Ticker Tape Digest

Wednesday - January 31, 2018

By Leo Fasciocco -- TTD

   Ticker Tape Digest presents its daily stock market report containing stocks to go long as Breakout Trades, Quick Trades, or Bargain Accumulation Trades.

  We also feature stocks under Significant Accumulation that are poised to breakout.

   The TTD report also contains stocks to short as  breakdown plays and as bargain (swing trade) shorts.

  Investors should  tend to try to go with a strategy that fits with the stock market's trend, unless there is a special situation play.

  TTD's Breakout Stocks - Long are most suitable for aggressive investors seeking ideal entry points into leading stocks, especially during bull markets. They can do extremely well in bull markets with gains of as much as several hundred percent.

 These stocks can also do extremely well during strong market rallies, or if they are in a industry group that is performing very well. They tend to have strong earnings outlooks and are near new-52 week, or all-time highs.

  TTD Quick Trade Stocks - Long These are leading issues that have pulled back in recent days, but could move higher soon. They are most suitable for Aggressive Investors willing to trade short term. These stocks will do extremely  well during market advances. They have about 74% win rate. During market rally sequences the win rate is even higher. The return is small 3% to 8% in just a few days.

 TTD's Bargain Buy Trades - Long - Long Term.  These are for conservative bullish Investors These long-term buys are ideally suited for entry into stocks on pull backs within overall up trend. These stocks can give a good return long-term especially during a bull market.

   TTD also presents Stocks To Sell or Sell Short. These issues are suitable for aggressive investors willing to take short positions both as trades or for longer-term plays. These stocks will do very well during bear markets or market pull backs.

  TTD's Bearish breakdown stocks to sell short. These issues have potential to fall sharply. They often show a technical breakdown and also some fundamental business problem such as weak earnings.  

 TTD's multi-media updates include a slide-show that presents charts and analysis at midsession. Some times TTD presents feature analysis on stocks and the market. TTD uses Windows Media Files. (WMV).

 TTD also presents a "Breakout Watch List" that is up dated daily. This list consists of key stocks in position to breakout. A close watch of this list can put you in the stock just as it breaks out. A good idea is to study the list and be ready to move into a stock quickly as it hits its breakpoint.

TTD often suggests using stop buy orders to enter. It is very important to buy a breakout stock as close as possible to the breakpoint. The idea is to get "elbow room" if the stock should follow through to the upside. This is very important in being successful in making big money with breakout stocks.

It is also essential to have a stop loss strategy for all stocks in which positions are taken. Not every stock will work as expected. It is important for investors to "police" their portfolios and avoid getting trapped in any bad positions.

 Quality rating of breakout  Two key factors: 1 - Stock near all-time high in price or near a 52-week high. 2 - earnings growth current year is strong. The ideal play is a stock with an Above Average Quality Rating. The stock is near a new high and will have strong earnings. TTD's other ratings are Average and Below Average.

   TTD also has  special feature sections on  Educational Tips on Investing.

   To email Mr. Leo Fasciocco  leo@tickertapedigest.com.   

   For service, email Beverly Owen owen@tickertapedigest.com. TTD’s Tel: 1-480-926-1680.

Wednesday - January 31, 2018

TTD's Breakout Stocks

  Stock Market Overview

Total Buy Breakouts so far today -  12

Quality of Breakouts -  Above Average

Stocks Screened - 12,234

Bull side -  Large list of breakouts with some interesting plays.  Aggressive bulls can be venturesome.

Stock market  -  Bullish. Major market averages remain bullish in all time zones. The market has lost its strong upside momentum. The market  now looks to be going into a consolidation.

Stock Market Momentum

(Daily is based on a moving average)

Ticker Tape Digest's

Timely Breakout Stocks From Tape Action - Wednesday

(The “breakout List” gives all stocks breaking out of a base of five weeks or more. These stocks have a good chance to trend higher. However, a stop should be used to avoid those that do not work. They are ranked according to percentage change and classified as leaders or other. (Trading strategy: One should buy breakout stocks at breakpoint by using market order or stop buy)All Timely Breakout Stocks From Tape Action Today )  

Today's Featured TTD Breakout Stock

Meritor Inc. (MTOR) - 27.28, up 3.28 - Breakpoint 27.06

Net Tops Estimates, TTD Targets 34 

    MTOR, based in Troy, Mich., makes truck components such as axles and brakes. Annual revenues: $3.2 billion. MTOR's stock breaks out Wednesday from an 18-week, cup-and-handle base.

