Wednesday, October 31, 2007

Crocs gets bit, but guidance is strong

Crocs "disappointed" the street by reporing EPS of $0.66, but that's in line rather than an actual decline. Still, I'm feeling the bite as the stock is down more than $11 from the shares I picked up an hour ago. I'm holding, though. Why?

• Crocs "executed several important initiatives that have strengthened our operating platform, namely the opening of a new 320,000 square foot European distribution facility that will allow us to better support our future growth in the region," CEO Ron Snyder said. The buildout of this facility is key, and obviously the cost cut into the Co's bottom line. Not a whole lot different from Google's mass hiring of engineers in Q2, and that led to a big selloff of stock by the street. GOOG has rebounding rather nicely since then, I'd say.

• Raised guidance for Q4. "For the year ending December 31, 2007, Crocs raised its guidance. The Company now projects revenues to range from $820 to $830 million and net income per diluted common share of between $1.94 and $1.98."

• Raised guidance for 2008. Snyder: "The Company also introduced fiscal year 2008 guidance. Crocs currently anticipates revenues and net income per diluted share toincrease between 35% to 40% over the projected 2007 levels. Mr. Snyder concluded, "Our year-to-date performance has been marked by significant gains in sales and earnings, robust international expansion, a number of high-profile licensing agreements, and the continued build out of our global infrastructure. Even as we achieve record results and reach important objectives in our financial, strategic, and operational development we are confident that we are positioned well for continued growth in 2008."

Chipotle stuffs the shorts again

In case you missed it: Chipotle Mexican Grill again served up a hearty plate of huge growth yesterday. Moving CMG up from A- to A, with a side dish of caution due to the forecast of increasing food costs. But this Co, no question about it, is kicking tail and then roasting it, too. Organic tail, that is.

Chipotle Dishes Out Another Big Quarter: Net Up 72%, Sales 36%, Beating Views

Big Ben adds lemony flavor into retail

I'm overweight in lululemon, and was underweight in Crocs, so getting more CROX — even as it trades above its moving averages — was my next move. Particularly with earnings for Q3 out after the bell. But LULU was down to a low of 48.51 yesterday. It is a stock that was in a freefall since hitting an insanely beautiful high of 60 recently. Before the run to 60, LULU had begun a drastic fall from 48 to 41 in a span of just two days. Then came the news of great same-store sales for Q3, and thus, guidance to the street that estimates could be doubled from teenish growth to 30ish percent growth.

The fall resumed, and yesterday was an ideal buy point for the courageous. The stock was well below its 10-day simple and exponential moving averages. Today? The Fed's rate cut aids retailers as much as any stock, and LULU is up to 51.70, still below its 10-day SMA (53.59), but I don't think that will be much of a barrier for long. Thirty minutes ago, before the Fed rate cut announcement, LULU was at 50.

Reunited and it feels so good

Finally. It's been a long time since I added more Crocs, just as long as I've bought my first pair of Caymans. Added, actually doubled, my meager position at 73.60. No, it's not as nice a price as yesterday, when I debated whether to get more at 72 flat. But now that Big Ben has said his piece and the market as digested it nicely and quickly, CROX is where am comfortable.

Earnings out after the bell and everyone knows it'll be blowout city. As Georges Yared wrote recently, the Co gets 50% of its revenues overseas. Slowing US economy is not a major issue. Unemployment number is still fairly good, people still have buying power, and they're showing signs that they are selective. Crocs are durable, anti-bacterial, anti-smelly and Croslite comfortable. I think I'll reward myself with a new pair, maybe one of those stylish designs.

Tuesday, October 30, 2007

Pre-earnings dilemma for CROX longs

Finally got out of Longtop Financial Technologies (LFT), which means, of course, that the stock will begin rallying tomorrow. I won't be sad. There's no news coming from LFT for awhile, and I wanted to not only get out of my worst trade of the quarter, but I also wanted to free up some funds.

Is this the right time for more CROX?

Crocs will announce Q3 earnings after tomorrow's bell. I'm underweight in one of my favorite stocks, but the run-up from last week's plunge into the low 60s has been drastic. CROX traded above 73 today before closing at 72. The stock is above its moving averages, has already made a big run from the low 60s last week, and tomorrow is not exactly enticing in general. The Fed will announce tomorrow whether it will cut the rate 25 or 50 basis points, or at all. My guess is 25 points, but nothing's guaranteed. Plus, the market has already anticpated 25 points.

Why Crocs would choose tomorrow as earnings day is baffling. And that makes any buy of more shares today a risk. Normally, I would just go for it. But if the market in general is skittish tomorrow, CROX may dip below 72 or 70. I could get cheaper shares, or continue to wait. I love my Crocs, but it's been an eye-opener to see the stock, along with another favorite in Nintendo, run up in recent weeks as I dabbled in other equities.

I've got some non-realized gains in a number of great stocks, but I've also bungled with STV (didn't take my profits with 70% gain) and LFT (23% loss). Had I just parked in CROX and NTDOY.PK a month ago instead of dabbling with relatively unproven companies, things would've been more productive in a simpler manner. Still learning as I go.

Monday, October 29, 2007

Picking right means squat without tight stops

Most of the screen is green. I tried those other background and font colors, but I always return to "Wall St" black with green and red fonts. And today, it's mostly green.

CROX 72.00 +3.02, 4.4%
VMW 119.90 +7.81, 6.9%
YGE 37.12 +2.73, 2.7%
BIDU 366.89 +13.50, 3.8%
RIMM 121.65, +1.84, 1.5%
NTDOY.PK 77.89, +2.51, 3.3%
AAPL 184.98, +0.28, 0.15%
MCD 59.18, +0.71, 1.2%
UA 60.10, +0.53, 0.9%

Then there are two stocks that I am out of my freaking mind about.

lululemon (LULU) 50.00 -0.4%
Longtop Financial (LFT) 26.76 -3.19, -10.6%

I entered LULU a couple of months ago at 38, added later at 47, and the stock eventually ran to 60 on the company's raised guidance for Q3. By then, I'd fallen in love, didn't even consider the possibility that 1) the stock had run way too fast, way too high to sustain any level near 60, and 2) selling at least half of my position wouldn't kill me. But boy, like a fool in love, I held all the way down and today, LULU is at 49.50 in after-hours trading. That's about 17% down. This stock won't announce earnings for several more weeks. It has a history of taking a deep plunge (see the stock's movement before the Q3 raised guidance).

Lack of discipline, no lack of arrogance.

Longtop Financial (LFT) was a bust from the start. I was away late in the day, missed the IPO's run-up from 25 to 32, and when I got back home, I was a fool and chased it. I got shares at 33.70, saw the stock run to 36 in pre-market the next morning and I got way too comfortable. Instead of running wild like China Digital TV had done the week before, LFT reversed field and started running toward its own end zone. Words cannot describe what I wanted to yell at this clown stock, going backwards on the football field. But the real clown was me. Instead of putting in a stop-loss (since I obviously have problems following through on mental markers), I saw it drop this morning from a high of 31.22. I kept thinking, well, the market is up, LFT will follow eventually.

Nope, didn't really happen. Some fake-outs, yes. But late in the day, after struggling to get back up over 29, LFT plunged below 27. At this point, it was way too late for me to sell. I know there's a bottom somewhere in this vicinity. The sell should've been 7% below the top (36). That means my stop-loss would've been 31.80 or so. Note to self. Cut losses fast and clean, fast and dirty, fast and any way. Just do it fast. Set the order and stop the bleeding.

