monday at 35.50/sh, and it bounced earlier today at 36/sh. We'll see how it behaves at 36/sh again perhaps before EOD today. I am long at 36.68, so, Runner, I was already thinking like you.

Some technical indicators for SBUX today point to more downside expected, but full stochs show a bounce underway. But I have been anticipating that the overall market will bounce back up, which is a different kind of assessment and of course could be mistaken. But notice that the leading economic indicators fell (not expected) last month, as reported today. This would be good for today's market, is my understanding, as it lessens the Fed's drive to keep raising rates.

As for non-technical feelings about this stock, I have noticed that I shouldn't underestimate SBUX management and their ability to grow revs from existing stores. For instance, they will be installing music downloading stations in stores going forward.

[rivercitydan]

Sbux

I think I heard the last bubble!

Starbux is headed for the bottom.

[skiracer]

The Wagner Weekly has SBUX as a short.
From the free weekly newletter they send out:

"# Industry - Restaurants
# Side - Short
# Stalking since - May 17
# Timeframe - 5 to 10 days (swing trade)
# Trigger - 35.84
# Target - 32.60
# Stop - 37.94"

Edit: A bit more info from the above:

"# Notes -

o SBUX has dropped almost 15% after setting a new 52-week high on May 5.
o These failed breakout attempts often lead to steep drops, trapping those who bought near the highs.
o The 50-day moving average is now above and should provide resistance.
o Our short entry is below yesterday's low minus some wiggle room.
o The buy stop is placed above the 50-day m.a. (about 1.5 ATR's from our entry)
o Trade expectations - We are looking for a quick drop to 32-33 area."

I think skiracer has the pay subscription to the site. So, there be more information about the trade.

Only if you pay for it.

[ParkTwain]

I love it when TA specialists state confidently that a 50DMA will provide resistance (or support). Not if there wer never any significant previous actual transactions at that price! The DMA is a statistic. It can at best *imply* that a point or range of support or resistance *might* exist. But that implication can be misleading. To remedy, just *look at the price-volume chart*! You can see where the actual volume took place. A statistic does not have a memory of a previous buy or sell transaction!