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Aggressive Investor Bullish- Go To TTD Quick Trade Setups (win rate 70%) - Tuesday, February 2 |
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Go to Video Show - "How to Make Money With Breakout Stocks" Go to Video Show -TTD Performance 2008 Long and Short |
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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 trades. We also feature stocks under 
Significant Accumulation that are poised to breakout.
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Ticker Tape Digest's Trading Strategies Overview and Performance Bullish Aggressive Investors Bullish - "Breakout Stocks" - ideally suited for bull markets and special situation stocks. Potential for large returns. Aggressive Investor Bullish- "Quick Trade Stocks" -ideally suited for entry into top performing issues looking for a small quick profit." Conservative Investors "Bargain Buy Trades" (swing trades). Ideally suited for entry into stocks on pullbacks within overall up trend. Good for trading range markets Bearish Aggressive Bearish Investors - "Breakdown Stocks" to Sell Short. Ideally suited for bear markets or market pull backs. Potential for large returns Conservative Bearish Investors (swing traders). "Bargain Bearish Plays" to Sell Short. Ideally suited for trading range markets with overall market down trend. |
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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 These are for conservative bullish Investors The strategy is called swing trading. These long buys are ideally suited for entry into stocks on pull backs within overall up trend. They are good for trading range markets. These stocks can give a good return in a week or two. They can also explode into a breakout and a powerful advance.
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 Bearish bargain play stocks to sell short. These issues are usually in down trends and are poised to rollover after a minor rally. They often can provide a conservative bear with a good entry point.
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 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.
Stocks Screened - 8,200
Bull side - Breakouts pick up a bit. Stock market stages strong rebound to turn daily indicators bullish. There is now a clear indication that a trading range will develop with the major averages. February is still a historically bearish month.
(Put mouse on Dow chart to see Nasdaq chart)
Long Term Environment for bulls: Favorable
Market (Daily) - NYSE Bullish, Nasdaq Bullish
Market (Weekly) - NYSE Bearish, Nasdaq Bearish
Market (Monthly) - NYSE Bearish, Nasdaq Bearish
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TTD's Quality Rating of Stock - PEGA - ABOVE AVERAGE |
PEGA, based in Cambridge, Mas. produces software to automate business
processes. Annual revenues: $250 million. PEGA's stock reemerges from a four-month, double bottom or "W" base today. The stock is showing a good pickup in volume. So far today, PEGA is trading 371,924 shares, almost double its normal daily volume of 203,000 shares. 
PEGA's 5-minute chart shows the stock driving through its breakpoint strongly. It held over the breakpoint easily during the rest of the day.
TTD highlighted PEGA about two weeks ago as a stock to accumulate.
The company is expected to report at 107% surge in net for the fourth quarter. PEGA does have the potential to come in with a big upside earnings surprise. It did that back in May of last year and the stock surged.
PEGA is now showing a pick up in institutional buying. TTD's clip of the tape shows the recent big block trades. One can see the price for the blocks rising from $33.33 to $36.90.
Most impressive is the latest block of 4,000 shares that crossed at $36.90. That was up sharply from the prior block that wen off at $35.15. That shows some aggressive buying. 
PEGA's software enables firms to build, deploy, and change enterprise applications by capturing business objectives, automating programming, and automating work.
The Company's products include PegaRULES Process Commander and Pegasystems SmartBPM Suite and Solution Frameworks. The Company offers services and support through its professional services group, customer support group, and its training services group.
PEGA's 12-month performance chart shows the stock appreciating a big 160% compared with a 30% gain for the S&P 500. The stock is a small cap leader.
PEGA's long-term chart shows the stock near a multi-year high. It weathered the bear market well. Since late 2008, the stock has soared from 10 to 37. That spur was sparked by some big upside earnings surprises.
PEGA's daily chart shows a double bottom base, or a "W" base.
The late stages of the pattern shows a flat base. As part of the "W" base it would be considered the "handle."
The stock did attempt a breakout five sessions ago, but it faded back into the base with the stock market selloff..
The breakout today is good. It will be important to see PEGA follow through and for volume to pick up indicating good demand for the stock.
The stock's accumulation - distribution line (bottom of chart) is in a strong up trend. That shows there is good underlying buying going on in the stock.
PEGA will report fourth quarter net soon. The Street is forecasting a 107% surge to 17 cents a share from 8 cents a year ago. The highest estimate on the Street is at 23 cents a share. That means some see a big quarter. If so, the stock could run.
The past three quarters, PEGA surprised on the upside by topping the consensus estimate by 4 cents a share, 19 cents and 12 cents a share.
