New Ideas 7-29-13

Looking at a combination of bottoming charts along with some under followed breakout possibilities.  Charts shown in this post:  AXDX, NSPR, MRIN, PAMT

Always use stops to protect your portfolio from big losses.

Watchlist for Friday 7-26-13

Here are a few new names that caught my attention recently.  Stocks mentioned in this post: DHT, ELOS,  CNDO,  BIOL

Always use stops to protect from big losses to your account.  Click on charts to enlarge.

Some New Ideas

After the sharp rise off the recent "V" bottom, this Fed induced market is more than due for some type of a pullback, or at least some sideways consolidation type action. 

That said, leading stocks like DDD and PRLB continue to set up in tight consolidations and look to go higher.  So despite the elevated level of the general indices,  individual names are constructive.

As mentioned in the last post, don't chase extended breakouts in this environment.  If you miss a proper buy point,  just move on as other entry points will develop.  As Wm. J. O'Neil has said in his books, "buying right makes selling so much easier."  How true.

And definitely don't be on significant margin at this point; play smaller and try to hit singles and doubles.  Once a market pullback occurs, better opportunities to be more aggressive should develop.

Here are some charts that have my attention.  Take the initial 8-10% move on a portion of your position, then trail the rest with a stop.  Don't be a hog.

CHCI is an interesting setup.  The Reston, VA based company builds a mix of single family homes, townhomes, condos, and apartment buildings. 

The 1st quarter earnings release back in May was very encouraging as sales were up dramatically, and management raised their full year sales expectations, also announcing they expect to be profitable for the full year.

For those interested, here's a link to that report.  

It has a high short position of 19% of the float, and the stock has been trading in an increasingly tight range for the last 9 weeks.  A move over $3 could send the stock higher.

Charts shown in this post:  CHCI, AUMN, XIN, USCR, FURX

ALWAYS use stops to protect your account from big losses.

Click on charts to enlarge view:

Review of Prior 3 Week's Setups

Since my last entry 3 weeks ago, the broad U.S. indices have seen a sharp rise out of yet another "V" shaped pattern, something we've seen several times during this ongoing 53 month (and counting) bull move.  The DJIA has advanced over 550 points while the S&P 500 has added nearly 85 points in the last 3 weeks.

Both indices made new all-time highs this past week, shrugging off sluggish earnings reports from MSFT and INTC.   And rates continue to rise as expectations of QE tapering by the Federal Reserve sometime this Fall are increasing.

With investor sentiment bullish and after such a strong move over the last 3 weeks, some traders are looking to go short in expectation of a pullback.  But my scan this weekend continues to produce actionable setups.

Now that being said, I'm not looking to chase what's been performing well.  (Actually, you NEVER want to chase anything in the markets.)  Rather, I'm looking at rotational setups of stocks that maybe haven't had a big run yet, and are displaying signs of accumulation.

Keep in mind the majority of setups I post on this blog are for skilled short term traders.  When you have a move like we've had over the last few weeks, in most cases you must nail down profit when it's there, then look for other setups to develop.

Here are some charts from that previous post with follow up charts, along with some stocks I mentioned on my Twitter stream over the last few weeks.

When the market complies, these various types of setups do work.  But don't expect these types of moves in individual stocks on a consistent basis.  When the general market makes a move like it has over the last 3 weeks, even a tyro can look like a genius.

Note:  From the last post, APP didn't trigger, and CVO did so poorly.  APP remains on watch while CVO is a dud.  Of the 3 stocks listed at the bottom of the post as scalp plays, all 3 triggered with MERU and TNAV performing the best.

Click on charts to enlarge: