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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 - Small list of breakouts today with overall quality below averae. Bulls be selective
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bullish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bearish
SNDA, based in China, is one of the largest operators of online games in China. Annual revenues: $235 million. SNDA, a rebound Chinese stock, breaks out from a seven-week flat base today on expanding volume. So far today, SNDA is trading 1.1 million shares. Its average daily volume is 576,000 shares. The stock is one of the better performing Chinese stocks of the past 12 months having climbed from 12 to 27.
TTD's clip of the tape shows strong buying late on Thursday. A series of big block trades went off that drove the stock up from $26.72 to 27. That appeared to set the stage for the breakout on Friday.
SNDA is one of the largest operators of online games in China.
Shanda Interactive Entertainment Network offers popular Chinese games such as The Legend of Mir II and The World of Legend (also known as Woool) through its Shanda Networking business.
Most of the company's sales come from subscription fees paid by users to play online games. Skyline Media Limited -- whose sole shareholders include Tianqiao Chen (Shanda Interactive's chairman and CEO), Danian Chen (SVP), and Qianqian Luo (a director) -- own 60% of the stock.
TTD's long-term chart of SNDA shows the roller coaster ride the stock has been on. It climbed from 15 to peak around 42, topped and then went back to around 15. It is now on the move up again.
TTD's daily chart highlights the recent activity of the stock, which is very orderly. The breakout today comes from a seven-week base that showed a slight dip in its late stages and then a rally.
The stock's TTD momentum indicator is now solidly bullish.
The accumulation - distribution line is weak. That is due to the stock closing near its low for several sessions recently. That development should give one a touch of caution to the stock.
This year, SNDA's profits should climb 35% to $1.27 a share from 94 cents a year ago. The stock sells with a price-earnings ratio of just 21. So, it is reasonably valued.
Net for the next two quarters will be very good. It will report first quarter net on May 22 - next week. So, here we see the stock moving higher before the earnings announcement. That is bullish.
Net for the first quarter should jump to 29 cents a share from a weak 2 cents a year ago. The highest estimate on the Street is at 32 cents a share. If that is topped the stock should perform well.
Net for the second quarter should increase 26% to 30 cents a share from 24 cents a year ago.
Strategy Opinion: It could be that SNDA is one of those breakouts that you buy before the news. That is what the tape is saying. TTD is targeting SNDA for a move to 35 within a few months, or sooner. A protective stop can be placed near 25.50. TTD rates SNDA a good intermediate-term play provided earnings hit projections.
Sponsorship: Good. The largest fund holder is 4-star rated Calamos Growth Fund with a 2.4% stake. It has held its stake steady. The largest fund buyer lately was 2-star rated Mellon Small Cap Stock Fund which purchased 189,000 shares.
Insider Activity: Not available. Eight analysts follow the stock, 5 have a buy, down from 7 three months ago. Piper Jaffray raised is rating on the stock in February and set a $29 target. They are right on.
TTD's Breakout Profile
Rating Shanda Interacitve (SNDA) |
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 | 10 | 0 | 4 |
(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 - 3
Stocks Screened - 8,200
Long-Term Environment for bears: unfavorable.
Bear Side - Only a few breakdowns today. Bears be patient and 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.)
SNIC, based in Novato, Ca., makes software and hardware for creating digital audio and video titles, recording data files to CD-R and DVDs, and backing up information stored on hard drives. Annual revenues: $149 million. SNIC gaps lower today after the company disclosed more charges related to its stock options. The news was greeted in a bearish way as the stock tumbled in heavy trading. TTD sees more on the downside. Thus, we see SNIC as a good short for aggressive bears.
So far today, SNIC is trading 1.6 million shares, five times its normal daily volume of 279,000 shares.
The tape action is extremely bearish. A big block of 75,300 shares crossed in the morning on a modest down tick to $12.05.
The company originally focused on audio products but increased its consumer DVD operations.
SNIC also licenses its technology to third parties that incorporate it into their own products. The company sales to consumers and professionals.
The company has been struggling. This fiscal year ending March 30, 2007, analysts forecast a 24% drop in earnings to 68 cents a share from 90 cents a year ago.
Technically, the stock is very bearish. Its TTD momentum indicator has just edged into the bearish zone (see top of the chart). More importantly, the accumulation - distribution line is now accelerating to the downside (see bottom of chart). That indicates selling pressure is intensifying. TTD is targeting SNIC for a drop to 9 within the next few months, or sooner.
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.)