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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 - 8
Stocks Screened- 8,200
Bull side - Slim pickings with breakouts today as market slips back. Bulls remain cautious as market pull back is not yet completed. Bulls be very selective and keep tight stops.
Long-Term Environment for bulls: Unfavorable.
Market Status (Daily) - NYSE Bearish, Nasdaq Bearish
Market Status (Weekly) - NYSE Bearish, Nasdaq Bearish
SMP, based in New York City, makes and sells replacement parts for motor vehicles in the auto aftermarket. Annual revenues: $815 million. SMP pushes out of its 8-week flat base today and makes a new 52-week high. Volume is running at a light 85,500 shares. Its average daily volume is 121,000 shares. SMP was a stock featured in our stocks to watch breakout list.
The stock showed good tape action in the morning. TTD's clip of the tape shows a big block of 1,700 shares crossing on a nice up tick to $16.23 from the prior trade at $16.20.
The stock's light volume could well be a reflection of investor caution as the stock market works lower. However, SMP's stock is showing very good strength.
SMP supplies Engine Management and Temperature Control parts for motor vehicles – domestic and imported, new as well as older vehicles.
The parts are sold throughout the U.S., Canada, Central and South America, Europe and Asia, by traditional warehouse distributors and auto parts stores, as well as major retail stores. The company has 20 factories and distribution.
The company's engine products include ignition and electrical parts, emission and engine controls, voltage regulators, sensors, ignition wires, and distributor caps and rotors. Its temperature control offerings include air-conditioning compressors, accumulators, fan clutches, heater cores and valves, evaporators, and hoses.
Among SMP's customers are auto parts warehouse distributors such as NAPA and auto parts retailers such as Advance Auto Parts and AutoZone.
Technically, SMP's base is well formed and tight. The stock's beta (a measure of volatility) is at 0.94. The beta for the S&P 500 is 1.00.
The stock's TTD momentum indicator is strongly bullish and climbing (see top of chart).
The accumulation-distribution line is in a solid up trend. That shows there has been no significant distribution in the stock lately. TTD's long-term chart of the stock shows that is coming up against the top of a long-term sideways pattern with resistance around 17. If it can break through, the stock could advance nicely.
This year, SMP's earnings should climb 38% to 94 cents a share from 68 cents a year ago. The stock sells with a modest price-earnings ratio of 17. So the stock is reasonably valued in terms of its earnings growth.
Strategy Opinion: SMP's breakout today is subtle. With the stock market reeling from the selloff, SMP is moving in the opposite direction. TTD sees the breakout as okay and one can take a full position.
TTD is targeting SMP for a move to 20.50 within the next few months, or sooner. A protective stop can be placed near 15, tight. TTD rates SMP a trading play. The stock's longer-term appeal will depend on the earnings outlook for next year.
Sponsorship: Good. The top three fund holders all have a 4-star rating from Morningstar. The largest fund holder is Delafield Fund with a big 3% stake. It was the largest buyer recently picking up 150,000 shares. There has been no heavy selling in the stock by the large fund holders.
Insider Activity: Neutral. Some light insider selling, but not significant. Two analysts follow the stock, one is neutral, one has a sell. With the good earnings coming this year, SMP could easily picking up more of a bullish following that would boost the stock.
| TTD's Breakout Profile
Rating Standard Motor Products Co. (SMP) |
| 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 | 12 | 0 | 2 |
(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 - 7
Stocks Screened - 8,200
Long-Term Environment for bears: Favorable.
Bear Side - Small number of breakdowns but some interesting plays. Bears be selective.
(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.)
ARAY, based in Sunnyvale, Ca., is a biopharmaceutical company seeking to develop and sell targeted small molecule drugs to treat debilitating and life-threatening diseases. Annual revenues: $45 million. ARAY falls sharply today in heavy volume to set off a TTD short play. The stock is trading 2 million shares so far today, six times its normal daily volume of 354,000 shares.
ARAY's fall today was linked to the company reporting a loss for the fiscal second quarter of 45 cents a share compared with a loss of 50 cents a year ago.
ARAY's proprietary drug development is primarily focused on treatments for cancer and inflammatory disease
ARAY's products in clinical trials include potential therapies for breast cancer and rheumatoid arthritis.
The company has also out-licensed some cancer programs to AstraZeneca and Genentech.
ARAY is obviously a speculative issue. TTD sees the stock's weak technical action lately as very bearish. The losses of course compound the problem giving bears a good trading opportunity to the downside. TTD spotted good institutional selling in the morning (see table). A big block of 25,000 shares crossed the tape on a modest down tick to $22.43 from the prior trade at $22.44.
TTD is targeting ARAY for a drop to 18 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.)