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.
Ticker Tape Digest's Trading Strategies Overview and Performance
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 for the Long Term." Ideally suited for entry into top performing big cap stocks on pullbacks within overall up trend.
Aggressive Bearish Investors - "Breakdown Stocks" to Sell Short. Ideally suited for bear markets or market pull backs. Potential for large returns
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 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 email@example.com.For service, email Beverly Owen firstname.lastname@example.org. TTD’s Tel: 1-480-926-1680.
Total Buy Breakouts so far today - 5
Overall Quality of Breakouts - Average
Stocks Screened - 8,300
Bull side - Breakout list small as stock market finishes mixed. Some interesting plays, though. Stock market extended now vulnerable to a pause. Bulls remain careful now, and be selective.
(Put mouse on Dow chart to see Nasdaq chart)
Long Term Environment for bulls: Neutral
Market (Daily) - NYSE Bearish, Nasdaq Bullish
Market (Weekly) - NYSE Bullish, Nasdaq Bullish
Market (Monthly) - NYSE Bullish, Nasdaq Bullish
Ticker Tape Digest's
(See Top Performing Breakout Stocks for 2011- 2012)
TTD's Quality Rating of Stock - RAX - ABOVE AVERAGE
RAX, based in San Antonio, Tex., provides internet hosting and cloud computing services. Annual revenues: $957 million. RAX breaks out today from a 16-week flat base. The move also represents a breakout from a one-year, cup-and-handle base. RAX pushes to a new high with volume surging to 4.4 million shares, triple its normal daily volume of 1.5 million shares.
TTD highlighted RAX as a breakout at our midsession video show on the Web Thursday.
TTD also featured RAX via Leo Fasciocco's column on www.esignal. A link to the story called Money and Investing is here
RAX's 10-minute chart shows the stock breaking out in the morning with strong intraday volume. The stock continued to work higher peaking at 47.90 off a breakpoint at 45.42.
RAX's tape action shows the recent block trades.
One can see a key bullish block trade came late on Wednesday when a block of 40,069 shares crossed the tape at $44.45. That was up sharply from the prior block trade at $44.02.
The price for the blocks climbed to a peak of $47.55 on a block of 61,200 shares. The tape action was very bullish and indicated strong institutional buying.
RAX offers its products under the Fanatical Support brand. The company’s services are sold to businesses in more than 120 countries.
RAX serves some 130,000 business customers and managed more than 66,000 servers, 2.1 million e-mail accounts, and 417,000 cloud hosting domains.
RAX's 12-month performance chart shows the stock appreciating 30% versus a 2% gain for the S&P 500 index. The chart shows steady insider selling which has easily surpassed insider buying.
RAX's long-term chart shows the stock coming public in 2008 and soaring from a low that year of $4.80 to a peak today of $23.51 by late 2009. It pulled back to 15 in 2010, but has since moved sharply higher. The stock's push to a new high is very bullish and could attract more buying on Friday.
RAX's daily chart shows the stock forming a long-term cup-and-handle base and near-term a flat base. The breakout today is impressive showing a widening of the spread (range from high to low) with a widening of the spread/
The stock's TTD momentum indicator (top of the chart) is now strongly bullish.
The accumulation - distribution line (bottom of chart) has been weak. That would indicate some selling pressure in recent months.
For 2011, analysts expect RAX to post a 50% gain in net to 53 cents a share from 35 cents a year ago. The stock sells with a price earnings ratio of 83. That is very high. So, one needs to be watchful of the stock.
Going out 2012, Wall Street projects a 52% gain in net to 80 cents a share from the anticipated 53 cents a share for 2011.
Net for the upcoming fourth quarter should climb 50% to 15 cents a share from 10 cents a year ago. The highest estimate is at 17 cents a share. TTD does not expect any surprises. RAX tends to come in right at the estimate.
