Market Talk with Piranha is currently moving to its new home at chrisperruna.com. The new site is up and running but many of the posts need editing as the images and stock charts did not transfer successfully (thanks blogger). I will post all new entries to both blogs – Thank you for your patience while I make this change!

Thursday, November 03, 2005

MSW Mid-Week Screen

...I am posting a mid-week screen to everyone today, a typical breakdown of the best performing stocks on MSW and detailed market analysis. This specific list also narrows down several stocks that made solid moves in the market Wednesday and are at or near new 52-week highs with strong fundamental and technical characteristics.

MSW Mid-Week Screen:
The MSW weekly screened stocks are starting to heat up! Today, the group of 24 stocks was up 3.56% collectively with only two securities giving us a loss (CPTV and WC, down -0.18% and -0.33% respectively). Our top gainer of the day was CUTR which has been itching to make the official screens for the past several weeks. As you already know, this stock has been on the weekly screens since August 20, 2005 when it was listed at $22.41 (with today’s close, the stock has gained 45% while sitting on the watch list). With a 20.85% gain on volume 978% larger than the 50-d m.a., I can say that the stock has made it presence. It posted earnings of $0.27 a share versus $0.07 a share last year. Analysts expected a jump to $0.14 while the company expected a move to $0.13 a share, both well below the actual report.

CB Richard Ellis was up an impressive 13.55% on volume 444% larger than the 50-d m.a. after crushing its earnings estimates. Third quarter earnings surged to $0.75 per share, well ahead of analysts estimates near $0.60 per share. Last year, the company reported earnings of $0.16 per share or profits of $11.9 million (yesterday the profits came in at $56.9 million). The resistance level that we have been establishing for this stock and the buy area that we have spoken about near $50 was crossed over today in a hurry as the stock made me proud after keeping it on the screens though the tough times. I rated CBG a buy for trend traders and momentum buyers over the past two weeks.

PATIENCE is essential; I have been writing about patience for months and days like today make me look like I know what I am preaching. This year (2005) has been tough for stock investors and it has been especially tough for equity research communities such as MSW because people start to lose faith in me instead of understanding what is taking place (they expect 100% gains every year and don’t like to see 20%-30% gains). Officially we are in a rally both on MSW and in IBD so stocks can be purchased but I would do it with caution until the NH-NL ratio returns to prominence. Eleven stocks from our most important screen (weekly screen which will become the MSW Index in the near future) were up at least 3.5% with eight of them doing so on above average volume. I will repeat that the MSW weekly screened stocks will always outperform the market on good days because I narrow down this list to the best performers with the most strength. Are the weekly screens repetitive? Yes they are from time to time but the stocks pay off in the long run and you will understand why jumping ship from stock to stock is a losing proposition. With strong stock selecting skills and the patience to wait until the “M” in CANSLIM is right, you will make some of the best returns of your life.

Why am I so excited today? Because my leading stocks are giving me signals that the market may be ready to move. I am now in the mode to grab shares in stocks I have been following over the past two dismal months. I will be cautious because the NH-NL ratio must confirm the action but I also don’t want to let too many stocks get too far extended. If the NH-NL ratio does not confirm, be prepared for a nasty pullback so don’t get over anxious. I know the MSW All-Star list has been stagnant lately and many new subscribers expect to see the triple digit winners from the start but this is not realistic. If this new rally lasts and turns into something stronger, you will see fresh names make that list but until the market creates a new bull, most of the gains will be under 100% but far better than the market and most competition.

With the NASDAQ back above the 50-d m.a. and the strong surge today, we can feel safer adding new positions to our portfolios. Do not use margin until that NH ratio starts producing at least 800+ new highs per day. As this rally continues to develop, you can slowly move away from the cash reserves that I had you move into over the past couple of months. Last month in the mid-week screen, I said that a critical point for crude oil was $60 per barrel and if the number was penetrated, the market may turn higher and the energy sector may be in trouble. Crude oil ended at $59.75 today, the lowest close since July. With earnings beating expectations across all sectors, the market is finally moving higher when it should (after positive announcements). The NH-NL ratio ended at 298-91 today, the strongest new high total for the week. Since many stocks have been beaten down over the past two months, this indicator will take a few more days and or weeks to reach the required rally territory. If the indicator fails to produce 500+ new highs per day over the coming weeks, I will get worried. Until then, I will use the MSW weekly screened stocks as my gauge for the strength in the market and will confirm what it is saying as December approaches.