It's ridiculous what my lack of follow-through does. Ten of my 13 stocks were up today, but my portfolio is up only 0.76%. A part of me thinks I'm getting closer to becoming astute, holding my long-term stocks without fear, and trading short-term stocks with a firm grip on the leash. Then LULU and LFT happened, preceded by STV's drop from 55. That shoud've warned me, of course, of this pattern in my behavior.

I did manage to unload the remaining half of my STV position, netting a profit of about $2 per share. (Nothing like what I would've had at 50 to 50, but better than a loss or a case of stomach flu.) So I did something right today. But man, I have a long ways to go before I can truly be Master of my Domain, and you know which domain I'm talking about.

This ineptitude of mine could happen again. Of the 12 stocks I still have, only VMware, Crocs, RIMM and Apple are the ones I plan to hold for years. The rest have to be carefully monitored and set to sell on stop losses, much as I used to abhor the method. I'll cool off and cut myself a bit of a break between now and tomorrow morning. After all, I prefer to buy and hold great stocks, not trade them in full or by halves. But I know my charts, and I'm getting more familiar with behavior in RIMM, for example. There are entry points worth waiting for. I'm better at bargain hunting than anything else.

So, perhaps the solution, the realistic approach with my tendencies and belief system, is to prune my portfolio significantly and focus on no more than 5 stocks. Trade a half-position in some, maybe all. that would increase risk if my analysis is wrong, but I'd rather be wrong with Apple than Longtop Financial.

More food for thought as I head to the car. Slicing off some of my stocks wouldn't be so bad going into the Fed meeting (tomorrow and Wednesday, according to CNBC). My positions in MCD and UA are very small, just for my nephew.

The whole swing trading thing in the past few weeks has been a mixed bag. I'm break even there. All my good, fairly well-timed entry points have been solid. But it's the few that have killed my profits. And it's all because I have hesitated to be as aggressive with keeping my profits as I am with finding great stocks and bargain-rate entry points.

Enough. It's time for a break.

Morning Glance: Green is good

Quick glance at today's bump up...

lululemon athletica responding to its recent bottom (50) and is up 4.2% to 52.58 on low volume. Whether this holds, we shall see, but I am still as bullish as ever on LULU.

Crocs moving up, also, now at 72, an all-time high. If the pattern persists, earnings will be announced around Nov. 14. I want more shares cheap, which could happen within these next 16 or so days. I hope.

VMware is on the move, up 3.2% to 115.75. As sure a buy as any I've made in the past two weeks. Wish I had more! ... Baidu also up 3.4% to 365.

Yingli Green Energy is up 7.4% to 37, also an all-time high, thanks to the price of crude oil. A lot of talk on CNBC about traders in the pit expecting a fall in crude prices soon, too much frothy money from hedge funds, yadayada. Even if crude falls, I will hold my YGE position. Solar in China will be one of the winners.

YGE broke out on Friday, looking somewhat similar to LULU when LULU broke out over 38 several weeks ago. I wouldn't doubt that YGE can catapult into the 50s as quickly as LULU did, but I'd wait for a pullback, even as oil surges higher.

China Digital TV and Longtop Financial are duds this morning. STV is relatively flat, up 0.8%, par with the NAS. LFT is down 3.6% to 29. Arf arf, I might get out of that and buy more CROX, Nintendo or VMW on a dip.

Whine of the Morning: Still wishing I bought CNOOC (CEO) back in the 90s (August) when the P/E was 11. Waah. Friggin waah.

Friday, October 26, 2007

China + Solar = Profits

Chasing is rarely wise, but Friday buys have been good to me. I sold my small Garmin position at $117.20 and came out with a profit of $9.30/share. Not a big profit of course but there are 2 main reasons for the sell.

1. raise some buying power to get YGE, which I bought at $34.57 before after-hours trading closed.
2. too many questions about Garmin's relationship with Navteq. Earnings report is Wed., and if GRMN does not have a long-term solution for a mapmaker, we could see a selloff. I'll wait until they have a solution. Otherwise, they're still a good company and I'm probably going to get more shares after the dust has settled.

Solar + China is a solid combination, particularly with crude oil above $91 now and unrest in Iraq (Turkey). I keep writing about how much I like the energy sector, but now I'm finally acting on it. Yingli closed at an all-high today on heavy volume. The volume wasn't humongous, so I hesitate to label this a breakout, but market in crude oil and the politics in Iraq/Turkey are strong enough for me to move on YGE.

More Lemon?

At $50, lululemon athletica has filled most of the gap and is at its lowest point since the Co announced that Q3 comparable-store growth will be more than 30% (year over year) rather than in the teens. The run up was explosive, and the stock spun out for the last four sessions after hitting a high of $60.

Where does LULU go from here? It's below its SMA and EMA (both are $52) and it's very tempting to buy a small position here. LULU could still dip to 48, and 47 is where the stock closed on the day of the Co's recent news. With earnings nowhere near in sight — my guess is that we're about five weeks away — it seems that this is a news-driven stock. No news means more decline. Watching the lemon closely here.

Energy Trade: Crude Behavior

Crude oil is over $91. Turkey is poised to snuff out the Kurds (Iraq). Fear prevails and oil goes up. What's the trade?

• Yingli Green Energy (YGE) broke out to a new high above $34 on heavy volume. This is a stock I've followed for a few months, but never took a dip into the water. Of all the potential energy plays I like, YGE is the smallest cap but also one with the most potential to double. It was $20 in mid-September, but volume and price have been explosive.

• Potash had a great earnings report this week, and as long as ethanol is a factor, POT will keep rising. The Co says that global fertilzer demand remains at a high, and though the stock is at insane levels, the growth is real.

• PetroChina, even at $245, has been consolidating for the past week or so, and is now trading at its short-term (10-day) moving averages. Dare I say this is a buy? Perhaps, but only with a small position. PTR is the golden child of Big Red. In other words, practically money in the bank. Who has more leverage in the world than the Chinese government and economy?

• CNOOC (CEO) is my favorite of the oil and natural gas companies, but is trading well above its moving averages.

I would love to grab shares of YGE, but I'm out of dry powder unless I sell my positions in China Digital TV (stuck at 39) and Longtop Financial Technologies (can't stay above 30).

Baidu launches into orbit

Baidu is up $20 with a couple of hours left in today's session. Quite a reversal from yesterday's after-hours trading when BIDU plunge to $300, then finished up at $320. So what was the deal yesterday after hours? The earnings report was positive, if devoid of huge surprises. Was it panic selling? Market makers manipulating their shorts? Maybe.

I'm just glad to have a few more shares of a Co I've touted for some time. Now if I only could turn back time and buy shares of CNOOC. How I pounded the table back then when the P/E was 11 and the PPS was 90. I never bought a share. I didn't know oil stocks could be so

What else is up this morning? Just about everything. Even though there were naysayers who cautioned about Countrywide Financial's earnings report and how it could dampen the market, nope, nothing bad happened. The market already anticipated a mess, and then Countrywide was basically positive. Wow.

Under Armor continues its ascent, trading up 6% to 60. UA was 54 a few days ago, but I held on, not for me, but for my nephew. He wanted some shares of one of his favorite companies, and I obliged.

Crocs was at 65 yesterday, well below its 10-day moving averages. A clear buy signal for a true 'box' stock. Well, CROX is now above 68 again. VMware is pulling back to no surprise. I'm waiting for lululemon to finish building this new base at 50 and rocket again. Might be waiting until they announce earnings in several weeks from now. No matter. When (and if) the Fed announces another rate cut next week, retailers will ride the bounce nicely once again.

