thetechnicaltrader.net

GU just decided to get up and go Friday morning and not turn back seizing us from buying any shares near my $11 buy target. Price has rallied over 100% in the last 9 trading sessions so its very likely that some profits should be taken sooner or later. I purchased just a small 1/4 position at 12.50 on friday somewhat distant from my $11 buy target. But its turned out quite well. I’m going to sell this quarter position Monday and look to re-buy another position of GU given the opportunity on a dip near the midpoint of the breakout candle which is 13.50. So we should look to buy some shares in this region as i believe this stock can run higher from here.

Its been a while since i’ve found one of these Chinese stocks that used to be so easy to find months ago it was like trying to find piece of hay, in a pile of hay. Since Xinyuan’s IPO in December the trend has been in bear mode as the market has faced credit and housing issues all year long lead by the U.S. which hasn’t been in favor of upside movement for stocks. I’m not one to call a bottom in the housing sector by any means. But there are always short squeezes and short term opportunities to capitalize on in depressed stocks on the long side.

Fundamentally (NYSE:XIN) is deeply undervalued within the Residential construction industry carrying an extremely low forward price/earnings ratio of just 4.38x compared to the industry average of 26.67x. For the recent fourth quarter XIN posted strong results with income up 81% , excluding a one time charge, and revenue more than doubling to $91m. Looking forward XIN is expecting strong growth with an estimated 1.77eps in 09′ hence the extremely low forward P/E. Given these estimates XIN carries a future fair value within the industry near $46/share compared to todays closing price of just 7.83. Obviously is far fetched to think this stock is going to sky rocket to $46/share. But this depressed valuation along with a bullish chart setup is likely to result in a significant upside move that we can capitalize on. I’m going long XIN Monday.

LUNA
FSYS
BPAX
SNCI
WTSLA
VISN*
JSDA
RSTI
GU*
COT
DFR
GRO
XIN*
QBIK
ERHE
HYBR

First stock we’re gonna take a look at is Emergent Biosolution (NYSE: EBS) . Fundamentally EBS looks strong as it carries a low forward P/E ratio of just 8x earnings on estimates of 1.06 eps in the year following. Currently the Biotech industry is trading at a much higher mutlitple of 26.06x making EBS look fairly cheap among its peers of biotechs. We could suggest a fair value for EBS of 27.60/share found by multiplying the forward earnings of 1.06 by the 26x industry average earnings multiple. This gives us plenty of room to capitalize on a trade with todays closing price of just 8.53:

Technical Analysis:
After breaking out from its bearish descending channel EBS has made a strong run topping it off with todays strong rally on increased volume. Price is down AH and i expect some profits to be taken warrented its overbought. I want to pick up some share of EBS near $8 +/- $.20

Next we’re going to take a look at a small cap stock thats making a very bullish trend reversal which broke out today indicated by a rounded bottom/ ascending triangle pattern that was accompanied by increased volume confirmation. The company is Boots & Coots International (AMEX: WEL) . WEL holds a very strong forward earnings multiple of just 6x with the Oil & Well equipment industry average trading at a 14.67x multiple making this stock undervalued within its industry. This combined with a very technically strong short provides us with a golden opportunity to capitalize on a profitable trade. WEL’s fair value within its industry is $4.25/share compared to todays closing price of 1.74. I want to go long WEL.

And last but not least we’re going to take a look at a recent IPO, Gushan Environmental Energy Limited (NYSE: GU). GU has been stuck in a horizontal trading channel ever since its IPO making quite volatile swings up and down. Though with todays strong move and volume increase i think this could be the run that finally breaks this thing out to new all time highs. GU has strong forward growth carrying a significantly low forward earnings multiple of just 6x compared to the Specialty Chemicals trading average of 16x. GU is expecting earnings 1.76eps on 60% revenue growth for the following year giving this stock a very attractive future fair value near $28/share compared to todays closing price of just 11.97. Today price close right near strong horizontal resistance at the top of its channel and is down AH. This provides us with an opportunity to buy some cheaper shares on the dip. I want to be long GU around $11/share

KIRK made a very impressive breakout today which provides us with a lot of momentum to capitalize on. I alerted that i was buying this stock around 15 minutes before the closing stating im purchasing a 1/3 position when the stock was trading near $1. In the last minute of trading things became very active with 400K + shares traded (over 1/2 the daily total volume) giving another boost in share price to close the day at 1.08. I went long and strong at 1.02.

SYBD has been bull listed several times in the past few weeks and finally hit a strong trigger buy price on the breakout of its symmetrical triangle at .75 today where i suggested to go long. This breakout should spark some strong momentum surging price near $1/share where we should look to take our profits.

CMOS is another stock that we bull listed a week or so ago with a trigger buy price of 1.50 on the breakout of resistance. CMOS barely closed above resistance today at 1.51 but the chart looks strong and could easily result in a strong trade as this stock is fairly valued within its industry near 3.50 and technical we could see price run to the gap fill around $2/share.

UCFC made a great looking ascending triangle breakout on thursday with volume backed confirmation suggesting a higer probability that this breakout will continue its run from here. We should be able to pull 10%+ on this short term trade with next resistance level around 7.50 . I want to long UCFC monday.