This week, we have been watching as several sectors are moving to the front of the pack and they include medical stocks, transport stocks, computer software stocks and other technology related industries. Specifically speaking, transportation and insurance industries have been making a lot of noise this week with investment banks also moving higher.

Tonight, I will cover several big performers from the MSW weekly screens and I will also post up some strong performers outside of the MSW stocks on a blog post that will be uploaded tomorrow morning. Enjoy the gains today and get ready to rock and pull the trigger if this rally last, don’t get gun shy, you can always sell at a small loss or for a small profit if things turn bad. Don’t kick yourself in the side six months from now because you missed the beginning stages of an attempted rally. Play the odds, use risk control and you won’t need to worry no matter what the markets throws at us. If the market develops a strong rally, your reward will be a big fat portfolio gain, one that you earned based on sound rules and judgment and you will be happy to pay the capital gains in a year or so. I am always happy to pay capital gains because I know I had a great year!

MSW Movers Today:
CUTR – 32.52, up 20.85% on volume 978% larger than the 50-d m.a. The stock crushed earnings today and is now extremely extended from any major buying opportunities.

CBG – 56.32, up 13.55% on volume 444% larger than the 50-d m.a. The stock was up near $55 within the first hour of trading, almost 10% past the official entry area. CBG now has a 51% gain on MSW since May.


THE – 48.42, the recent case study was posted yesterday and the stock added another 4.78% to the recent gains. Volume was up 48% versus the 50-d m.a. The stock has gained 36% since being listed on the screens at the end of September.


AAPL – 59.95, I hope everyone held earlier in the month when I specifically came out and told you that I was a holder until it broke key support lines (moving averages). Since the drop to $47.87, the stock has rebounded for a 25% gain. Since it was re-listed to the MSW screens in July at $41.55, the stock is up 44%, one of our top performers during the dreadful summer months. Since the first MSW weekly screen last October, the stock is up 153%. The reason it is not an All-Star is due to the fact that we sold the stock earlier this year when it started to breakdown and correct. If I held the entire time, it would be on the All-Star list. I try to be honest with the rules of the site.


ESRX – 78.15, up 4.13% on volume 97% larger than the 50-d m.a. This stock was added as a $60-$100 candidate on October 15, 2005 at $61.16. In a couple of weeks, the stock has gained 28% on MSW.


ADSK – 47.60, up exactly 4%, this stock rounded out our biggest winners today that made gains of at least 4%. The stock is up almost 30% since June when it started to consistently make the weekly screens.


NNDS – 38.80, the stock passed the original pivot point that was reached two weeks ago before the reversal but needs one more big day to make that new high and be a sure breakout. A move above $39.79 would qualify.


WFMI – 149.87, this horse has been a champ since getting support near the 50-d m.a. We now have a 28% in the stock since the first screen in May at $116 per share. Some thought the stock was too high once it crossed over $100. What are they saying now? Buy with the trend and you will be okay, never think a stock is too high to purchase or too low to sell.


Other Stocks Making Noise Today:

Medical:
WOOF, HOLX, STJ, SMTS, HITK, ISRG

Business Services:
EXBD, SAY

Computer Software:
BLKB, KNXA, BBBB, CRM, TALX, CNQR

Internet:
TRAD, GYI

Others:
HANS, MIDD, NWRE, ELOS, MNT, EXBD, BOOM

Several stocks listed above have made past MSW weekly screens but were removed due to corrections or for profit taking. These stocks include HANS, HITK, CRM, ELOS, BOOM & WOOF. The most recent stock from this group that was removed was CRM as it corrected with the market over the past two months. Recent action has kicked it back into gear as the stock is trending higher. Hansen (HANS) broke out to a new 52-week high and looks to be ready to make a $60-$100 run for the second time (it made the run earlier in the year before the split). We followed the stock from the $60 level until it hit $100 here on MSW. If options were available, I would be buying “at the money” calls with at least a 9-12 month time frame.

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