Thursday, October 25, 2007

Lessons for an undisciplined trader

This recent foray of mine, to do some swing/momentum trading, is turning into a pain in the ass. As the cliche goes, you're only as good as your last trade. For me, that would be a major El Stinko!

Perhaps I was far too confident. Not cocky, but overly confident, so much so that the notion of a stop-loss order was hard to comprehend, let alone execute. It had been awhile since I'd picked a loser, but my methodology has applied to long-term holds in my favorite (A grade stocks). By delving into more stocks during earnings season, there's a lot less substance involved. Cases in point :

• China Digital TV wasn't an earnings play, but an IPO that captivated me. I entered this stock on Day 1 and Day 2 at 29 and 32. It promptly ran to 55 within a week, and I even got a few more share at 51 along the way. Inevitably, the stock sank once momentum ran dry. Instead of selling at 7% (or whatever number) from the top, I held all the way down to 39. I sold half of my shares yesterday, thinking I was wiser as a result. The result: With an average cost of 35, this was a mediocre win.

• VMware seemed as good a pick as any for such a young stock. Love the growth rates, the niche, the history being born out of EMC. As close to a lock as there is going into earnings. Result: My buy at 97 is profitable. VMW traded at 113 today. A clear win so far.

• Feeling good about my recent buys, I opted to enter Longtop Financial, but I was way too late. Because of work, I missed the final hour of LFT's amazing run at the end of Day 1. I got home to find that LFT was no longer at 25, 26 or even 27. The stock was at 32 and climbing in after hours. Instead of leaving it alone as I normally would with any runaway stock, I chased and bought at 33.70. Bad move. Today, the stock ran up in pre-market to 36, but sold off after the opening bell down to 28. I should have just sold at 34 and broke even at worst. Now I'm holding the bag. A freaking bagholder. The only silver lining out of this is that it's not a big position. I feel foolish nonetheless. Result: Down 10%, a definite loss so far.

• As if LFT wasn't bad enough, I also bought a few shares of Baidu at 337. A lock for blowout earnings, I felt. Here, as with China Digital TV, VMware and Longtop Financial, I was not buying based on the technicals of the chart. (If I had, with BIDU well above its moving averages, I would have stayed out.) So, Baidu announced OK earnings today, and the stock immediately plunges $20 in after-hours trading. It will be worse tomorrow. Baidu will eventually come back to 337, maybe tomorrow afternoon. Maybe next week. Maybe in December. Whatever the case, it's dead money for now and I am done doing the yo-yo thing with earnings.

• And then theres lululemon athletica, which has plunged from 60 to 51 in mere days. 60 was not sustainable, not without real news since the Co guided the street higher for Q3 earnings last week. It was just a couple of months ago when the stock was mired in the 30s. I entered this stock with a trade in mind, though I was (and still am) impressed with the company's potential. However, the rapid run-up should've had me on red alert. At 60, I should've established a stop-loss sell order for half of my position.

I'm not altogether mad about the slipapge in LULU. At 51, it is now below its 10-day SMA and EMA, and if I were out of this stock, I'd be real close to buying in here.

But more and more, I'm starting to think of everything outside my A+ and A stock picks as trade bait and only trade bait. I'm not 100% there yet, but the day is coming. I may have to embrace the volatility rather than rebuke it.

Wednesday, October 24, 2007

Swing trading RIMM: Can it work?

The combustability of the subprime bust/slowing US economy vs. booming global economy/robust tech earnings/Fed rate cuts is unprecedented. Volatility is off the Richter scales. That's why someone who believes firmly in buy-and-hold (me) has to explore the possibiilty of using a half-position to sell at tops and buy on dips. Research in Motion is a prime example.

Since the Fed rate cut in early September, there have been clearly visible opportunities to buy and sell by examining moving averages on a chart.

• On Sept. 7, RIMM dips below its 10-day simple and exponential moving averages for the first time in nearly two weeks and closes at 80.48. The stock reverses the next day on lower volume (not a good tell), but continues to climb up through its moving averages to a new high of 93.24 (intra-day) on Sept. 19. The stock drops a bit the next day on lower volume (again, not convincing) and a sell could have been in order. A hold, however, would leave you in RIMM as the ride resumed the next session all the way to another new high of 100.98 (intra-day) on Sept. 27. The next day, however, brought a decline on larger volume; finally, a clearly bearish indicator and a definite opportunity to sell.

• Four sessions later, on Oct. 3, RIMM slipped back down and met its 10-day moving averages for the first time in three weeks. At a close of 96.28, a debatable buy, but one worth considering since the stock finished up by a fraction and Q3 earnings were just 24 hours away. The next day, after the close, RIMM anounces blowout earnings and raises guidance. The stock gaps up to a new high at the open (107.66) and continues to push upward on its heaviest volume since Sept. 29, 2006. On Oct. 5, the stock hits a new high of 114.76 intra-day, but pulls back. A 2% stop loss gets the astute trader out before the stock pulls back and fills the gap over the next seven sessions.

• On Oct. 16, a wobbly RIMM opens at 107.23 and sells off a bit more to 106.64, its lowest price since the big gap up on Oct. 3. Here, the stock dips well below its 10-day averages, signaling a buy, and finishes the day at 110.09. RIMM continues upward for two more sessions to 117.92 (intra-day), but on Oct. 19, sells off on heavier volume to a close of 114.97. A stop-loss set 2% below 114.97 gets the astute trader out again.

• On Oct. 20, RIMM dips below its 10-day SMA intra-day, a low of 113.71, indicating another buy signal. The swings are clearly becoming tighter. What once took days to peak and dip now takes just one or two sessions.

Nonetheless, by the next session (Oct. 23), RIMM peaks at 128.36 intra-day and closes at 124.53. The pop is driven by RIMM's announcement that the BlackBerry is being distributed in China. Again, a 2% stop loss from the high triggers a sell. A quick, but highly profitable trade.

There are, of course, flaws with this approach. RIMM could trade down 2% at any time during the course of a day, triggering a stop-loss sell perhaps a half-dozen times in one session. It would be much more prudent to use a mental stop-loss instead of a pre-set one, at least for traders who have the time to watch the ticker/Level II/etc. and are willing to gauge the ebb and flow of the day to tweak a sell point below or above 2%.

This method is something I theorize about, and is therefore worthless until put into action. If and when it actually works — and I don't think it will ever be perfect, of course — I'll document the results. I would not consider trying this for any other stock, except perhaps AAPL and GOOG. Maybe CROX, maybe BIDU. But the chart for RIMM shows so much consistency, it's utterly remarkable.

The market won't be like this forever. The fishing is really good for the traders who have a winning system and a willingness to cast a line. It's something worth paper trading, at least. Doing the math with conservative buy and sell points, the gain would have been 51% on these examples I listed. Sure looks good on paper.

Munarriz responds to bubble-mongerers

Like this piece by Rick Aristotle Munarriz about China.

Get Into China While You Still Can

If you're in mainland China, overbidding for crappy companies in a manic exchange, I'm with you. Dump the tulip bulbs and run. But don't be too quick to judge some of the better companies by their covers, much less their trailing-earnings multiple.

Train goes through Xinhua

Xinhua. I am in Xinhua Financial — better known as Longtop Financial Technologies — at 33.70. Not exactly a great entry point, but I think as far as IPOs go, this one has a good chance to keep climbing for a few days. Got out of NILE and sold half my position in STV to enter LFT.

Though the Co has strong potential, catering to financial services in China, I view this through trade-colored glasses only. I just lament that I was away at work during that last hour of the session, when the stock was went from 27 to 32.

