F.I.T. Stocks Newsletter
Finding
High Quality Stocks to Build Healthy Investment Habits.
Date: August
7, 2010
Charts
Provided by Bigcharts.com
Fundamental
Research provided by Investors Business Daily
Stock Market Health
Market in Uptrend!
The stock
market remains in a uptrend as all of the major indexes ended with
increased gains for the week. The encouraging sign is that even with
the big losses on the employment front, the stock market was able to
fight back, on Friday, from the news with very little losses in the
major indexes.
In addition to
the major indexes looking strong, many F.I.T. Stocks have shown some
strong advances following their breakout from sound bases. Most of
these strong breakouts have been due to strong earnings reports. With
many of these strong breakout , have come strong volume behind the moves
suggesting big institutions are buying up solid growth stocks.
This week we
have one retail stock that is forming a sound base and the numbers look
really exciting also. Several F.I.T. Stocks have broken out on huge
volume, but no worries if you missed the buy points, just look for a
retreat back to the 50 day line or for another buy point as the stock
stalls out and consolidates.
STOCK
MARKET NEWS
The Major
Indexes remain in an uptrend . NASDAQ steps up 1.5%, the S&P and
DOW climb 1.8%.
U.S Loses
131,000 Jobs in July.
Retailers
sales drop below views for 3rd straight month.
Priceline
Crushes Q2 views by 53%.
Social
Security Pays out more that it Gets in Tax Revenue.
STOCK MARKET INDEX CHARTS
DOW JONES: 6
Month Chart with Daily Price Bars
The uptrend
remains intact, but volume has remained low since mid-july. This can be
typical during the summer months. Some positive signs have been that
we have once again made our way back above the 200 and 50 day moving
averages. The one bit of concern is that the 50 day line still rest
below the 200 day line. We would like to see a bullish cross over in
the moving averages. This would occur if the 50 day line shoots its way
back up through the slower moving 200 day moving average. Right now,
as you can see by the arrow furthest to the right, the two moving
averages are beginning to converge upon eachother. It may be a couple
of weeks before we see the actual cross over take place.
.
S&P 500: 6 Month
Chart with Daily Price Bars
The S&P
and DOW are following a common path. Once again we must be patient and
wait for a bullish moving average cross over which should come within
the next couple of weeks. The S&P may also have a little trouble
crossing over the resistance level at 1125. If we break back below the
200 day moving average line, we will need to see if the 50 day line
begins to curl back down. If this occurs we may be in for another down
trun in the stock market.
NASDAQ: 6
Month Chart with Daily Price Bars.
The NASDAQ is
running very similar lines to the DOW and S&P. As you can see we
have developed a mini uptrend in the Nasdaq, with a bit of resistance
at 2300. Prices on the Nasdaq are converging into a tighter and tighter
space creating the pattern of an ascending triangle. We should see
prices burst through this pattern with authority, in one direction or
the other in the coming weeks. Usually with a ascending triangle prices
tend to burst upwards through the top resistance levels. If this
occurs we would be in a very bullish mood. The next two weeks should
tell the tale. Until then we still remain in a mini uptrend .
TOP TEN INDUSTRIES
-
- Leisure
Travel and Booking
- Auto Truck
Replacement Parts
- Banks-Foreign
- Computer
Software Enterprise
- Auto Truck
Original Equipment
- Trucks and
Parts Heavy Duty
- Telecom
Service Intergrated
- Transportation
Services
- Commercial
Services Leasing
- Machinery
Metal Holdings
Important
Message:
Please
remember as you build your portfolio , you are trying to find the best
player for each position. Find the best stock in a leading industry.
DO NOT buy two leading stocks in one industry. We are trying to build
the dream team. One stock, one industry, then fill another position
depending on your portfolio size and money management guidelines. When
you list your F.I.T. Stocks selections, please make sure as you enter in
your trades that you have not already filled that position or industry.
F.I.T. Stocks Break Out Portfolio 2010
IMPORTANT EDUCATION:
Some of you, if you were more patient then the F.I.T. Stocks Newsletter,
may still be in GMCR, NFLX and CACC. If you are, congratulations, you
have made abundantly more profits. If you are like me and got out with
some handsome profits, but also left a lot of money on the table, go
back and review the charts and your investment journals to see if there
was anything you could have done better, Make any notes about
changes you would have made, things you would have down differently, any
piece of advice that may help you for the next time. Keeping a
investment journal is the best way to analyze progress and mistakes.