  The move carries the stock near a 16-year high. It needs to top $27.96.

  MTOR's all-time high was set at 46.79 back in 1972.

  So far today, MTOR is trading a heavy 4.1 million shares, four times its average daily volume of 900,000 shares.

  The drive higher Wednesday was triggered when MTOR came in with better than expected earnings for the fiscal first quarter ending in December.

  The company came in with net of 62 cents a share topping the Street estimate of 46 cents a share.

  The stock gapped higher in the morning and then moved higher to clear its breakpoint line. (see 10-minute chart)

  The stock then spent the rest of the session holding just above the breakpoint line.  

  Tape Action

  MTOR's tape action shows the recent block trades.

  One can see the price for the blocks climbing from $24 in the prior session to as high as $27.56 Wednesday.  

 A key bullish trade came in the morning when a block of 43,737 shares crossed the tape at $25.88.

  That was up sharply from  the prior block at $24 on 25,905 shares late on Tuesday.

  After the NYSE close Wednesday, a block of 344,800 shares crossed the tape at $27.28.

  That came on an up tick from the prior trade a $27.27 on 389 shares.

  Business  

  MTOR supplies parts, integrated systems, modules and components to makers of commercial vehicles and to the aftermarket.

  MTOR' produces drivetrain systems, axles, braking and suspension systems, for medium- and heavy-duty trucks.

 They also supply parts for off-highway , military, construction, bus and coach, fire and emergency and other vehicles.  

Charts

  MTOR's 12-month performance chart shows the stock appreciating 82% versus a 22% gain for the stock market.

  Insiders were buyers earlier this year. The price was not disclosed. There was some straight buying later at $16.84

  They were sellers recently at $23 to $24 a share.

  MTOR's long-term chart shows the stock falling to a bear market low of 79 cents a share back in 2009 due to the bear market.

  The stock rallied to a peak of $22.64 by 2011. However, it fell back again to around $5 by 2012. Since then the stock has been working higher. Its all-time high is $46.79 set back in 1972.   

  MTOR's daily chart shows the stock climbing from $18 back in August to a peak near $27.

  The stock has put down a tight flat base and was well positioned to breakout at any time.

  However, it did not. It faded back to around $22. to $23.

  Now on Wednesday the stock gaps higher off its earnings report and breaks out.

  The move comes with a widening of the daily spread.

  MTOR's CCI momentum indicator is strongly bullish.

 Earnings Outlook

  MTOR reported net from operations for the fiscal first quarter of 62 cents topping the Street estimate of 46 cents a share.

  The results exclude non-recurring items.

 For fiscal 2018 ending in September, analysts expect net to be jump 34% to $2.51 a share from  the $1.88 the year before.

  The stock sells with a price-earnings ratio of just 10. That is attractive for value investors.

  Looking ahead to fiscal 2019 ending in September, analysts predict a 14%  gain in profits to $2.87 a share from  the anticipated $2.51 this fiscal year.

  Net for the fiscal second quarter ending in March  should leap 80% to 63 cents a share from 35 cents the year before.

  The highest estimate is at 66 cents a share.  

Strategy Opinion:  TTD is targeting MTOR for a move to $34 within the next few months.

  A protective stop can be placed near $25.30.. TTD rates MTOR a good intermediate-term play.

Suitability:  Average Bulls.

                           TTD's special research of  Stock's Prior Performance:  

Probability - Breakout Success -  Extremely Bullish. MTOR has scored some big gains off recent breakouts.

Probability - Earnings Response - Bullish. MTOR's stock moved higher 9 times after the past 14 earnings reports when there was a significant change.

Probability:  Seasonal Success -  Extremely Bullish.  MTOR has averaged a gain of 11.7%  in February the past five years and 0.1%  in March.

           Stock's Prior Performance After A Breakout

(In actual trading, entry and exit points could vary depending on broker execution.

Also, ideal are breakouts to a new 52-week high or better, perhaps all-time highs.)

  Stock's Long-term Chart

   Stock's Performance Chart with Quarterly Earnings Markers vs. S&P 500

Insider Buying in Green  - Insider Selling in Red

   Stock's Monthly Seasonal Performance Chart - Past 5 Years

Showing % Months UP and % Change

Charts of Selected Breakout Stocks

Ticker Tape Digest’s

Stocks To “Sell or Short”

Ticker Tape Digest’s Daily List of “Stocks To Sell or Sell Short” ranks stocks well timed to be sold immediately based on daily trading. The list can be used as an alert to reduce current long-term positions.