More Baidu on the dip, passed up more VMware

Argh, had to go to a meeting an hour before the market closed today. Added a few BIDU at 336.97. Sound frothy? I liked the dip today, and earnings are out tomorrow. Baidu has been one of my favorites for a while, though I had such a tiny position that it didn't correlate with my perspective.

Longtop Financial ran big from 26 mid-day to 32 at the close. I couldn't zoom in on this Chinese IPO stock because of work, but I'm watching it closely now.

By adding more Baidu, I passed on a chance to get more VMware at 105. Now that VMware's earnings are out (18¢ EPS vs. the street's estimate of 6¢), the stock has hit a high of 113 in after hours. To think that there have been so many doubters of the Co with the remarkable technology, it's astounding. I'll keep an eye on this decision: VMW at 105 vs. BIDU at 337. Can't say, at least right now, that either would have been a bad buy.

LULU battle ensues at 53.80

The battle lines for the territory of lululemon athletica have been drawn. The stock is down 6.6% today, far more pronounced than the rest of the market. DJ down 152 points (1.1%), Nasdaq down 64 points (2.3%), S&P minus 22 points (1.5%). But LULU has been on a tear since its breakout on October 16, when it roared from 41 to 47, then to 53.80 on consecutive days. There has been, really, no fill since then as LULU went to 60. That's a gain of nearly 50% in less than a week.

At 53.93 this moment, the stock is at a critical boundary line, a chance to find shelter at this support level ... or plunge again. At 10% down from its high (60), I think LULU stabilizes here. If not, I'm still holding on for the ride. Well, not for the ride. I'm holding on because this is a long-term hold. Not many companies have guided the street higher on Q3 earnings. I just happen to like a lot of the ones, like LULU, that have.

Tuesday, October 23, 2007

Big down, big up ... now what?

Just a list of possibilities to keep my fried brains in line for tomorrow's market.

a. Buy more BIDU (345) before Thursday's earnings report.
b. Buy more RIMM (120), which ran wild on China distribution news to 128 before pulling back.
c. Buy more AAPL (183) after big earnings gain run-up.
d. Buy more VMW (107) before tomorrow's earnings report.
e. Buy more CROX (67) while the price is fairly low.
f. Buy more NTDOY (70) while the price is fairly low and holiday season nears.
g. Buy GOOG (670) for the first time.
h. Buy ISRG (300) for the first time.
i. Buy more STV (40).
j. Do nothing and just wait.

Best move is no move. We had a big selloff on Friday and part of Monday, then a major reversal part of Monday and today. Nothing is cheap, but CROX and NTDOY aren't priced too high. Waiting will also give me time to do some homework. Longtop Financial (LFT) looks a bit interesting; the IPO is on tomorrow.

IPO Home: Longtop Financial Technologies (LFT)

China Digital TV (STV) seems to ride (or drag) on the coattails of Baidu. Without any earnings report in the near term, I don't know if STV will sustain its recent gains after Baidu announces on Thursday. If Baidu does not blow out estimates, the entire China sector could dip (with the exception of energy/oil stocks).

And this: Is there really anything to the notion that blockbuster earnings are announced early in the week for full effect, while weak earnings are held back to the end of the week to minimize investor backlash? My gut says Baidu will report another strong quarter, and CEO Robin Li is one of the best. But the time to get more Baidu was on Friday, and I chose VMware instead.

No more fishing in the Amazon

I confess. I'm not happy with my Amazon trade. I'm not mad about it, either. After watching the stock rise to 100 before the close, Amazon's earnings report underwhelmed, if a robust revenue boost can be gauged that way. That's what happens when a stock gains 10% before the close; the profiteers showed their colors and took theirs.

Of course, from 96 down to 90, there were some sellers who took a loss on their Amazon daytrade. Me? I handled it wrong, selling at the bottom after hours, but as long as I was even or above water, I was and still am content to get out of the stock. Why? Amazon is one of those stocks that just sits between earnings reports. Literally, a price percentage range of one digit. Nothing wrong with that, but this is a bull market, full of swings, rich with fast, big gainers. Sitting in Amazon, even with a tiny position like mine was, didn't measure up. I got out. The stock ramped up to 93 before the conference call, and since the call, has waffled between 91 and 92.

I do believe the Co when it says that guidance has been raised for the holiday season justly. I just won't wait around for the stock to mirror Christmas sales. There are just too many ripe growth stocks to get a slice of. Companies with growing margins as opposed to shrinking margins like Amazon's. Enormous P/E, bloated stock ... Jabba the Hut may have entertainment value, but he hangs out with Amazon and Under Armor too much for my taste.

RIMM's Great Leap Forward

Days like today are a vivid reminder of why I like to buy and hold my favorite stocks. Somewhere around 6 a.m. (Hawaii time) I fell asleep, and at the time, my position in Research in Motion was lagging a bit. No surprise. Earnings came out a few weeks ago, and the stock was resting as the rest of Nasdaq showed plenty of green action.

I woke up a few minutes ago (9 a.m. Hawaii time) to find RIMM at the top of my percentage gainers. Not just at the top, but far above Apple. RIMM is up 11% to 126, off its high of 128. Before I could look the news up, CNBC said that the BlackBerry is officially being distributed in China. No wonder! I suppose the RIMM bears can shut up now, what few are still around.

The RIMM chart is amusing. The stock shot up precisely at 8 a.m. here (2 p.m. Eastern). Maybe even more entertaining is the fact that Baidu, China Digital and Amazon have higher percentage gains so far today than Apple, even as Apple trades $13 up at $187 after yesterday's buttkicking earnings report. I had debated on Friday whether to buy a few more shares of Amazon, Baidu or start a position in VMware. Looks like Baidu would've been the right choice. VMware is up 3.9% and I have no complaints since getting a few shares at $97.66; VMW is now at $106.38.

There are a lot of astute traders who enter stocks prior to earnings and get out immediately afterward with their profits. They would've missed today's Great Leap Forward by Research in Motion. I'm just glad to be a vested spectator from the outfield seats.

WSJ: BlackBerry + China = Stock Goes Crazy

Monday, October 22, 2007

lululemon in a rising tide of Cool Factor

When the market is confused, the tide brings all down. Well, not all. Not Google after a hot-hot-hot earnings report. But when the downturn in the market reverses, guess what? The stocks that climb up most quickly often have the Cool Factor.

Apple is cool. Now trading at 187 in after hours. I have used only Apple computers in the past 4 years and will never go back to PCs. What else is cool? Research in Motion. The BlackBerry is cool and addictive, apparently. Garmin's GPS is everywhere. But then there's retail cool: lululemon athletica. Cool to average middle-aged men? Nope. Cool to hip, workout women who like to look great even in their down time. LULU is trading at 58.49 in AH. Pretty quick after dipping to 51.41 early in the day. Last week's heavy buying in LULU was met with little selling through the market pullback. Street money entered the stock, and I believe more street cash bought in this afternoon while the stock was at 54. Volume in the final 2 1/2 hours was heavy.

lululemon is a classic 'box' example of a stock that moves up in stages, but the bottom line is that raised guidance (last week), great product and the right demographic will knock the ball out of the park in a bull market. LULU is in front with the fastest growers.

Raising Apples to the sky

Apple announced earnings and blew everything out of the water. The Co even raised guidance by 3¢ higher than what the street expected, from $1.39 to $1.42 per share.

The stock is now trading at $181 plus in after hours. It had been at $175 before CNBC reported the numbers.

I've never rated a stock above A grade until now. With the raised guidance and blowout earnings, Apple is now an A+ stock. No question about it. Along with Research in Motion and Intuititve Surgical — both tore up earnings and raised guidance — and Google, there are at least four A+ stocks. Google doesn't guide the street, but the Co is a distinctly rare definition of A+.

