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" (swing trades). Ideally suited for entry into stocks on pullbacks within overall up trend. Good for trading range markets
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.
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 email@example.com.For service, email Beverly Owen firstname.lastname@example.org. TTD’s Tel: 1-480-926-1680.
Stocks Screened - 8,200
Bull side - Breakouts limited but some interesting plays. Stock market "dances in place." There is now a clear indication that a trading range may develop with the major averages. February is still a historically bearish month. So, bulls need to be watchful.
(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
TTD's Quality Rating of Stock - APKT - ABOVE AVERAGE
APKT, based in Burlington, Ma., provides telecom services. Annual revenues: $131 million. APKT's stock breaks out from an eight-week flat base today after reporting a big upside earnings surprise. So far today, volume for the small cap issue has exploded to 9.2 million shares, 13 times its normal daily volume of 693,000 shares.
TTD highlighted APKT as a breakout at our midsession show on the Web Wednesday.
TTD's 5- minute chart shows APKT with a gap move on big volume as it cut across its breakpoint in the morning. The stock held the bulk of its gain through the day.
APKT is engaged in providing session border controllers that enable service providers, enterprises, and contact centers to deliver interactive communications voice, video and other real-time multimedia sessions, across Internet Protocol networks.
APKT's clip of the tape shows the big block trades in the morning. One can see the price for the last block on Tuesday going off at $10.70. Then the next block trade on Wednesday went off at $12.45. That showed aggressive institutional buying. The block activity in the morning ran up to $13.83. That indicated continued buying by institutions well after the news hit the wires.
The company works with service providers include wireline, wireless, cable and Internet telephony service providers.
The Net-Net products, which consist of the hardware and software, serve as a central element in unifying the separate Internet protocol networks.
SBCs are deployed at the borders between IP networks, such as between two service providers or between a service provider and its enterprise, residential or mobile customers.
The Net-Net products support a range of communications applications at multiple network border points, providing control functions in the areas of security.
APKT's 12-month performance chart shows the stock appreciating 200% the past 12 months compared with 25% for the S&P 500 index. Obviously, today' spurt by APKT padded that gain.
APKT's long-term chart shows the stock coming public in late 2006 and trading around 20. It would dragged lower during the bear market making a bottom at $2.83 in late 2008. Since then the stock has trended higher. Today, it makes a 52-week high.
APKT's daily chart shows the gap breakout today with the big volume.
The base is tight with a range between 12 and 10. There was some profit taking when the stock peaked at 12 in December. However, that was well contained.
The stock's accumulation - distribution line has recovered nicely and today spurts higher. That indicates good buying.
APKT came in with fourth quarter net of 14 cents a share, up from 6 cents a year ago. The Street was anticipating 7 cents a share. The highest estimate was at 8 cents a share.
So, APKT's topping of the highest earnings estimate on the Street was rewarded big time!
For 2010, the company boosted its guidance to 44 cents a share to 47 cents. Its prior estimate was at 42 cents a share. That would compare with 28 cents a share for 2009.
Revenue growth is running at 35%. For 2010, the company said it expects revenues of $182 to $186 million. That is a big boost from its prior revenue forecast of $166 to $168 million.
Strategy Opinion: APKT fits the mold of a big earnings surprise. The stock is extended near-term on this breakout. However, TTD sees the stock heading to 17 within the next few months, or sooner. A protective stop can be placed near 12. TTD rates APKT a very good intermediate-term play.
Sponsorship: Very Good. The top three fund holders all have a 4-star rating. The largest fund holder is Vanguard Explorer Fund with a 2.1% stake. It was a recent buyer of 55,870 shares. Fidelity Select Communications Equipment Fund, 3-star rated, was a recent purchaser of 158,780 shares. APKT has 58.2 million shares outstanding.
Insider Activity: Slightly Bearish. Insiders have been light sellers of the stock around $11 recently. Nine analysts follow the stock, 3 have a buy, up from 2 three months ago.
Stock Performance Chart for 12 months with Quarterly Earnings Markers.
TTD's Breakout Profile Rating
Acme Packets Inc. - (APKT)
|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|
(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 - NVO - ABOVE AVERAGE|
|TTD's Quality Rating of Stock - MCD - ABOVE AVERAGE|
|TTD's Quality Rating of Stock - CSGS - BELOW AVERAGE|
|TTD's Quality Rating of Stock - BOOT - 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 - 8
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Good number of breakdown stocks today. Bears be alert to short stocks with damaged fundamentals.
(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.)
WU, based in Englewood, Co., provides global money transfer services. Annual revenues: $5.1 billion. WU's stock drops sharply today in heavy trading due to the company's lowering of its outlook for 2010. So far today, WU is trading 40.8 million shares, six times its normal daily volume of 5.7 million shares. TTD sees more on the downside.
WU's stock gapped lower at the opening and fell to its intraday low of 16.70. It then rallied to get back to 18.21 in the morning. However, after that run the stock faded moving lower through the rest of the day.
TTD's clip of the tape shows the big block trades in WU. One can see the price for the blocks declining overall from $18.85 to the latest block price of $17.39. A key trade for bears was a big block of 150,000 shares crossing in the morning at $17.
TTD views the tape action as indicating massive institutional selling pressure.
WU's services are available through a network of some 375,000 agent locations in 200 countries and territories.
The company's consumer-to-consumer money transfer service enables people to send money worldwide in minutes. Its consumer-to-business service provides consumers with options for making one-time or recurring bill payments.
The company reported net for the fourth quarter declined to 32 cents a share from 34 cents a year ago. WU said earnings for 2010 would be $1.29 to $1.34 a share. It had been forecasting $1.40. The earnings disappointment tagged the stock with a loss today.
WU's daily chart shows the gap drop today on massive volume. The spread (range from high to low) today widens showing an urgency to sell. The stock's accumulation - distribution line (bottom of chart) has been trending lower indicating the stock has been under distribution.
Strategy Opinion: TTD is targeting WU for a decline to 13 within the next six months, or sooner. A protective stop buy can be placed at 18.50.
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.)