ParkTwain's Parlor

[ParkTwain]

I posted the following tonight on a couple of the Yahoo stock chat boards.

=========================================

Today I bought two other stocks (NWRE and LMIA) that are breaking out to new all-time highs, in addition to BPFH.

Here is a nice list of stocks (product of my own research) each of which (in my opinion) is presently (that is, as of 11/16/05 end of trading) facing an imminent breakout to an all-time high. Buying such breakouts is the best way I know to make above-average gains in the near term while also benefitting from built-in downside protection. Some breakouts to an all-time high continue on for MONTHS, especially in a bull market.

Watch for trading volume far above the stock's average daily volume and BUY the BREAKOUT.

For a primer on this general approach, see "How I Made $2M in the Stock Market" by Nicolas Darvas, first published in 1960, available at Amazon.com. Read it over the T'giving holidays, and you will be a lot smarter when you next enter the stock market.

For a straightforward presentation about reading the significant indicators (primarily price and volume movements) on stock charts, see "How Charts Can Help You in the Stock Market" by William L. Jiler.

You master these two sets of material, with no additional technical analysis training necessary, and you won't need Wall Street analysts and research any more, and you will laugh at CNBC for the rest of your life (while still watching it for its information value about how Wall Street is steering the sentiment of the retail investor).


Stocks facing imminent breakout to an all-time high
(as of 11/16/05 e.o.t.)

AC, ACR, ANN, AOS, ATPG
BABY, BTUI
DADE
ESV
FCN, FLS
HIBB
IDSY, IMGC, ISE, IVX
JCOM, JOSB, JWN
LKQX
MCRS, MET, MPG, MRVL
NHRX
PG
RDN
SAM, SMTS, SPLS, STGS, SWWC
THQI, TNM
UNP
VTIV

(This list does not include stocks of banks, REITs, or foreign-based companies and does not include stocks whose 30-day moving average daily volume, as reported by Yahoo Finance, is less than 50K shs.)

[ParkTwain]

Ed Seykota: "Win or lose, everyone gets what they want from the market. Some people like to lose, so they win by losing money."


Ed Seykota: "The feelings you are unwilling to experience are your real trading system."

[ParkTwain]

R. Donchian's trading principles, great stuff:

http://www.seykota.com/tribe/Resources/Donchian/index.htm

[RL]

Like I said the other day sure glad to hear from you. Hope you post often and be nice If you joined the POTW contest. Have a good day

[Lyehopper]

ParkTwain.... I second Ray's invitation!

Like I said the other day sure glad to hear from you. Hope you post often and be nice If you joined the POTW contest. Have a good day

GOOD JOB recruting Ray!.... Just came to this thread to invite him to participate! You are fast dude!

I own LMIA's stock too... Very well managed custom CNC machining/Fab shop.

http://www.lmiaerospace.com/

[ParkTwain]

NWRE, LMIA, and OXPS each +7% today. feelin' good!

[Lyehopper]

NWRE, LMIA, and OXPS each +7% today. feelin' good!

Why didn't you play one in the contest Park?

[ParkTwain]

Took +17% profit (7-day hold) in NWRE today. Stock just resumed some strengthening. Will probably continue higher.

[ParkTwain]

Lye,

1. I have been fully invested for several market days and haven't updated my research since then to make a pick.

2. OXPS (my POTW pick last week) jumped yesterday, but only a few days late!

[Lyehopper]

Lye,

1. I have been fully invested for several market days and haven't updated my research since then to make a pick.

2. OXPS jumped, but only a few days late!

I noticed OXPS.... One week late.lol

You have some good picks dude.

Hey there's always next week! right?

[ParkTwain]

My favorite (free) data site to start my screen for new position trade candidates.

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

(List of new 52-wk highs sorted by RSI)

[ParkTwain]

Another little link that spits out today's most volatile (alpha):

http://www.trade-ideas.com/StockInfo/high_percent_volatility.html

[ParkTwain]

BRCM near significant resistance. Watch for a break above $50/sh on well above average volume.

http://finance.yahoo.com/q/bc?s=BRCM&t=5y&l=on&z=m&q=l&c=

On this 5-year chart, notice the next level of resistance above $50/sh.

The SOXX has been showing relative strength recently. Only two stocks on that index (FSL-B and MRVL) are in blue-sky territory, with both BRCM and NSM nearing significant resistance points.