Sometimes sleep is good

Three days, well, actually closer to 2 1/2 days, have passed since I dipped my toes into VMware for a smallish position. This morning, as I fell asleep in front of the TV, I slept right through the first hour of the market. Happens. Good thing I did.

Turns out I was a tad bit early on VMW. After buying it at 97.66 on Friday (after hours), the stock sold off this morning. Very similar to Crocs. VMW dipped below 92, then made a rocket-like run to 98 plus within an hour. Talk about fickle! The stock has leveled out, early hit 100 in the past few minutes and is currently at 99. That's an opening hour I'm glad I didn't see. The stocks with earnings out these next few days are turning out to be in good shape even as the Dow is still down and Nasdaq is fighting to stay in the green.

With earnings out after today's session, Apple ran up +$4 earlier, which had me thinking about how futile it can be to fight the trend. Apple's my favorite stock, had my favorite product (and it's not the iPod or iPhone), and I added VMware instead on Friday. On the other hand, I'm glad I didn't buy more CROX at 66-67, since it dipped below 61 this morning — a steal. CROX is back up a bit at 64 now.

Signs that the selloff is waning, no question. The doomsayers got their say and the sun is still shining. Well, maybe not here yet(still dark here in the islands), but I'm not about to short sunrise nor anything else.

Friday, October 19, 2007

First taste of VMware

Tough decision, not so much whether to sell, hold or buy. More like, which one to buy: AAPL, VMW or BIDU. All three report Q3 earnings next week. I went with VMW.

1. Down 15% from its high of 114.
2. No serious competition in its field.
3. Global PC explosion.
4. Still a new stock (IPO was in August) that will gather accelerating coverage and institutional buying.

Entry point VMW @ 97.66. VMware reports on Wednesday. The market could continue declining next week, but VMW is a cash cow. So is AAPL, but VMW is the bigger grower short term. I love all the fundamentals, the margins, the numbers period.

From Q2
• Margins: profit 13%, operating 16%
• Growth: quarterly revenue (yoy) 89%, quarterly earnings (yoy) 125%

Debt ($800 million) outweighs Cash ($280 million), the only negative, and the only reason why I have VMware rated an A- stock rather than an A. I'm willing to pay (with a small position) for early entry into a great growth company.

Too early for cheap buys?

DJ -366 (-2.6%)
NASDAQ -74 (-2.6%)
S&P 500 -39 (-2.5%)

AAPL 170.80 -2.70 (-1.9%)
Apple reports on Monday. My favorite, an A grade stock. If they can thump the estimates and raise guidance, AAPL becomes an A+ stock. Still trading above its 10-day SMA (168).

VMW 97.74 -3.81 (-3.75%)
VMware reports on Wednesday. May sell off on good or bad news because of the run from 50 since August. I'm late to this stock, but I understand the strength it has in its industry — its dominant stance. Currently an A- grade stock and it's trading below its 10-day SMA (101). Big run, decent pullback, hugely popular. That means it won't stay down long. Very tempting.

BIDU 314.75 -5.25 (-1.6%)
Baidu reports on Thursday. Google's upswing since yesterday's earnings report could (should?) have a mirror effect on Baidu, right? Why would it have a positive effect on earnings rather than today? (Maybe the selloff was just too strong and broad.) I'm split on that notion. Nevertheless, BIDU has a shrewd CEO in Robin Li, and I don't see him disappointing the street as long as he's got Big Red backing the Co up.

Baidu is trading below its 10-day SMA (320), which sounds preposterous considering this was at 161 on August 16. (The 50-day SMA is a bit more reasonable at 254.) Tempting here, also.

Looking back, I should've sold Blue Nile and China Digital TV when I had nice profits. I bought NILE at 80, it ran to 106, and now is back at 81. I bought STV at 29, 32 (and 51). It ran to 55. Now it's back to 39. Some positions are holds. Other positions are trades. These two should've been trades.

NILE is trading below its 10- and 50-day SMAs, but I hesitate to add more here. Even if I disagree with the downgrade (Citigroup) and even if I don't pay mind to the insider selling, the market is less than pleased. Can't fight the trend, can't add more here. I'm holding my little position.

STV is a long-term hold, but I would've profited by selling half my position high. The pullback for a recent IPO is almost destined. But I will hold on here.

Amazon is taking up space in the portfolio. I got in at 89, which is where it remains today. Though today's selloff hit tech and retail hard, AMZN lost just 10¢. The stock moves drastically only on earnings. The astronomical P/E keeps the stock on a leash for most of the quarter. I may get out of AMZN to raise a little more cash. OK, scratch that. I just realized that Amazon reports on Tuesday. Very interesting.

This isn't exactly a bargain sale here, but I've become severely underweight in two of my favorites, Crocs and Nintendo. Haven't sold a share. Just gotten heavy with other stocks. This pullback is an opportunity to fill up on CROX and NTDOY.PK, or perhaps to just wait until Monday. My Friday buys have been stellar in the past few months. Hmm...

Crocs is a relative bargain here at 65.99, well below its 10-day SMA (68). Q2 earnings were reported on August 14, and if Q3 comes out three months later, that would give us longs a Nov. 14 target. That's 26 days away. Too early to add more?

Nintendo (70.80) is milking the Wii and DS and everything it owns for all it can — but without emptying the whole sack. No question in my mind that the Co will deliberately ration the Wii as long as demand is huge. Remember, Nintendo was kicked to the curb, particularly by U.S. shareholders, for a few years there. The Co remembers this and isn't just tight with the product overseas, but is also overly discerning with its shares in Tokyo. (Investors there can only buy in bundles of 100 shares, and that comes out to about $41,000. Talk about an illiquid market in stock 7974.)

Today's pullback brings Nintendo's stateside pink sheets below the 10-day SMA (72), but I'll wait. The recent run above 70, all the way to 75, needs time to digest in this new box/trading range. I'm loathe to buy it high as I've done before.

Is it just me or was Maria Bartiromo a lot more hyper today on the trading floor? Luv Maria but when the market is on a major selloff, it's like watching a skittish cat trying to run across a busy freeway. When she's back at the desk, Maria is back to her calm self. Time to pick up some lululemon pants and hit the yoga workouts, Money Honey.

Oil hit $90/barrel today, then pulled back to 88.60. Guy Adami on Fast Money thinks the next $8-10 is downward. Dennis Gartman said crude should be at $75, and added that gold will fall if we are in a recession, as Julian Robertson said on CNBC today. If oil is due for a pullback, that will exacerbate the declines for PTR and CEO. I still want CEO, but I want it cheap. It won't get back to 92, but I will still be picky.

Garzarelli: Stocks are 28% undervalued

On CNBC this morning: Elaine Garzarelli says that unlike 1987, when the market was 35% overvalued, things are different now. The woman who called Black Monday says that by her 14 indicators, the current market is 28% undervalued.

Rather shocking. There's been so much talk about how the market is due for a crash. I'm leery, seeing the bulk of my portfolio in the red this morning. (Nasdaq down 16 points, Dow Jones down 120 points, S&P 500 down 11 points.) This is as broad in the red as I've seen my favorite stocks in some time. But Garzarelli is plainly bullish. "This is a secular bull market. Profits are at an all-time high relative to GDP. They continue, they're going to come down a little bit, but they continue to stay at a high level. Stock prices are here (lower). They haven't caught up yet."

Who's going to argue with her?

