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 - Just a few breakouts today even though the stock market rallies strongly. Bulls remain careful and be selective in going long One should continue to honor all stops. Stock market has potential to set up a trading range.
(Put mouse on Dow chart to see Nasdaq chart)
Long Term Environment for bulls: Neutral
Market (Daily) - NYSE Bearish, Nasdaq Bearish
Market (Weekly) - NYSE Bearish, Nasdaq Bearish
Market (Monthly) - NYSE Bearish, Nasdaq Bearish
TTD's Quality Rating of Stock - UTI - AVERAGE
UTI, based in Phoenix, provides postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle and marine technicians. Annual revenues: $380 million. UTI's stock breaks out from a six-month flat base today. The breakout comes with an expansion in volume. So far today, UTI is trading 278,149 shares. Its average daily volume is 167,000 shares.
TTD highlighted UTI as a breakout at our midsession report Tuesday.
UTI's 5-minute chart shows the stock spiking higher in the morning with strong volume. The push sent the stock over is breakpoint line.
It then settled back, but held above the breakpoint line.
UTI gave a presentation at the Deutsche Bank 2010 Small and Mid Cap Conference at the Ritz-Carlton Resort in Naples, Fla., today.
Eugene Putnam, executive vice president and chief financial officer, made the presentation. A webcast of the presentation is available at the UTI investor relations website at http://uti.investorroom.com/.
The tape action of the stock today would indicate there was good news to report.
UTI's clip of the tape shows the big block trades.
One can see a key bullish trade crossing in the morning. It was a big block of 10,300 shares at $21.55. That was up sharply from the prior big block that crossed at $20.95. So, there was some aggressive institutional buying.
UTI offers undergraduate degree, diploma and certificate programs at 10 campuses across the United States under the names of Universal Technical Institute, Motorcycle Mechanics Institute and Marine Mechanics Institute and NASCAR Technical Institute.
The Company also offer manufacturer-specific training programs including both student paid electives at the campuses and manufacturer or dealer sponsored training at dedicated training centers. UTI has 15,854 full-time students.
UTI's 12-month performance chart shows the stock appreciating 80% compared with a 22% gain for the S&P 500 index.
UTI's long-term chart shows the stock coming public in late 2003. It did not perform well working lower from 49 to around 10. However, in 2009 the stock turned up and has now broken out of a trading range.
UTI's daily chart shows the stock racing across the width of its base and edging out from its base. The stock has acted strong just at a time when the stock market has been moving lower. That has been the case of some of the school stocks.
UTI's base set up is good. The stock did spend a few days resting near the top of the base before pushing higher. It will be important for UTI to follow through on its breakout and show expanding volume.
The stock's accumulation - distribution line (bottom of chart) has broken out decisively from its sideways pattern. That is a good omen that UTI's stock will do the same.
This fiscal year ending Sept. 30, analysts forecast a 128% surge in net to $1.10 a share from 48 cents a share a year ago. The stock sells with a price-earnings ratio of 19. TTD sees that as low given the growth rate.
Looking ahead to fiscal 2011, the Street projects a 29% gain in net to $1.41 a share from the anticipated $1.10 a share.
Net for the fiscal second quarter ending March 31, analysts look for a profit of 18 cents a share compared with a breakeven a year ago. The highest estimate on the Street is at 25 cents a share. That indicates some are expecting a big quarter. TTD sees good chances for an upside surprise. The prior two quarters, UTI topped the consensus estimate by 13 cents a share for both quarters.
Strategy Opinion: TTD is targeting UTI for a move to 26 within the next few months, or sooner. A protective stop can be placed near 19.80. TTD rates UTI a very good intermediate-term play with potential to surprise big on the upside.
Sponsorship: Excellent. The top four fund holders all have a 4-star rating and several were buyers of the stock recently. The largest fund holder is Columbia Acorn Z Fund with a big 7.3% stake. The largest fund buyer recently was 4-star rated Royce Low Priced Stock Fund, which picked up 280,500 shares. UTI has 23.9 million shares.
Insider Activity: Neutral. Insiders were buyers recently. They also did selling around $20, but it was only light. Currently, 11 analysts follow the stock, just 2 have a buy, the same as three months ago.
Stock Performance Chart for 12 months with Quarterly Earnings Markers.
TTD's Breakout Profile Rating
Universal Technical Institute Inc. - (UTI)
|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 - HAR - BELOW AVERAGE|
|TTD's Quality Rating of Stock - UAUA - BELOW AVERAGE|
|TTD's Quality Rating of Stock - FORR - BELOW AVERAGE|
|TTD's Quality Rating of Stock - LNCR - 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 - 9
Stocks Screened - 8,200
Long-Term Environment for bears: Neutral.
Bear Side - Good number of breakdown stocks today even though the stock market rallies strongly. Bears be selective looking for damaged stocks with heavy volume.
(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.)
GME, based in Grapevine, Tex., is a retailer of video game products and personal computer entertainment software. Annual revenues: $9 billion. GME's stock falls sharply today an undercuts key technical support. The drop comes with expanding volume and was triggered in part by a downgrading by Credit Suisse. So far today, GME is trading 9.1 million shares, almost double its normal daily volume of 4.8 million shares.
GME's stock moved lower in the morning. It hit a bottom of 18.27 in the early morning, bounced up and then settled into a sideways trend the rest of the day.
TTD's clip of the tape shows GME's big block trades. A key trade was a big block of 129,700 shares that crossed at $18.74. That was down sharply from the prior block trade at $19.69. The trade indicated aggressive institutional selling pressure.
The brokerage firm cut its rating on GME citing concern for competition from Wal-Mart and Amazon.com.
GME sells new and used video game hardware, video game software and accessories, as well as PC entertainment software.
The Company operates 6,207 stores in the United States, Australia, Canada and Europe, primarily under the names GameStop and EB Games.
Analysts expect GME to report a 5% decline in net income for the fiscal fourth quarter ended January 30 to $1.27 a share from $1.34 a year ago. Overall, net for the fiscal year ending Jan. 30, 2010 should decline 8% to $2.25 a share from $2.44 a year ago.
GME's chart shows the stock peaking recently around 28 and then trending lower. The stock did gap lower in early January. Today's gap drop continues to exemplify the selling pressure on the stock. GME's TTD momentum indicator (top of chart) has been bearish for several week. The accumulation - distribution line (bottom of chart) is bearish.
Strategy Opinion: TTD is targeting GME for a decline to 14. If the company reports disappointing earnings the down draft could be great. A protective stop buy can be placed near 20.10
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.)