Shorts from tape action so far today - 8

Stocks Screened - 12,234

Long-Term Environment for bears:   Unfavorable.

Bear Side - Small list of breakdowns. Bears be selective. Stock market now appears to be going into consolidation.

List of Stocks To Sell or Short

TTD’s Feature Bear Play

United Therapeutics Corp. (UTHR) - 129, down 6.97

Net to drop 10% this year, TTD Sees Decline to 105

  UTHR, based in Silver Spring, Md., is a biotech firm. working on treatments for chronic and life-threatening conditions. Annual revenues: $1.6 billion. UTHR's stock falls sharply Wednesday and undercuts key technical support. TTD sees more on the downside.

  So far today, UTHR is trading 670,515 shares, almost double its average daily volume of 398,000 shares.

  UTHR's stock breaks to the downside from a head-and-shoulder pattern.

  The stock closes near its low for the day. That is bearish.

  Tape Action

  UTHR's tape action shows the recent block trades.

  One can see the price for the blocks falling from  $136.67 in the morning to as low as $129.

  A key bearish trade came around noon when a block of 28,900 shares crossed the tape at $132.22. That was down from the prior block trade at $135.59 on 2,236 shares.

  Business

  The company sells four commercial therapies in the U.S. to treat pulmonary arterial hypertension.,

  UTHR sells an oncology product in the U.S. called Unituxin Injection, which is approved to treat neuroblastoma.

  The company is also engaged in early-stage research on organ transplantation-related technologies.

   Earnings:

  This year, analysts are forecasting a 10% decline in net to $11.64 a share from the anticipated $12.96 for 2017.

  Net for the first quarter is expected to drop 17% to $3.21 a share from the $3.89 the year before.   

 Charts:   

  UTHR's daily chart shows the stock breaking down from  a head-shoulder-pattern.

  The 12-month performance chart shows the stock falling 20% versus a 22% gain for the stock market.

  Insiders have been heavy and consistent sellers at $127 to $139 a share. They were buyers using stock options at $30 to $94 a share.

Strategy Opinion: TTD is targeting UTHR for a decline to $105 a share within the next few months. A protective stop buy can be placed near $138.

Suitability: Average Bears.

  TTD's special probability research of  Prior Performance:  

Probability - Earnings Response - Bearish.  UTHR rose just 3 times after the past 11 earnings reports when there was a significant change.

Probability:  Seasonal Activity - Bearish.  UTHR declined an average of 0.5% in February the past five years and fell 3.3 in March.  

   Stock Performance Chart with Quarterly Earnings Markers vs. S&P 500

Insider Buying in Green  - Insider Selling in Red

   TTD takes no responsibility for trading by those using this information. The stocks presented in our report are those we deem the best looking "Day Trades" for the long side. We take no responsibility for the accuracy of this data, although every effort is made to present the information correctly. Copyright Ticker Tape Digest. - 2018

    TTD columnist Leo Fasciocco has covered the stock market for over 30 years. His articles appear in many publications. He has also been  a speaker at the Intershow conferences. He has been on television and radio. He is author of many educational articles about stock investing and the book “Guide To High-Performance Investing.”

   For information to subscribe to the Ticker Tape Digest Services call: Beverly Owen at 1-480-926-1680.

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 TTD Pro Report includes a Morning chart slide show of breakout stocks, a Midsession video-audio show with commentary on breakout stocks and shorts and a Final end of day overall report on breakout stocks for the session, short plays and accumulation plays.  There are other features too such as Quick Trades and Long-term Plays.  

TTD Daily Report is $39. It covers a Morning slide show of charts of stocks breaking out and a TTD end of day print report covering breakout stocks and shorts.

 Credit cards accepted. Payable to Corona Publishing Enterprises.

(The information contained has been prepared from data deemed reliable but there is no guarantee of complete accuracy. Ticker Tape Digest Inc. is not affiliated with any broker, dealer or investment advisor. Nothing in this publication constitutes an offer, recommendation or solicitation to buy or sell any securities. Further research is advised. This report is copyrighted and no redistribution is permitted with out permission.)