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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 - 13
Stocks Screened- 8,200
Bull side - Modest number of breakouts, with just a few good plays. Bulls be selective.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bearish, Nasdaq Bearish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
NLC, based in Naperville, Il., provides water treatment services. Annual revenues: $3.6 billion. NLC breaks clear of a 10-week flat base today. The stock had a good move higher with strong volume on Thursday. Today, it continues to push higher. Volume so far today is running at 1.5 million shares. Its average daily volume is 963,000 shares.
The company is one of the world's largest maker of chemicals used in water treatment and for industrial processes.
The company's chemicals help clarify water, conserve energy, prevent pollution, separate liquids from solids, and prevent corrosion in cooling systems and boilers.
NLC gets a good chunk of its sales from overseas.
TTD's clip of the tape from late on Thursday shows some very significant accumulation. A big block of 32,100 shares crossed the tape on a nice up tick to $25.52 from the prior trade at $25.50. That showed some subtle and aggressive institutional accumulation.
TTD's daily chart shows the strong move higher today as the stock clears a base between 25.50 and 23. The base was set up after the stock rallied from 19 late last year.
The past few sessions the stock has been working higher with expanding volume. That is bullish.
NLC's TTD momentum indicator is very bullish (see top of chart). TTD is very impressed by the accumulation - distribution line which is now at a new peak. The action confirms that there is good buying supporting the stock's price advance.
NLC's weekly chart shows the stock in a solid up trend and making new highs.
This year, NLC's profits should climb 26% to $1.06 a share from 84 cents a year ago. The stock sells with a price-earnings ratio of 24, which is reasonable and in line with the profit growth rate.
Next year, NLC's net should climb 29% to $1.36 a share.
For the upcoming first quarter NLC should rack up a big 122% gain in net to 20 cents a share from 7 cents a year ago. The strength we are seeing in the stock now may just be a confirmation of buying before the numbers come out in early May.
Strategy Opinion: NLC looks solid with a touch of some strong technical action now. TTD is calling for NLC to advance to 32 within the next few months. A protective stop can be placed near 24. TTD rates NLC a very good intermediate-term play because of the strong earnings outlook.
Sponsorship: Excellent. The largest fund holder is 5-star rated T. Rowe Price Mid-Cap Value Fund with a 4.% stake. It has held its position steady. A big buyer recently was 5-star rated Baron Small Cap Fund which purchased 1 million shares. Also, 4-star rated Legg Mason Partners Cap Inc. bought 815,000 shares.
Insider Activity: Neutral. No significant selling lately. Nine analysts follow the stock, 2 have a buy, 7 are neutral - the same sentiment as three months ago.
|TTD's Breakout Profile
Nalco Holding Co. (NLC)
|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.
(Trading strategy: One should buy breakout stocks at breakpoint by using market order or stop buy)
Ticker Tape Digests 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 - 5
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Only a few breakdown stocks today, but some interesting plays. Bears be selective. TTD's short play from Thursday, Microstrategy Inc. (MSTR) declines 1.02 to 115.03 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.)
SIMO, based in Taiwan, develops and markets semiconductor products aimed at the multimedia consumer electronics market. Annual revenues: $82 million. SIMO breaks down today with expanding volume triggering a TTD short play. The stock was a good performer but now it is breaking to the downside from a classic bearish pattern called a head-and-shoulder top.
So far today, SIMO is down about 1.40 points. Volume is running at 2 million shares, double its normal daily volume of 1 million shares. TTD spotted key selling on the tape in the late morning (see table).
A big block of 20,000 shares crossed the tape on a down tick to $20.60 from the prior trade at $20.62. About the same time another big block of 19,900 shares traded on a down tick to $20.60 from the prior trade at $20.61.
SIMO's products include controllers used in mobile storage media items like flash memory cards and USB flash drives.
The firm also makes multimedia systems on a chip. They are used in devices such as MP3 players, PC cameras, PC notebooks, and broadband multimedia phones. Mobile storage products account for about 85% of sales. Lexar Media accounts for 25% of sales.
A look at SIMO's chart shows a nice run up with the stock peaking around 26. Then it pulled back, and had a rally failure. Now it is starting to head lower. Note on TTD's chart the expansion of volume in recent down sessions. The stock's TTD momentum indicator is bearish (see top of chart). The accumulation - distribution line is now trending lower.
Although, SIMO should show a 45% increase in net this year, TTD sees the techncial action as very bearish and perhaps an omen of some fundamental problem coming. TTD is targeting SIMO for a decline to 16 within the next few months, or sooner. The stock is most appropriate for aggressive bears.
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.)