[ParkTwain]

No discussion on these forums of the recent disaster in SFCC. There was a set of negative articles about drug testing companies such as SFCC that caused the stock to plummet all through November. There was a climax sell-off last Thurs. The stock rebounded by 19% on Fri. This prompted some discussion on the Yahoo boards of short hedge fund "hatchet" operations, tells of same in the put options, and the use of naked short selling (Reg SHO, OSTK's Patrick Byrne's current crusade, etc.).

[ParkTwain]

Expect some movement up in OXPS for the rest on this week.

//PT

IBD Top 100 feature article 12/6/2005

found here:

http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1609535817&tid=oxps&sid=1609535817&mid=1093

//
OptionsXpress (OXPS) got its start five years ago with a simple mission: to build a user-friendly online brokerage platform for folks who manage their own options investment decisions.

To get there, the Chicago-based company built a platform featuring a variety of tools designed to help investors learn and develop trading strategies.

Though OptionsXpress also offers trading in stocks, bonds, futures and mutual funds, options account for about 75% of its daily trades.

The company, which went public in January, has grown at a rapid clip. At the end of October it increased the number of accounts by 67% from the prior year to 152,400.

Annual earnings averaged 129% growth from 2003 to 2005. Revenue grew an average of 107% a year over the same period.

"This is a very focused, entrepreneurial management team, which has a deep understanding of this end market," said Joel Gomberg, an analyst with William Blair & Co., which has an investment banking relationship with OptionsXpress. "They have a very strong . . . user-friendly platform that appeals to the novice trader."

For example, by logging onto OptionsXpress.com, investors can access an evaluation tool, called StrategyScan, that's designed to help them transform a trading idea into a trade that can be executed.

StrategyScan identifies up to three trading opportunities based on the system's bullish, bearish or neutral opinion of a specific stock over a specified time frame.

The site also features educational tools such as online seminars, a strategy overview guide and tutorials. And investors get interactive, real-time views of account balances, profits, losses and buying power to make it easier to make informed investing decisions.

Competitive Edge

OptionsXpress faces some pretty tough competition for its services. Rivals include much larger firms such as Ameritrade (AMTD) and Charles Schwab. (SCH)

David Kalt, OptionsXpress' co-founder and chief executive, says his firm's educational and evaluation tools help differentiate it from rivals.

Meanwhile, investment trends work to OptionsXpress' advantage. Over the past 10 years, the U.S. options trading market has grown at a 22% compound annual rate, analyst Gomberg says. Last year the market was up more than 30%, he says, and this year it's been tracking at a 25% growth rate.

Kalt estimates that of the roughly 30 million online brokerage accounts, between 10% and 15% trade in options. That puts the market at between 3 million and 4 million investors who trade in options.

OptionsXpress holds only a small piece of that market, which is growing at a rapid pace, Kalt says.

"We still see a great growth opportunity," he said. "The part of the market that's (growing rapidly) is the individual investor, who is becoming more comfortable using options as a part of his investment strategy. That's our focus and where we continue to dominate."

Kalt sees opportunities for growing the options business overseas. Through its OptionsXpress Australia unit, investors Down Under can trade in the U.S. options market. In the next few months, OptionsXpress will launch in Singapore, Canada and Europe.

"We're not betting the ranch on international growth, but we (see it) as a complement to domestic growth," Kalt said.

Another potential growth area is futures trading. OptionsXpress began offering that in July. Its products include financial futures, metals futures and currency futures.

"The futures market is where the options market was five years ago," Kalt said. "At this point it's a growing market, but it's still considered the Wild West. We see more opportunities to pursue the futures (market) as (trading) becomes more electronic and retail oriented."

Futures trading makes sense for OptionsXpress, Gomberg says.

"It plays to their core competency of offering an alternative type of investment product," he said. "We're seeing an increasing acceptance and awareness of (derivative-related) products on the part of retail investor."

Financially, OptionsXpress is doing well on all fronts. Its third-quarter earnings more than doubled from the prior year to 20 cents a share. Revenue gained 70% to $33.6 million. Daily average revenue trades, or the total number of revenue-generating trades divided by the number of trading days, leapt 81% to 20,600.

Analysts polled by First Call see full-year earnings rising 36% to 75 cents a share, then moving up 32% to 99 cents in 2006.

"They only have (about) 150,000 accounts, (so) there's opportunity to grow," Gomberg said. "As long as they continue to add customers they'll do well over time.
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