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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 - 3
Stocks Screened- 8,200
Bull side - Only a few breakouts today. Bulls remain conservative. Stock market momentum remains to the downside. Be patient and watchful of breakouts. Go only with strong earnings plays. If they are breaking out now, they are showing unusually good strength.
Long-Term Environment for bulls: Unfavorable.
Market Status (Daily) - NYSE Bearish, Nasdaq Bearish
Market Status (Weekly) - NYSE Bearish, Nasdaq Bearish
TRAK, based in Lake Success, N.Y., provides Web-based software that links automotive dealerships with banks, finance companies, credit unions, credit reporting agencies, and other players in the car sales and financing business. Annual revenues: $120 million. TRAK is a small cap play that today is breaking out from a ten-week, cup-and-handle base. The move carries the stock to a new high on a big expansion in volume.
So far today, TRAK is trading a hefty 1.4 million shares, five times its normal daily volume of 273,000 shares. The stock got off to a very strong start in the morning, even while the general stock market tumbled sharply.
A look at TTD's clip of the tape shows a big block of 90,000 shares that crossed in the morning on a big up tick to $30.22 from the prior trade at $30.12. That set the bullish tone for the stock and it held it through out the day.
The catalyst to send the stock higher was a report of strong earnings for 2006. TRAK posted an 85% surge in net to 87 cents a share from 47 cents a year ago. The fourth quarter was outstanding as profits increased 92% to 23 cents a share from 12 cents a year ago.
Revenues for the fourth quarter jumped 37%. The company cited expansion of its network and also benefits from three acquisitions.
Through its software, TRAK connects clients to its network of auto dealers, financing sources, and other service and information providers. The company, which generates revenues through subscriptions and transaction-based fees, also offers tools that automate credit application processing, ensure document legal compliance, and the execution of electronic financing contracts.
TTD's daily chart of TRAK shows the nicely formed cup-and-handle base. Today's breakout comes with a widening of the spread (range from high to low). That is very bullish.
The stock's TTD momentum indicator top of the chart is strongly bullish. The accumulation - distribution line is trending higher now and supporting the stock in a technical way by saying - yes there is good buying.
TTD's weekly chart shows the stock moving to a new high. That is extremely bullish in a weak stock market.
This year, analysts predict a 40% jump TRAK's earnings this year. The stock sells with a price earnings ratio of 32, which is reasonable.
TTD sees TRAK as a very good breakout play. We are calling for the stock to advance to 40 within the next few months. A protective stop can be placed near 28 giving it some room.
TTD rates TRAK a very good intermediate-term play. The stock is most suitable for aggressive investors.
Sponsorship: Excellent. The top five fund holders all have a 4-star rating. The largest fund buyer recently is also the largest fund holder. That is Fidelity Capital Appreciation Fund with a big 3.6% stake. It was a recent buyer of 385,000 shares. Another big buyer was 4-star rated Alger Midcap Growth Fund which purchased 219,000 shares.
Insider Activity: Slightly Bearish. Insiders have been light sellers around 28. There have been no insider buyers. Eight analysts follow the stock, 6 have a buy, 2 are neutral.
| TTD's Breakout Profile
Rating Dealertrack Holdings Inc. (TRAK) |
| 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 | 13 | 0 | 1 |
(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 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 - 6
Stocks Screened - 8,200
Long-Term Environment for bears: Favorable.
Bear Side - Small list of breakdown stocks today. However, many stocks have broken down lately. Bears be allert and aggressive. TTD's short play from Wednesday, Amrep (AXR) declines 1.81 to 88.69 today.
(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.)
CC, based in Richmond, Va., Stores is the third largest consumer electronics retailer in the US. The largest is Best Buy and the second largest Wal Mart. CC has 640 superstores in about 45 states. Annual revenues: $11.6 billion. CC's stock rolls over and breaks down today triggering a TTD short play. The stock is trading 7.7 million shares, almost double its normal daily volume of 4.8 million.
TTD's clip of the tape shows CC getting off to a bearish start in the morning. A big block of 60,800 shares crossed the tape near the opening on a big down tick to $18.60 from the prior trade at $18.89. That showed heavy institutional selling pressure.
CC sells a wide array of televisions, DVD players, and audio systems, as well as CDs and DVDs.
The company also sells personal computers and peripherals, mobile computing devices, telephones, and video games. In addition to its retail stores, CC sells products through its Web site. The firm's international operations are conducted by Canadian subsidiary InterTAN, which operates more than 800 locations in that country.
For the fiscal year ending Feb. 28, analysts expect CC to report a 20% drop in earnings to 66 cents a share from 82 cents a year ago. The fourth fiscal quarter will be weak too. Net is expected to be down 21% to 66 cents a share from 84 cents a year ago.
Technically, the stock is acting very bearish. It had a sharp breakdown in mid-December and then a weak rally. Now it is rolling over again. The stock's TTD momentum indicator is extremely bearish (see top of the chart). The accumulation - distribution line is starting to roll over again.
TTD is targeting CC for a decline to 14.50 within the next few months.
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.”
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.)