Thursday, October 18, 2007

Google soars without media permission

Google has always been an A grade stock in my mind, but when the Co missed estimates after Q2, I had to temper myself and leave it with an A- grade. Not fair, but it was right.

Today, Google blew out expectations for Q3, and I'm glad to move it to A grade where it belongs. This is a sound, fantastic growth Co that is as good as all the hype and uber-worship. What makes media coverage of Google interesting is that there are always a number of reporters will to take their shots. Here's one investor's response to the potshots.

Ignore Journalists: Google's Numbers Speak for Themselves

The MarketWatch article states Google is a renegade elitist that simply refuses to listen to Wall Street or investors. ... Another horrible article, posted at the Wall Street Journal Online, suggests GOOG will be volatile because the company did not heed the infinite wisdom of some overworked dim-wit analyst at Needham & Co. who called for a stock split.

Shiny Apple People eager for Monday

Boy, that was fast. The quarterly report is around the corner — around the weekend — for the maker of my favorite product, Apple. Monday's Q3 earnings report will tell so much about increasing Mac sales, iPod sales, ITunes revenues and, of course, iPhone sales. The market is bullish, pushing shares to 173 today. I just wonder how steep the selloff will be on the earnings report. I don't wonder a whole lot, though. I'm holding my shares for the long term, and the stock will recover because growth is far from over.

Mac, iPhone sales to lead Apple report

Analyst Chris Whitmore, of Deutsche Bank, said on Oct. 1 that channel checks showed the price cut spurring even more demand for the iPhone. Whitmore said that iPod sales gained more steam following a refresh of the product line that included adding the new iPod touch device, which incorporates many of the iPhone features only without the cell phone capability.

China Mobile inching toward mobile gaming dominance

I liked China Mobile, but I stayed away. Then CHL got hot and practically doubled in six months. I love CHL now, but it's too expensive. So what to do? Wong Joon Ian has an interesting perspective about mobile gaming and China.

China Economic Review: In a giant’s shadow

It is still early days for mobile gaming in China. A telecoms restructuring is expected next year and there are signs of a growing interest in gaming among the carriers. China Mobile, for one, has revamped its mobile games portal.

With 501 million subscribers, China Mobile has a stranglehold on the space. I want in before mobile gaming takes CHL's stock to the next galaxy.

Berko warns about overheating solar stocks

Malcolm Berko. Rhymes with beserko. Not that he is, you know, bonkers or anything. In fact, he's as earthy and rational as they get. Check out his take on the hot solar stocks.

Oh, heigh-ho: These 7 dwarfs are so ho-hum

Solar power is an exciting industry with enormous potential and enormous expectations. I promise you that the prices of those seven issues will be significantly lower in a few years.

Time will tell if he's right. I don't own a solar stock, not really regretting it, either. I do have my binoculars set on Yingli, though.

Great Moments in LULU History

Wednesday, Dec. 7, 2005
• lululemon founder sells stake for $108 million Vancouver Sun (Fiona Anderson)

July 27, 2007
• lululemon athletica inc. (LULU) IPO debuts on the NASDAQ Exchange and closes at $28 per share.

Sept. 11, 2007
Lululemon's net revenues soar 80% to $58.7 million for Q2 Vancouver Sun (Michael Kane)

Oct. 16, 2007
• lululemon athletica announces that comparable store sales will be higher than expected. The street had anticipated a growth rate (yoy) in the teens, but the Co notes strong volume and a strong Canadian dollar, then guides the street to a rate in the 30s. The stock moves from $41 to $47 in one session on 5.6 million shares - the heaviest trading since the IPO debut.

Oct. 17, 2007
• Following the Wachovia Consumer Growth Conference, LULU zooms for a second day in a row. The stock moves gains more than $6 to $53.70 (13.5%) on 3.1 million shares.

Former Starbucks CFO Michael Casey joins lululemon athletica. Casey had been vice-president and CFO at Starbucks from 1995 to 2007.

Oct. 18, 2007
• Buoyed by participation at the Wachovia Consumer Growth Conference in New York, LULU arches more than 4% to 56.20 for an all-time high. Volume of 3.7 million shares gives the stock a gain for the third day in a row.

Maybe corruption benefits stocks — or not

Somewhere along the way, stocks and justice — or corruption — will cross paths in China. Probably already has. Then it comes down to the individual investor and values. If the Chinese government won't allow gaming on its mainland turf, but promotes it in Hong Kong and Macao, is that hypocritical? Or is it just realistic?

That's a non-issue for me. The deeper concerns that I may have, or politicians and humanitarian groups have, is over human rights and illegal activities. This report asserts that China is still a land of toothless laws when it comes to corruption.

China Business: Toothless laws are no match for China graft

"China does things that will get media headlines and coverage, but they are at the stage of making examples of a few, hoping that others will follow and be honest, but they are not seriously digging deep and going after everyone," he said. "That's partly because there are still people in relatively high and untouchable positions who are corrupt."

More bull about Macao gaming

Hard to argue against the booming world of gaming in Macao.

Goldman Sachs Bets On Wynn, MGM and Las Vegas Sands

There is also an increased likelihood that these three major players will be able to create future growth by capitalizing on new opportunities in the U.S. and abroad – in places like Japan, Taiwan and South Korea, the analyst said in a note to clients.

Shanghai market may Sit down soon

From Gene Sit, veteran China investment manager:

BusinessWeek: Waiting Out the Bubble

Why do you think the damage won't be too bad?
We see a soft landing because we think fundamentals will continue to be good. China's GDP might not be 10% to 11%, but it might be 8% to 9% after the summer of 2008. That's because China now has the money, with growing reserves, and the trade numbers continue to be quite favorable. The government has the resources to build the country's infrastructure, and it can improve living and environmental conditions. Plus, the savings rate is very high, and corporations are making money.

Wednesday, October 17, 2007

Sound of Starbucks bulls is too frothy for me

I confess, with the leniency granted at every Starbucks I've ever patronized, I'm not worthy. I mean, to sit, sip an iced tea, eat my Subway foot-long and do some work for an hour, there's no place more suitable than Starbucks. And there's no place else that allows it, not in the area where I need to be every afternoon.

I would feel less guilt about my electricity use and prolonged stays if I actually invested in SBUX. But I don't. I want to see proof of revenues coming in from new streams, or rather, new locations. Otherwise, SBUX has a frothy price for my taste, without the gargantuan growth rate that I get from other younger, fresher stocks.

Smart Money Faceoff Review: Starbuck's Coffee

BULL CASE: Sharon Zackfia
Sales growth will continue to be solid due to new breakfast & lunch offerings and international expansion (profitability in China is better than U.S.) Store count is expected to double in 5 years.

BEAR CASE: Mark Coffeit
Discretionary spending is slowing, and “I can’t think of anything more discretionary than a morning cup of coffee.”

There's more, so check out the link. And there's also Georges Yared, one of my favorite bull market writers. He's been dead on right about Crocs and Apple, but he continues to push the "Go" button on SBUX.

Starbucks: It's coming back, and I know why

One dominating trait of successful growth companies is the development of a solid and contagious culture. Starbucks has a great and enviable culture; a culture fostered by Schultz, who considers all Starbucks staff "partners" rather than employees.

Maybe I'm just spoiled, but I'm used to seeing Yared write about numbers and offering strong evidence about a company's future growth. In this post, he offers ... a rah-rah story devoid of any empircal evidence whatsoever.

Think I'll stick to the unsweetened green ice tea. I can't stomach buying SBUX. Still.

Men: Wrong about CROX, wrong about LULU

I'm not the first to notice this, but as a long in lululemon and Crocs, I can't help but recognize that there are some really stupid summaries being made by men who completely don't get what the comapnies are about.