SSRX is has formed a strong bottom pattern which could result in a great opportunity for us to make a short term swing or day trade if the trigger buy price of 8.80 is breached. This would suggest the possibility of the gap being filled near 10.75 which would give us lots of room to capitalize on some nice gains. I want to go long on a breakout of 8.80. Watch for strong gap opens as we don’t want to chase this thing on a gap open and watch it decline from there.

Last but not least is WPL which will likely be the most volatile of these 3 day trading oppotunities. If and when price breaks the resistance mark of 2.05 i want to go long on WPL. Once the position is opened, if price makes a run above 2.40 i will enter a stop loss on a breakdown of 2.40 as i want to avoid getting caught in a false breakout which would result in a bearish shooting star candle.

BULLS:

MALL
CCOW
VVTV
IOMI
FRPT
UCFC*
SSRX*
WPL*
SYX
NDN
CHCG
SYBD*

SHORT:

EQIX
WAT
JBL

SYBD  is a small penny stock with a great looking chart that has made quite a bull run over the recent past. Recent price has been consolidating and formed a great looking short term ascending triangle pattern as we can see here by looking at the 60 minute intra day chart. If price breaks out from .75 resistance this should result in a a very strong move up near $1 IMO providing us with a great opportunity to make some money. I want to be long on a breakout of .75.

We traded VISN earliar this month for an awesome 31% trade and it looks like we might be able to catch another strong trade with this stock on the support bounce. Price made a strong move today with price bouncing off of both the horizontal and ascending support levels leading me to believe these support levels will hold. I alerted  a BUY on VISN today on the message board Shout box intraday. If your not a member already sign up today for a free membership and receive our email alerts as well. CLICK HERE

fundies and growth are strong for VISN while this stock is still undervalued. Fair value within its industry is around 16.50/share given its forward earnings estimates of .71 and its industry trading an earnings multiple of 23x.

I went long like Donkey Kong at 9.60

Technical Analysis:

It was an amazing session for the bulls today with the Nasdaq and S&P500 both rallying over 4% making this the biggest move for the S&P since 2001. This was a result of the FED cutting the rates yet again by .75 points. I was surprised not to see a sell off on the news as most were expecting a cut of a full point. Although better than expected #’s released by Lehman Brothers gave the market that extra boost in confidence pushing the DOW up 420 points on the close.

Technical Analysis:

Looking at the current chart of the DOW price is coming up on a very strong descending trendline that has proved to be a significant resistance point for these short term bullish rallies. For the bulls to be back in favor of the market i believe the DOW needs to sustain prices back above the horizontal resistance mark around 12,750.

Mondays session should be quite interesting as Jp Morgan is buying out Bear Stearns for just $2/share! This is significantly cheap as most of the small under the radar small caps are worth a similar amount… Financial markets are looking grim and the fact that BSC is selling out for just $2/share and on top of that the FED just decided to cut the rate by another .25 basis points Sunday re-affirms the sketchy situation.

Asian markets slumped near 3%, S&P futures dropped 2.3% and the dollar fell to a record low against the Euro. But hey, This is good news if your positions are anything similar to TheTechnicalTrader.net portfolio. We’re heavily weighted short, and our position in CGLD.OB should perform well on the long side as gold broke over 1,000/oz over the weekend as the dollar collapsed with oil rising as well.

So it will be interesting to see how the markets will react tomorrow. I’d say its a given we’ll see the markets gapped lower on the open, from there, who knows.

NTMD has a great looking stock chart forming a bullish Cup & Handle chart pattern with a trigger buy price of 1.25. Friday price made a solid 10% rally on increased volume in the face of the bear giving this stock some strong momentum. If price breaks out from 1.25 i want to take a long position as this should move at least 10% for us to profit on.

MBI is still a strong possible for us to keep a close eye on that i alerted last week. Still looking to go short on a breakdown of 10.65 here.

LONG:

AGIX
NTMD
IMMU
CFSG
HOKU
CRUS
JYHW
QBIK*

SHORT:

TWX
YHOO
WFMI
AYE
GM
F
BSC

CGLD.OB released some strong earnings yesterday posting some very strong year over year growth. This chart breaking out with very heavy volume in conjunction with this positive earnings and there gold production expanding from 50k to 70k ounces /year expected by 09′ should result in a very strong upside move. I’m in at .77.

Capital Gold Corporation Announces Second Fiscal Quarter Financial Results
Friday March 14, 9:00 am ET

Gold Sales and Net Income Up While Cash Costs of Production Remain Well Below Industry Average

NEW YORK, March 14 /PRNewswire-FirstCall/ — Capital Gold (TSX: CGC - News; OTC Bulletin Board: CGLD - News) reported today that gold production, revenue and net income were up for the second fiscal quarter, ending January 31, 2008, as compared to the first quarter.
Through January 31, 2008, net sales were $8,043,000 based on 9,550
ounces of gold sold at an average price of $843, as compared to sales
of $6,526,000 based on 9,194 ounces sold at an average price of $711
for the first quarter, a 23% increase. (The London Bullion Market
Association average gold PM fix was $835 for the second fiscal quarter,
ended January 31, 2008).
– Net income was approximately $2,126,000 in the second quarter, which
equates to a fully diluted income per share of $0.01. Net income was
$1,747,000 in the first quarter. Net income for the six months ended
January 31, 2008 was $0.02.
– Cash costs of just $246 were achieved for the six months ending
January, 31, 2008 — well below the gold industry average of
approximately $371 per ounce.