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Ticker Tape Digest

Monday - May 14, 2007


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.

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


Breakout Stocks

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


Today’s Featured Breakout Stock

LJ International Inc. (JADE) 12.64, up 0.46 - Breakpoint 36.10

Hong Kong Jewelry Firm's Net to Soar, TTD Sees Shot at 16

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

All Timely Breakout Stocks From Tape Action Today

(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)


Charts of Selected Breakout Stocks Today





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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 - 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.

List of Stocks To Sell or Short

(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.)


Commentary on TTD’s Feature Bear Play

Dr. Reddys Labs Ltd. (RDY) - 21.07

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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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.)