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By Leo Fasciocco -- TTD
Ticker Tape Digest presents its daily breakout and Short Selling report. It contains Breakout Stocks and Stocks under Significant Accumulation.Data is from tape action for the day. These stocks are most suitable for aggressive investors seeking ideal entry points for leading stocks.
These stocks will do very well during bull markets and strong market rallies.
TTD also presents Stocks To Sell or Sell Short.These issues are suitable for aggressive investors willing to take short positionsboth as trades or for longer-term plays. These stocks will do very well during bear markets or market corrections
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Total Buy Breakouts so far today - 11
Stocks Screened- 8,200
Bull side - Good number of breakouts given the mixed market today. Bulls be conservative and watchful.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bearish, Nasdaq Bearish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bearish
JADE, based in Hong Kong, makes gold, platinum, and sterling silver jewelry set with diamonds and other precious and semi-precious stones at its plant in China. Annual revenues: $95 million. JADE breaks out from a 12-week flat base today and makes a new high. The stock is trading 2.2 million shares so far today, double its normal daily volume of 1.1 million shares.
The largest trade on the tape today was a big block of 32,065 shares that crossed at $12.45. That was within a sequence started by an up tick from 12.40.
JADE had a big run up from 5 to 12 earlier this year. That was triggered by the company's good earnings and its plans to open at least 100 new stores this year.
Today's breakout fits with the good triple-digit earnings gain outlook expected for the first and second quarters.
JADE markets its jewelry primarily under the Lorenzo brand name to retailers in Europe and North America.
The company offers finished jewelry about 5,000 styles of earrings, necklaces, pendants, rings, watches, and bracelets selling for $30 to $999. It also sells loose gemstones - more than four million carats annually. It sells jewelry through fine jewelers, discount chains, department stores, television shopping channels, and three of its own stores in China that are run by its ENZO division.
Technically, JADE looks like a jewel itself. The stock's basing work after its powerful run up earlier this year was very good. The breakout today looks solid supported by good volume, despite a very weak stock market.
JADE's TTD momentum indicator is strongly bullish (see top of the chart). It had three dips into the bearish zone during its basing work. That is okay. The stock's accumulation - distribution line is in an overall up trend.
JADE's long term chart shows the stock has "come to life." That fits in with the company's fundamental plans to expand its operations. Everything looks in gear.
For the upcoming first quarter, analysts predict a 325% surge in net to 9 cents a share from 2 cents a share a year ago. The highest estimate on the Street is at 10 cents a share.
Profits for the second quarter should jump 150% to 10 cents a share from 4 cents a year ago.
Overall, for the year, JADE's earnings should climb 68% to 57 cents a share from 34 cents a year ago. Looking out to 2008, analysts project a 42% gain in net to 81 cents a share. Revenue growth is running at 25% to 30%. The opening of more stores is driving profits.
Strategy Opinion: JADE is a special situation stock. TTD sees good prospects for this breakout stock and we are targeting JADE for a run to 16 to 17 within the next few months. A protective stop can be placed near 11. TTD rates JADE a very good intermediate-term play that could surprise on the upside if earnings meet expectations.
Sponsorship: Excellent. The largest fund holder is 5-star rated Turner Emerging Growth Fund with a 1.5% stake. It was a recent buyer of 230,000 shares. The second largest fund holder is Federated Kaufmann Small Cap Fund, 4-star rated, with a 1.3% stake.
CEO Lorenzo Yih and his family own nearly 30% of the stock.
Insider Activity: Not available. Two analysts follow the stock and both have buys.
TTD's Breakout Profile
Rating LJ International Inc. (JADE) |
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 | 14 | 0 | 0 |
(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.
(Trading strategy: One should buy breakout stocks at breakpoint by using market order or stop buy)
Ticker Tape Digests 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 - 3
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Very few breakdowns today. Bears be selective. Market going into a pull back period. 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.)
RDY, based in India, makes generic and branded pharmaceuticals and bulk pharmaceutical ingredients. Annual revenues: $546 million. RDY gaps lower today to set off a TTD short play. The stock is down $1.40 so far today. Volume is running at 1.7 million shares, four times its normal daily volume of 378,000 shares. The company will report earnings for the fiscal fourth quarter ended March 31 on Friday May 18.
The weak action in the stock would indicate some concern.
TTD spotted some extremely heavy institutional selling. A big block of 105,800 shares crossed the tape in the morning on a big down tick to $15.70 from the prior trade at $15.95. That would indicate some big dumping and is extremely bearish ahead of earnings.
TTD does not have an estimate for the quarter. For the year, ending March 31, the Street is looking for a profit of $1.08 a share. Comparable results were not available. Looking out to fiscal 2008 ending in March, analysts expects a 6% drop in net to $1.02 a share.
RDY's products includes ulcer medicines, antibiotics, antidepressants (generic version of Eli Lilly's Prozac), pain relievers, and cardiovascular drugs.
It also makes about 50 diagnostic products for pregnancy and cancer. The firm operates in 85 countries, although India alone accounts for about a third of its sales.
RDY is a case of sell short on the rumor, cover on the news. The rollover today without news is great for bears. TTD sees RDY falling to 12 within the next few months, or sooner.
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.
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(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.)