These guys who are normally intelligent and analytical boil down their negative stances on LULU and CROX with comments like:

• "Crocs are fu@#ing ugly. Nobody will be buying this fad in one year. I'm shorting this POS!"

• "Lulu has no chance against Nike and UA."

They were wrong about Crocs. They will be wrong about lululemon.

There are too many men who underestimate the buying power of women in our country. Too many men who underestimate the attention female shoppers pay to quality and durability. Too many men who think their misguided emotional responses to lululemon and Crocs products/apparel actually matter. If they want to keep shorting these stocks, so be it. They keep getting burned. Can't say I haven't tried to warn them!

I am wearing Crocs Caymans as I type this, sitting in Starbucks and typing on an old Apple PowerBook G4. Why do I mention this? The new CFO of lululemon had the same position at SBUX. Great pickup for lululemon.

Great Moments in Lemon History

lululemon athletica is in its infancy as a publicly traded Co. What an infancy it has been already!

July 27, 2007
LULU IPO debuts on the NASDAQ Exchange and closes at $28 per share.

Oct. 16, 2007
lululemon athletica announces that same-store revenues will be higher than expected. The street had anticipated a growth rate (YOY) in the teens, but the Co notes strong volume and a strong Canadian dollar, then guides the street to a rate in the 30s. The stock moves from $41 to $47 in one session on 5.6 million shares — the heaviest trading since the IPO debut.

Oct. 17, 2007
In anticipation of the Wachovia Consumer Growth Conference, LULU zooms for a second day in a row. The stock gains more than $6 to an all-time high of $53.70 (13.5%) on 3.1 million shares.

Lemons find a new box

lululemon athletica is a classic example of a stock that moves from one box to another. Nicolas Darvas came up with his box theory in the 1950s and it served him well. Here's what LULU has done in three short months.

• Traded between 28 and 37 from July 30 to September 18.
• Breakout on large volume, Sept. 19.
• Traded between 38 and 48 from Sept. 20 to Oct. 15.
• Breakout on large volume, Oct. 16. New high of 50.81.

In Darvas' world, anticipation of good and bad news did not exist until after the fact. He relied heavily on price action, i.e. investor/trader psychology reflected in the stock. Would he have sold LULU when it plunged from 48 to 41 in the past week? Hard to say. When he believed strongly in a stock, he let it bounce within its box.

I'm optimistic about LULU at this stage of its development, so I had no qualms about letting it ride. Good thing I did. Yesterday's raised guidance and today's participation at the Wachovia conference in New York have boosted the stock. It's a good time to be a retailer, with the 50-basis point Fed cut behind us and the holiday season just ahead.

LULU is trading at 49 plus this morning.

The Magic Words

My fixation on China oil hasn't really been an accurate view. The patch is really China energy. Whether it is oil or nat gas, solar or even ethanol, the largest nation in the world will need all the energy it can acquire. With crude hitting another all-time high of $89 per barrel, here is a quick look at energy stocks in China this morning.

Suntech Power (STP) $44.93 +3.09 (7.4%)
Yingli Green Energy (YGE) $31.97 +0.44 (1.4%)
PetroChina (PTR) $261.75 +31.63 (13.6%)
CNOOC Ltd. (CEO) $193.30 +12.79 (7.1%)

There is much more, of course, but these four stocks — two solar-oriented and two in oil/nat gas — have been killing bears and shorts mercilessly. I still lament my inability to buy CEO at 92 two months ago, when it had a P/E of 11 and I was harping on and on about its greatness.

China energy. Two magical words.

Tuesday, October 16, 2007

The Squeeze is Lemon Fresh

lululemon defies gravity this morning. Even with the announcement from the Co that the street's estimates for Q3 same-store sales is far too low, the stock has soared beyond my imagination. I picked up more shares at 47, then was quickly punished as the pre-market crowd brought the stock back to 45, and the LULU dropped to 44 not long after the opening bell.

However, the numbers were being digested, and LULU is now trading above its resistance level of 48. In fact, LULU has pierced 50 already. That's what an 18-million-share float can do, especially with the shorties out there hating on a women's apparel Co. All the excitement is nice, but frankly, I'll be content if this stock settles at 48 by the end of the day. Too much, too soon, too fast is not healthy. As if I have any control over that. Dramamine, please.

I'm happy to be riding this Lulu choo-choo train. I hope you are, too. Love that lemon-fresh scent. Thank you, once again, Oh Canada! (I also own some RIMM.)

Sakazaki examines the Baidu horizon

One of the better posts on Baidu that I have seen. Perhaps the best, actually. Lloyd Sakazaki doesn't purport that Baidu is a cheap stock here, and his breakdown of the numbers support his contention that time is on the stock's side.

Sakazaki: Is Now the Time to Buy Baidu Stock?

Among these U.S.-and China-based Internet companies, only Google and Baidu still show annual growth rates exceeding 50%. For 2007, Google's revenue is expected to expand to 58% above its 2006 level, while Baidu's revenue is forecast to surge 108%. For 2008, while consensus estimates show Google's growth slowing to 37%, Baidu's growth is projected at 78%. The message here is that China, being a younger Internet market with still only about 10% of its 1.3 billion population online, (pdf file) exhibits higher growth.

Is Sakazaki right about the growth rate? If he is, I'll be the first to crown him Genius of Baiduville. I hope he's right, frankly, and I still don't think the government would let its search engine leader lose to invader Google. Haven't you seen the morbid, yet amusing TV commercial?

Under Armor may be under bought

Under Armor may confound some longs, but with a forward P/E roughly twice that of Crocs, the neutral investor has an easy choice. Warm weather this fall may have an effect on sales of the product, but in the long run, UA is in a niche of its own.

Pupule says: The recent mini-rally has pushed UA (60.17) over its 10-day SMA (59.67), but it is still below its 50-day SMA (62.74). True believers can get a good price here.

Synaptics cool, but too hot

Synaptics won't be going away for a long, long time. Touchpad technology is cool and effective. That's what it looks like, anyway. The fact that I don't own an iPhone or any other new gadget doesn't mean I won't invest in it.

Pupule says: SYNA is soaring high at 51.91, well above its 10-day SMA (48.82). Wait.

Potash is smokin' hot

Potash is still cashing in on the global agricultural bonanza. I passed on POT months ago, thinking it was mostly an ethanol play. Well ... POT's fertilizer is in demand overseas, too, and I've missed the boat.

Pupule says: Wait. At 109.42, Potash is above its 10-day SMA (107.88). It's run so high, so fast, I'm more inclined to see it dip near its 50-day SMA (93.32) before pulling the trigger.

Grand poobah PetroChina still rising

Heheh ... PetroChina is a true pimp. Monopoly was never this easy for China's oil giants. With oil now above $87 a barrel, there is no end in sight. It's like watching a home run that keeps rising.

Pupule says: Wait, wait, wait. Even as Turkey and Iraq seem intent on war, wait for a dip. At 236, PTR has no support near these levels.

Wii are the world

Nintendo traded up over 75 yesterday, an all-time high. How much of the latest run is dictated by the strengthening U.S. dollar? How much of it is related to the holiday season, which inches closer each day?

How much of it is tied in to the basic fear of parents when it comes to the usual Barbie Dolls and action figures made in China, now being recalled en masse? Hard to gauge all of these factors, but the Wii will continue to sell. The DS will be a must-have item. And not just for me. I'm talking about kids everywhere.

