|
PureBytes Links
Trading Reference Links
|
All,
I spent a lot of time looking hard at my indices yesterday and
today and decided that the NASDAQ, NYA, OEX, and SPX indicators were
all rising off of negative peaks which is an indication that the last
low was the bottom for this correction. Of course, this might not be
right, but if it is, I want to lower my cash position. To do this I
looked at the other stocks on my watch list to find another to add to
my portfolio. I had a hard time choosing among Concord EFS, Hartke
Hanks, HBO & Co, and WorldCom. I wanted a NASDAQ type stock and ruled
out WorldCom because it was in the same industry group as Ericsson.
Of the others, I liked Concord EFS and HBO & Co (HBOC) charts the
best. I finally decided on HBOC because I liked the diversification
of adding a stock in the medical services software business.
HBOC at 32 3/4 is a momentum play that's in short, intermediate,
and long term up trends. It has been in an up trend for over seven
years with the only pauses being sideways moves within the up trend.
It broke out of a shallow CANSLIM cup formation Wednesday on good
volume and shot up to an all time high of 34.93 at Friday's open
before pulling back to close only a point above the breakout level.
After the breakout, I constructed a new steeper Short Term Up Trend
Channel (STUTC) with the top at 37 and the bottom at 30 1/4.
>From a fundamental view point, It does have the high P/E of 79 and the
high Price/Sales ratio of 10.47 that is characteristic of momentum
plays. However, it also has no debt, 20% insider ownership, 26%
annual revenue growth, and 75% annual earnings growth. I'll take a
long position at Monday's open. I won't set a target until the STUTC
firms up more, but will set my stop at 29 3/4.
Jim
|