|Go to Video Show - "How to Make Money With Breakout Stocks"|
By Leo Fasciocco -- TTD
Ticker Tape Digest will not publish Tuesday, Wednesday and Thursday. Mr. Fasciocco will be at the Las Vegas Money Show. We resume Friday.
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 positions both 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 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.
TTD often suggests using stop buy orders to enter. It is very important to buy a breakout stock as close as possible to the break point. 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.
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.
Total Buy Breakouts so far today - 3
Stocks Screened - 8,200
Bull side - Very few breakouts today even though stock market rises sharply. Bulls be patient and alert.
Long- term Environment for bulls: Neutral
Market Status (Daily) - NYSE Bearish, Nasdaq Bearish
Market Status (Weekly) -NYSE Bullish, Nasdaq Bullish
Market Status (Monthly) NYSE Bullish, Nasdaq Bullish
IBM, based in Armonk, N.Y., designs computer systems and software and provides related services. Annual revenues: $101 billion. IBM, one of the Dow Industrial stocks, breaks out today from a five-week base to hit a 5-year high. The stock is trading 6.7 million shares. That is slightly below the stock's average daily volume of 8.7 million shares.
IBM showed good tape action early in the session. TTD's clip of the tape highlights one of the largest trades of the day. It is a big block of 93,400 shares crossing on a modest up tick to $123.69 from the prior trade at $123.66.
The action showed good institutional interest in IBM. The stock is one of the better performing big cap issues. TTD's performance chart shows that IBM is up 17% the past 12 months compared with a 7% decline in the S^P 500 index.
IBM is one of the largest IT solutions providers in the world. The company's hardware products account for 22% of sales. They include servers, storage systems, and electronic subsystems.
IBM is also a leader in middleware software products. They make up 20% of sales. The products enable disparate computer applications to communicate. IBM also offers several other types of services that account for 55% of sales. The cover outsourcing, maintenance, and systems integration.
TTD's long-term chart of IBM going back to 1996 shows the stock with a big bull market run in the late 1990s. The stock has now moved into position to attack its 10-year high. That is very bullish, especially for such a big cap stock.
TTD's daily chart of IBM shows the stock breaking out of a base about five weeks ago. The stock got up to the 125 area and then stalled out. It has since formed a five-week base and is now pushing North from there.
IBM's technicals are very god. TTD's daily chart shows blue volume bars dominating in recent sessions. That means when IBM closes higher for the day volume has been heavy. That is a good sign of strong buying interest.
The stock's TTD momentum indicator (top of chart) is solidly bullish. The accumulation - distribution line (bottom of chart) has hit a new peak. That is good confirmation that the stock's price advance is being supported by good buying.
IBM is showing strong earnings growth for such a big firm. This year, analysts predict IBM's net will climb 20% to $8.54 a share from $7.13 a year ago. The stock sells with a price-earnings ratio of just 14. TTD sees that attractive to growth/value investors. That is because the p/e ratio is below this year's growth rate. Next year, the Street is forecasting a 12% gain in net to $9.56 a share.
For the upcoming second quarter, IBM is expected to post a 20% gain in net to $1.80 a share from $1.50 a year ago. The highest estimate on the Street is at $1.83 a share. IBM has been coming in with very good net. The past two quarters it has topped the consensus estimate by 20 cents a share and 6 cents. TTD sees chances for an upside surprise.
Strategy Opinion: IBM is obviously a conservative big cap breakout play. TTD is calling for the stock to advance 150 within the next few months. TTD sees low downside risk. IBM has been good at coming in with the right numbers. A protective stop can be placed near 117. TTD rates IBM a good intermediate-term play. The stock could do well if the economy should improve. TTD sees low downside risk.
Sponsorship: Very Good. 4-star rated American Funds Growth Fund of America was the largest buyer recently. It purchased 1.5 million shares. The firm is the second largest fund holder in IBM with a 0.76% stake. The largest fund holder is 3-star rated American Funds Investment Co. of America with a 0.86% stake. Another key buyer was 5-star rated Eaton Vance Large Cap Fund which picked up 100,000 shares.
Insider Activity: Slightly Bullish. Insider have done slightly more buying than selling in recent months. Currently, 14 analysts follow the stock, 11 have a buy, up from 9 three months ago. The stock has the potential to draw a bigger following.
Stock Performance Chart for One Year versus the S&P 500 index.
|TTD's Breakout Profile
International Business Machines Corp. (IBM)
|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)
Charts of Breakout Stocks
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 - 8,200
Long-Term Environment for bears: Neutral
Bear Side - Small list of breakdown stocks today. Bears be selective. TTD's feature short from Friday was American International Group (AIG). Today, the stock is down 1.13 to 39.14.
(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.)
PSUN, based near Los Angeles, sells casual clothes through about 1,000 stores. Annual revenues: $1.5 billion. PSUN's stock falls sharply today on heavy volume to undercut key support near 12. The stock got dinged by a downgrading to a sell by a major brokerage firm. The stock has been acting weak for months having declined from 22 a year ago. TTD sees more on the downside.
PSUN is trading 4,2 million shares so far today, double its normal daily volume of 1.9 million shares.
The stock remained under heavy selling pressure through the morning. TTD's clip of the tape shows a big block of 135,000 shares crossing on a modest down tick to $11.375 from the prior trade at $11.38. The action showed heavy institutional selling pressure.
PSUN will report earnings for the fiscal first quarter (April 30)on Thursday May 22. Analysts expect a loss of 7 cents a share compared with a loss of 4 cents a share a year ago. The lowest estimate on the Street is a loss of 10 cents a share. The stock's weak technical action prior to the earnings report is very bearish.
The Street is forecasting a 17% increase in net for the fiscal year ending January 30.
PSUN is a mall-based specialty retailer that points its products toward teens and young adults. The retailer offers a mix of popular and emerging brands, as well as private-label products.
TTD's daily chart shows the stock with a decline to 9 in January. That was followed by a nice rally to 14. However, the stock is now rolling over on heavy volume. The pattern looks very bearish. TTD is calling for PSUN to fall to 8 within the next few months or sooner. TTD sees the stock as a good trading short 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.)