Net for 2009 is expected to surge 191% to 84 cents a share from 29 cents a year ago. The stock sells with a price-earnings ratio of 42 based on 2009 net.
Looking out to 2010, analysts forecast an 18% increase in net to $1 a share from the anticipated 84 cents a share.
Strategy Opinion: TTD is targeting PEGA for a move to 45. A protective stop can be placed near 35. TTD rates PEGA a good intermediate-term play with potential to surprise on the upside.
Sponsorship: Excellent. The largest fund holder is 5-star rated Fidelity Contrafund with a 2.8% stake. It was a recent buyer of 190,000 shares. The largest fund buyer recently was Fidelity OTC Fund, which purchased 498,828 shares. PEGA has 36.7 million shares outstanding.
Insider Activity: Slightly Bearish. Insider have been light buyers in recent months. The latest selling took pace around $34. Six analysts follow the stock and all 6 have a buy, up from 5 three months ago.
Stock Performance Chart for 12 months with Quarterly Earnings Markers.
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TTD's Breakout Profile Rating Pegasystems Inc. - (PEGA) |
| TTD Check List | Bullish | Bearish | Neutral |
| Near 52-week High | YES | ||
| Volume | YES | ||
| Tick Volume | YES | ||
| Price Trend - Daily | YES | ||
| Price Trend - Long Term | YES | ||
| Price Daily Spread | YES | ||
| Base Structure | YES | ||
| Base - A-D | YES | ||
| Earnings-Quarterly | YES | ||
| Earnings-Long Term | YES | ||
| Earnings Outlook | YES | ||
| Industry Group | YES | ||
| Prior Breakout Success | YES | ||
| Fund Sponsorship | YES | ||
| Total Score | 12 | 0 | 2 |
(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)
Charts of Selected Breakout Stocks
| TTD's Quality Rating of Stock - TLB - BELOW AVERAGE |
| TTD's Quality Rating of Stock - LXK - BELOW AVERAGE |
| TTD's Quality Rating of Stock - HEP - BELOW AVERAGE |
| TTD's Quality Rating of Stock - SHW - BELOW AVERAGE |
Ticker Tape Digest’s Daily List of “Stocks To 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 - 4
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Only a few breakdown stocks today as stock market continues to lift after recent selloff. Bears be alert.
(Trading strategy: These stocks can be sold short, or if held should be sold. If a stock is sold short, a protective stop buy should be placed. Short plays work best when the stock market is in a down trend.)
DST, based in Kansas City, Mo., provides information processing and computer software to primarily mutual funds and investment managers, and also to the telecom and healthcare industries. Annual revenues: $2.2 billion. DST's stock falls sharply today after the firm reported disappointing earnings for the fourth quarter. The selling is heavy. So far today, DST is trading 3.3 million shares, eight times its normal daily volume of 351,000 shares. 
DST came in with earnings of 92 cents a share for the fourth quarter, down from $1.41 a share a year ago.
The 92 cents was below the consensus Street estimate of $1.08 a share. Also, revenues for the quarter declined 1%. The company also announced plans to cut its workforce by 7%. to reduce costs.
The stock responded very bearishly to the weak earnings.
The stock fell sharply in the morning, was unable to rally and drifted lower the rest of the day.
TTD's clip of the tape shows some of the early action with block trades. One can see the price for the blocks dropping from $45 a few days ago to $41.50. The tape action shows clear heavy institutional selling pressure.
The company has two basic units Financial Services and Output Solutions. Financial Services revenues come from remote or full-service transfer agency or third-party administration product offerings that utilize DST's software.
The Output Solutions business gets its revenues from presentation and delivery either printed or electronic and archival of customer documents.
Currently, the Street has been forecasting an 8% rise in DST's earnings for 2010.
DST's chart shows the stock in a long basing pattern. Today, it "falls off the map." The selling is heavy indicating a flight to the doors.
Strategy Opinion: TTD is targeting DST for a decline to 33 within the next few months, or sooner. A protective stop buy can be placed near 42.
TTD columnist Leo Fasciocco has covered the stock market for over 20 years. His articles appear in many publications. He is also 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: B. J. Owen at 1-480-926-1680. Distributed by Corona Publishing Enterprises. Ticker Tape Digest Inc. P.O. Box 2044 Chandler, Az. 85244-2044. TTD “Professional Report” is available on the World Wide Web: $100 per month. Password needed. “TTD Professional“ Faxed is $200 per month. The TTD Daily Report is $39.95. Credit cards accepted.
(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. Some of the charts are from Telescan, Insight Trading, First Alert and other sources.)