| Symbol |
Newsletter |
Breakout |
Base |
Buy |
Current |
STOP |
% |
Exit |
Exit |
Profit/ |
| |
Date |
Date |
Pattern |
Point |
Price |
Loss |
Change |
Date |
Price |
Loss |
| |
|
|
|
|
|
|
|
|
|
|
| NTY |
11/15/2009 |
11/16/2009 |
U |
42.53 |
42.78 |
|
1% |
1/21/2010 |
$42.78 |
0.25 |
| MELI |
11/22/2009 |
11/23/2009 |
Darvas |
47.93 |
52.72 |
|
10% |
12/31/2009 |
$52.72 |
4.79 |
| CACC |
12/6/2009 |
12/16/2009 |
U |
37.13 |
49.61 |
|
34% |
1/22/2010 |
|
12.48 |
| TPX |
2/21/2010 |
3/1/2010 |
FB |
28.03 |
34.79 |
|
24% |
3/16/200 |
$30.90 |
6.76 |
| GIL |
2/28/2010 |
3/5/2010 |
C/H |
25.33 |
28.48 |
23.56 |
12% |
5/4/2010 |
$28.48 |
3.15 |
| JCG |
3/7/2010 |
3/8/2010 |
U |
46.73 |
46.05 |
43.46 |
-1% |
5/4/2010 |
$46.05 |
-0.68 |
| TUP |
4/1/2010 |
4/5/2010 |
DB |
49.63 |
49.53 |
45.88 |
0% |
5/4/2010 |
$49.53 |
-0.1 |
| ANR |
4/1/2010 |
4/6/2010 |
C/H |
54.13 |
50.35 |
50.35 |
-7% |
4/16/2010 |
$50.35 |
-3.78 |
| ULTA |
4/11/2010 |
4/12/2010 |
F/B |
23.53 |
21.89 |
21.89 |
-7% |
5/4/2010 |
$21.89 |
-1.64 |
| GES |
4/11/2010 |
4/22/2010 |
F/B |
48.63 |
45.23 |
45.23 |
-7% |
5/4/2010 |
$45.23 |
-3.4 |
| MRVL |
4/18/2010 |
4/19/2010 |
C/H |
21.63 |
20.12 |
20.12 |
-7% |
5/4/2010 |
$20.12 |
-1.51 |
| DSW |
4/25/010 |
4/27/2010 |
U |
29.93 |
29.26 |
27.84 |
-2% |
5/4/2010 |
$29.26 |
-0.67 |
| SKX |
6/13/2010 |
6/15/2010 |
U |
42.53 |
39.56 |
39.56 |
-7% |
6/28/2010 |
$39.56 |
-2.97 |
| LCAPA |
6/27/2010 |
7/14/2010 |
C/H |
45.43 |
47 |
|
3% |
|
|
1.57 |
| |
|
|
|
|
|
|
|
|
|
|
| TOTAL
x 100 Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1425 |
Please review you
entry prices and stop loss limits.
PORTFOLIO
MANAGEMENT
Disciplined
Rules: If you notice our profit and loss statement above you can clearly
see the benefit to sticking with a set of sound investment rules. The
rules are simple: Find high quality growth stocks with strong
fundamentals, in a leading industry, forming superior technical chart
patterns. We enter into these F.I.T. Stocks during a market rally, set
our 10-20% profit target and take no more than a 7% loss. If you look
at the spreadsheet above, you will quickly notice that by developing a
set of healthy investment habits to follow, we were able to test the
market, we were only right 50% of the time, yet we have turned a
profit. The key is we got out when the market and our stocks told us to
get out, we followed our investment plan, we built healthy investment
habits and we have come out ahead of most investment professionals. You
can be successful in the stock market it just requires a strong
investment plan and the courage and discipline to follow it.
Please
remember to stick with your investment plan, be disciplined, monitor the
price and volume daily and make money.
The F.I.T. STOCK PLAN
For a company
to make the F.I.T. Stock dream team it must meet 3 stringent criteria:
- F
- Fundamentals must be Superior - Its all in the numbers, earnings,
sales, profit margins, and return on equity must be increasing on a
quarterly and annually basis.
- I
- Industry, Innovation or Institutions - The company must be in a
leading industry, have an innovative product or have institutional
buying.
- T
- Technical Charts - The stock charts must show strong base patterns
such as: Cup with Handle, Flat Base, Double Bottom or the U Turn
patterns.
F.I.T. STOCK's TO WATCH
NEW
Stock: Steven
Madden
Symbol: SHOO
- F
- Fundamentals - 9.9 Earnings: +59%
Sales: +36%
- I - Industry - Apparel Shoes and
Related Avg.
Volume: 406,800
- T - Technical Charts - Cup with Handle
Pivot or Buy
Point: $41.13
Stop Loss: $38.26
Profit 1:
$45.24
Profit 2:
$49.35
Steven Madden operates 89 stores fashion footwear stores nation
wide. The shoe retail industry has remained strong with a ranking of
22. Its current quarter earnings were up 59% and sales increased 36%.
Currently, Steven Madden rest within a beautiful Cup with Handle pattern
and is now 2 weeks into the handle portion of the base. The volume on
the far right side of the Handle looks spectacular. If the Nasdaq
continues to move up, and SHOO can break above the buy point of $41.13, look to jump in on strong volume.
Happy and Healthy
Investing,
Steve Martin
www.fitstocks.com