Date:  April 20, 2008

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Fundamental Data provided by Investors Business Daily  

F.I.T. STOCKS

Finding High Quality Growth Stocks to Build Healthy Investment Habits.  

Market Update

MARKET HEALTH:  Market in Confirmed Rally, but invest with Caution:  Yellow Light is trying hard to turn GREEN!

The Yellow Warning Light is still UP!  But the stock market seems to want to turn GREEN.  If you listen to all of the news out there, one would not know what to believe or which way this market is going.  This is why as HEALTHY INVESTORS we let the major indexes and leading stocks show us the way.  This past week things really started to look up since the follow through day of March 20.  Positive signs are starting to appear even though many still remain skeptical, but if we take our emotions out of the equation and let the market, and leading stocks dictate the path of least resistance, it appears this new rally is gaining strength.  First, as discussed in earlier newsletters, lately when the markets have a sell off the volume remains rather light.  Compare this with the markets up days and we see the volume picks up when the market rallies.  A very positive sign.  Second, the markets seem to be able to shrug off any bad news about the economy, or bad earnings reports.  A couple of months ago, if you remember, any bad reports sent the markets tumbling on very strong volume.  So it appears there is something that the big institutions are looking at in their economic indicators or in the earnings reports they review that may be suggesting the worst of this storm is over.  Third, many leading stocks, in leading industries have begun to break out of sound base patterns on strong volume.  This indicates that the big money is starting to acquire leading equities.  Many of our F.I.T. Stock recommendations have also started to break out on heavy volume, SID, VMI, and RIG to name a few. 

What does this mean?  As always continue to monitor the markets daily price and volume action.  Price and volume show the true nature and conviction of what is really going on in the markets.  This can also be said for any stocks you become involved in.  As growth stock investors we need to monitor our stocks daily for strong volume movement on up days and light volume movement on down days.  This adds conviction and confirmation to our decision making process and is the sign of a HEALTHY INVESTOR. 

IMPORTANT:

Think of yourself as a coach getting ready to go to the draft.  We are going to draft one player or STOCK at a time and if they play well and continue to shine we will add another fundamentally sound player.  If the market continues to rise and our leading stocks are doing well we will continue to build our team until we have the portfolio we want. 

If the market starts to sell off again and our player (STOCK) does not perform to its potential we cut them from the team with our 7% loss with no exceptions.  The KEY to becoming a successful investor is to follow the FLOW of the markets not try to fight them, which tends to be most people's nature.  Remember, we let the markets tell us where they want to go; we do not try to predict where they will go.

Let us take a look at the 6 month charts of the 3 Major Indexes:

NASDAQ

S&P 500

DOW Jones Industrial

All 3 of the major indexes our proposing similar traits.  First, they are all trying to break through major resistance levels, as indicated by the white horizontal lines.  Second, they all had strong buy side volume days on Friday.  Third, since the March 20 follow through day we seem to be making a series of higher lows and higher highs, indicating a new up trend is trying to form. 

This week or in the coming weeks we would like to see the 3 major indexes break through these major resistance levels on strong volume.  If the markets are able to do this it would be a sign of great strength for the stock market and possibly switch our stock market light to GREEN.

Stock: Arena Resources Inc 

Symbol: ARD

 Fundamentals:  9.9 out of 10

Industry:  Oil and Gas US Exploration                                    Industry Strength: 1 

Technical Pattern: U Turn                                                      Avg. Volume: 538,684

Pivot or Buy Point: $44.33

Stop Loss: $41.13 or 7%

Profit 1: $48.76 or 10%

Profit 2: $53.19 or 20%

Arena Resources is engaged in the exploration and production of oil and natural gas properties in Oklahoma, Texas, Kansas, and New Mexico.  It is listed in the #1 industry group and reported a 71% increase in earnings last quarter.  Sales were up 113%.  ARD has formed a nice 8 week U Turn pattern and now rest just .03 cents below its proper buy point.  When ARD hits its buy point of $44.33 it may be time to jump in on this hot industry.  Confirm the move with strong volume confirmation.

Stock:   Bristow Group, Inc. 

Gerdau has been building a strong Cup with Handle pattern for almost a year.  The Handle has been forming for the past 8 weeks and prices currently rest right underneath the high of this handle.  Last quarter earnings were up 68% and sales increased 67%.  GNA is in the business of manufacturing several different types of steel bars, rods, and beams.  If GNA breaks above the high of the handle, $16.23 looks like a nice entry point.  Remember confirm with strong volume.

Please remember that 70% of stocks follow the market direction, so first lets make sure this new rally has some legs.  It's OK to get your feet wet but ease into this market right now until it PROVES it's ready to RUN.