Looking out to the first quarter of 2012, net is expected to surge 70% - an acceleration in quarterly earnings growth. The analysts are looking for 17 cents a share, up from 10 cents a year ago.
The company recently made some key top management changes.
Strategy Opinion: RAX is a leading stock with strong profit growth. The breakout probably caught a lot of attention on Thursday.
TTD is targeting RAX for a move to 57. A protective stop can be placed near 42. TTD rates RAX an average intermediate-term play due to its high p/e ratio. The stock has a beta of 1.45 versus 1.00 for the S&P 500 index.
Sponsorship: Excellent. The top three fund holders all have a 5-star rating. The largest fund holder is Fidelity OTC Fund with a 3.9% stake. However, it was a recent seller of 173,700 shares. The 5-star rated Wells Fargo Advantage Growth Fund was a recent buyer of 155,000 shares. It has a 2.9% stake. RAX has 131 million shares outstanding. Institutions hold 70% of the stock.
Insider Activity: Bearish. Insiders have been steady sellers of the stock. (see chart). Some exercised options at $19.51 and $14.91 and turned around and sold for about $42. Currently, 18 analysts follow the stock, 11 have a buy, up from 8 three months ago.
Stock Performance Chart with Quarterly Earnings Markers
Insider Activity - Buying in Green - Selling in Red
|TTD's Breakout Profile
Rackspace Hosting Inc. - (RAX)
|TTD Check List||Bullish||Bearish||Neutral|
|Near 52-week High||YES|
|Price Trend - Daily||YES|
|Price Trend - Long Term||YES|
|Price Daily Spread||YES|
|Base - A-D||YES|
|Prior Breakout Success||YES|
Charts of Selected Breakout Stocks
|TTD's Quality Rating of Stock - ZNGA - AVERAGE|
|TTD's Quality Rating of Stock - CNQR - AVERAGE|
|TTD's Quality Rating of Stock - CDNS - BELOW AVERAGE|
|TTD's Quality Rating of Stock - SAVE - AVERAGE|
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 - 4
Stocks Screened - 8,300
Long-Term Environment for bears: Unfavorable.
Bear Side - Small list of breakdown stocks today. Stock market continues to hold up. Bears be patient and watchful.
ANF, based in New Albany, Ohio, sells casual clothes, especially to young people. Annual revenues: $4 billion. ANF's stock plunges today after the company forecast a big drop in earnings for the fiscal fourth quarter ended January 31. So far today, ANF is trading a heavy 12.6 million shares, four times its normal daily volume of 3.4 million shares.
TTD highlighted ANF as a short at our midsession video show on the Web Thursday.
ANF said earnings for the fiscal fourth quarter ending Jan. 31 should come in at $1.10 to $1.15 a share.
The Street was forecasting net of $1.56 a share. So, results were disappointing and the stock reacted bearishly to the news.
ANF gapped lower in the morning and hit an intraday low of 30.65. It lifted slightly and then trended sideways the rest of the day.
ANF's tape action shows the recent big block trades. One can see the price for the blocks declining from $46.16 on January 31 to $41.40. A key bearish trade came when a block of 188,800 shares crossed the tape at $41.67. That was down sharply from the prior block trade at $46.16. The tape showed heavy institutional selling pressure.
ANF's clothes are geared for young people. It sells through stores in malls a catalogue, a magazine/catalogue and a website, all bearing some form of the company name. The firm said fiscal fourth quarter comp sales were flat.
Analysts expect net for the fiscal first quarter ending April 30 should rise just 5% to 28 cents a share from 27 cents a year ago.
ANF's chat shows the stock falling from 77 in early November to 45. It then trended sideways trying to form a bottom. However, today's gap lower opens the possibility of more on the downside.
Strategy Opinion: TTD is targeting ANF for a decline to 35 within the next few months, or sooner. A protective stop buy can be placed near 45.
|TTD's Quality Rating of Stock - ANF - BELOW AVERAGE|
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.)