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Ticker Tape Digest

Friday - May 11, 2007


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.

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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

TTD's multi-media updates include a slide-show that presents charts. It is available with use of the Real Player One that can be downloaded for free from real.com. The latest versions of Microsoft's explorer and Netscape have the player already installed and works well with TTD's slide shows.

TTD's more advanced video show comes as Microsoft video file and is best used with cable or high-speed service.

TTD also has a special feature section on Tips - Questions and Answers at the Forum section.Go To Forum click here

Quote or chart

To email Leo leo@tickertapedigest.com.For service, email Beverly Owen owen@tickertapedigest.com. TTD’s Tel: 1-480-926-1680.


Breakout Stocks

Total Buy Breakouts so far today - 8

Stocks Screened- 8,200

Bull side - Only a few breakouts as market rebounds. Bulls be selective and watchful.

Long-Term Environment for bulls: Favorable.

Market Status (Daily) - NYSE Bearish, Nasdaq Bearish

Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish


Today’s Featured Breakout Stock

Smart Modular Technologies Inc. (SMOD) 15.50, up 0.64 - Breakpoint 15

Profits to be Strong Next Two Quarters, TTD Sees Move to 20

SMOD, based in Fremont, Ca., makes PC cards, embedded computers, and memory modules. Annual revenues: $707 million. Today, the stock breaks out from a 17-week, cup-and-handle base and hits a new high. Volume so far today is running at 650,050 shares. Its average daily volume is 435,000 shares. The stock began trading at 8 last year and is one of the strongest tech issues of the past several months.

TTD highlighted the stock as a breakout at our midsession show on the Web.

SMOD will meet with analysts on May 16 in San Francisco.

TTD's clip of the tape shows one of the largest trades of the day. It was a big block of 10,000 shares crossing at $15.51. It came within a sequence started by an up tick from $15.50.

The company sells some 500 products for computer, networking, and telecommunications manufacturers.

SMOD's biggest customer is Hewlett-Packard, which accounts for 50% of sales. HPQ's business has been good.

SMOD also sells to Cisco System, Dell, EMC, IBM, Juniper Networks, Motorola, and Xerox. SMOD' provides fast product turnaround for customers. Two private equity firms, Francisco Partners and Texas Pacific Group, each own 27% of SMOD.

TTD's daily chart shows the stock's strong action of the past several months. It peaked around 15 at the start of the year and then pulled back, circled around and rallied to form a cup-and-handle base.

TTD's weekly chart shows a smoothing of the pattern and the clear cup-and-handle base. The stock is acting strong. The TTD momentum indicator is solidly bullish.

The accumulation - distribution line took a hit back in January. However, since then it has been trending higher.

For the fiscal year ending August 2008, profits should climb to 91 cents a share. Comparable results for a year ago were not available. The stock sells with a price-earnings ratio of 17.

For fiscal 2008, analysts predict a 16% increase in net to $1.06 a share.

TTD sees the stock positioned to do well now because of the strong earnings outlook for the next two quarters. For the upcoming fiscal third quarter ending May 30, profits should jump 38% to 22 cents a share from 16 cents a year ago. The highest estimate is at 22 cents a share. TTD sees chances for an upside surprise. that could boost the stock.

Strategy Opinion: SMOD is a tech play suitable for aggressive investors. TTD is targeting SMOD for a move to 20 within the next few months. A protective stop can be placed near 14. TTD rats SMOD more of a trading play. It should be evaluated when earnings forecasts are updated. The stock's action off the upcoming analysts meeting will be important to watch. TTD rates SMOD an average intermediate-term play.

Sponsorship: Good. The largest fund holder is 4-star rated Century Small Cap Select Fund with a 3.8% stake. It was the largest buyer recently purchasing 249.000 shares. Also, 4-star rated MassMutual Select Small Cap Growth Fund bought 246,000 shares recently.

Insider Activity: Neutral. Insiders were recent buyers using stock options around 14. They turned around and sold. Seven analysts follow the stock, and all have a buy. That's impressive. WR Hambrecht has a price target of 18.50



TTD's Breakout Profile Rating

Smart Modular Technologies Inc. (SMOD)
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

All Timely Breakout Stocks From Tape Action Today

(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)


Charts of Selected Breakout Stocks Today






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Ticker Tape Digest’s

Stocks To “Sell or Short”

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 - 3

Stocks Screened - 8,299

Long-Term Environment for bears: Unfavorable.

Bear Side - Very few breakdown stocks today as market rallies. Bears be patient and selective.

List of Stocks To Sell or Short

(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.)


Commentary on TTD’s Feature Bear Play

Foot Locker Inc. (FL) - 21.50

FL, based in New York, is a retailer of athletic shoes and apparel. Annual revenues: $5.8 billion. FL falls sharply today after slashing its earnings forecast. The stock tumbles on volume of 6.7 million shares, four times its normal daily volume of 1.5 million shares. TTD sees FL as a good short as it breaks below key support near 23 with a gap move lower.

FL said that net income for the first quarter will be 10 to 11 cents a share. That is down sharply from its prior forecast of 34 to 37 cents a share. It blamed a 5.1% decline in comparable store sales for the quarter.

The news came out early in the day. Yet, FL continues to show selling pressure into the afternoon. TTD's clip of the tape highlights a big block of 4,700 shares crossing on a modest down tick to $21.50 from the prior trade at $21.51.

FL has about 3,900 specialty stores in 20 countries in North America and Europe, as well as Australia and New Zealand

The company also operates Lady Foot Locker and Kids Foot Locker; Champs Sports, an athletic wear retail chain; Eastbay, a catalog retailer of athletic equipment and apparel; and the Footlocker.com Web site.

The company also has about 360 Footaction stores in the US and Puerto Rico, which sell footwear and apparel.

For the fiscal year ending January of 2008, the Street has been forecasting a 2% drop in profits. TTD sees chances for the decline to be more.

FL's big drop today signals good potential for more on the downside. TTD is targeting FL for a decline to 17 within the next few months. The stock's TTD momentum indicator is bearish and the accumulation - distribution line has rolled over and is heading south. FL put in place a stock buy back plan. We do not see that halting the expected slide.



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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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.)