Pupule says: Wait. The stock has a tendency to surge, then park, very boxlike behavior (re: Nicolas Darvas). Just wait for the typical consolidation, perhaps a pullback. I've bought low, and I've bought too high. Better to be patient, let the stock dip under its moving averages, then harvest your ripe shares of NTDOY.PK.

Arches are very golden overseas

Mickey D's not only has mad expansion in China and mega-success in Russia, it is the kind of monster Co that inspires confidence. The dividend is just a bonus.

The Co's ability to adjust its menu and cater to local tastes is key. Here in Hawaii, McDonald's sells saimin and fruit punch. The adaptability will serve all well overseas, too.

Pupule says: Buy small. At 56.19, MCD is below its 10-day SMA, still consolidating since making a nice run after the increased dividend announcment.

Morning rush raises cost of lululemon

Was it the recent report, erroneous as it was, by Fortune's Suzanne Kapner that propelled lululemon athletica to announce this morning that same-store sales are going through the roof? Interesting timing, but it doesn't really matter when as much as the fact that LULU is kicking arse.

lululemon traded down for a third day in a row yesterday. At 41.13, nearly 20% off its all-time high, LULU was a great buy; the 10-day SMA is 44.90. Currently, though, LULU is trading in pre-market at 46.35, and was as high as 47.85. Quite a move for a stock that had increased short interest recently plus the pan by Kapner.

Pupule says: Wait. Great earnings revision or not, the stock is now trading well above its moving averages. Buy at your own risk, of course. My original entry point was 38, and I added more this morning — against my normal technical discipline — at 47. If LULU can hold its gains in this weak premarket and through the morning, I may hold my new shares. Otherwise, it's probably wiser to trade late in the day and wait out this storm.

Google is not just a doodle

Googol is something I read about as a kid. A hundred zeroes following the numeral 1. The Google we know today is going to leave the original googol in its tracks sometime soon.

The G-phone is really putting a lot of sex appeal into GOOG, and there are probably a lot of us who wish we'd bought a few shares back when the stock was languishing at 460. Say what you will about the merits of swing trading and daytrading; there's no more sensible way to make money than to buy a great stock on the cheap before it makes that inevitable run.

Pupule says: Wait. At 620, GOOG is far above its moving averages. If Q3 earnings tomorrow aren't killer, the stock will come down to earth for the rest of us.

lululemon puts the squeeze on all haters

Yeah baby! To the shorties, the analysts and writers who have been panning lululemon athletica, good for you.

lululemon athletica inc. Raises Third Quarter Comparable-Store Sales Outlook

VANCOUVER, British Columbia--(BUSINESS WIRE)--lululemon athletica inc. (NASDAQ: LULU - News; TSX: LLL - News) today announced that comparable store sales for Fiscal 2007 third quarter ended October 31, 2007 are now expected to show percentage growth in the mid-30's over the same period last year, compared to previous guidance of growth in the mid to high teens. The Company's revised guidance is attributable primarily to strong sales volumes, with additional benefit coming from the impact on sales of a strengthening Canadian dollar against the U.S. dollar. On a constant dollar basis, the revised guidance translates into a mid-20's percentage increase over 2006. Even though the increase in sales is expected to be partially offset by the currency impact on SG&A costs incurred in Canada, the Company expects to exceed its previous guidance of $0.05 to $0.06 EPS for the third quarter.

All the bogus reporting by the likes of Suzane Kapner of Fortune is being held to the fire right now. Where they get their figures and estimates from when the Co obviously is kicking serious ass ... will we ever know? It doesn't matter now. The Co will be part of the Wachovia Consumer Growth Conference tomorrow in the Big Apple. Anyone who hasn't covered his short by then will be sour for sure.

Flowserve finding its footing up high

Maybe it was unfortunate timing, but even before the subprime sludge slowed down the market in mid-August, Flowserve seemed to lag. Other stocks would bounce high on an up day, and FLS would sit quietly, barely advancing. Stocks would plummet on a down day, and FLS would slip right there with all of them.

At 78.07, Flowserve isn't so timid anymore. The stock is below its 10-day SMA (78.69).

Pupule says: Wait. If FLS stays below its SMA for another session or two, a small position might be worthwhile.

Monday, October 15, 2007

eBay: nice price, not for me

eBay is one of those companies that is producing great numbers, yet I have had a mixed bag of personal, customer experience that leaves me neither a fan nor supporter. Though I rated the stock an A- a month ago, I don't have the enthusiasm for EBAY that I do for most of my A and A- grade picks.

Fortunately, making money in the market has less to do with my personal feelings and everything to do with the fundamentals of the stock, the company and the market. eBay has been extremely volatile this year, and today's pullback

Pupule says: Buy small. At 39 even, the stock is just below its 10-day SMA (39.12). Like Amazon, eBay for me is not an exciting opportunity. Even Amazon holds a superior customer experience, but I can't deny EBAY's fundamentals and growth prospects in Asia. But I won't be buying EBAY before many of my other A and A- stocks.

Price of CNOOC gushing too high

CNOOC Ltd. is in a sweet spot. Everything it was born and raised to be has already been pre-ordained. PetroChina can do the heavy lifting, and CNOOC finishes out the job. That's the beauty of being born son of the Emperor, or in this case, the government. The last time I look at the chart, it was at 155, well below its 10-day SMA.

Since then, the stock has gone on another meteoric launch. Today, CEO traded at 192 before settling down at 188.26. With oil trading above $86 a barrel today, it's only fitting that oil stocks are keeping pace. But CEO is too expensive for sane buyers.

Pupule says: Wait, wait and wait more.

Tasty rewards in Chipotle Mexican Grill

Time for a main entree at Chipotle Mexican Grill? Maybe not. Sure, Cramer spent a good 2 or 3 minutes pontificating about the need to sell CMG now, but that's based on ... what? He wants profit-taking to ensue, more than anything.

Sure enough, the stock has dropped 10% since Cramer's sermon, and the stock is well below its 10-day SMA (126). In fact, at one point on Friday, CMG traded below 115. After going up in a straight line since early September, the stop losses and profit-taking are expected.

Pupule says: Buy. This A- stock needs to take a pit stop, breathe and consolidate. Though it's below its 10-day SMA, the gap is huge. Support is at 110 if you can wait for more retreating.

Dialing up China Mobile

China Mobile. Read about it. Studied the fundamentals. Didn't believe it was a true growth stock. That was six months ago. The stock has doubled. I was wrong. Thing is, there's still a lot of upside, not just because the Co is capturing new customers in the rural areas, but because Chinese use their cellphones the way we in the states use our laptops and PCs.

There is no limit in sight, not yet. But at 88.98, CHL is trading above its 10-day SMA (84.80). This can wait.

Pupule says: Wait. The stock has gone up almost nonstop for two months.

Tide is low for bargain hunters of Blue Nile

If you believe in Blue Nile, then the recent downgrade by Citigroup can be interpreted as pure bull kaka. The small float and the negative calls have sent the stock plummeting from a high of 105 all the way down to today's 81.84.

Couple the poor forecasts and insider selling by the Co's top dawgs, and it would seem reasonable that NILE deserves the 20% drop. But the Co hasn't warned about declining revenue or earnings. Could it be that sensational growth has suddenly gone flat? Where's the proof? Have Zales and Tiffany's entered the online jewelry wars? I can see the possibility of slowing growth, but not much else. So I'm holding my shares, which I bought at 80.

Pupule says: If you really, really, really like Blue Nile, this is a screaming buy. A stock that drops below its 10-day SMA (94) and 50-day SMA (88) is rare in this environment. That is, a stock I've rated A-. Me? Wrong? We'll see.