► UTEK, Ignore the hype for or against, check it yourself for technical and fundamental strength GOING FORWARD..
UTEK seems to be one of a rare breed that rocks in the semiconductor industry while others are hurting. UTEK finally moved down on Friday after being in overbought territory for 2 months. Took out support in one day of the 10 and 20 day moving average which saved it at 36 1/4.. however if the momentum continues to the downside UTEK will not find support until 29 9/16 and the 200 day moving aveage is at 20 1/16.
My opinion is let the trend dictate on this much hyped stock and cash in while the bulls and bears are in this asinine debate, you might be shorting or buying puts or calls if it looks to have anything more than a dead cat bounce. The puts and/or calls run from 2 1/2 to 3 1/2 a contract and might be the best way without joining in on the frenzied debate that is worthless, only watching the direction of the trend next will give us the best indication of where this one is heading. It could be fun this week, and I have about another 4 that I am tracking that are in a pretty similar situation. Whether there is value in a dabate is moot, if there is a recovery in nasdaq
I could see investors heading for ORCL,INTC or SUNW faster than they would head for UTEK, which had one earnings season that was okay but what about the upcoming report and we are interested in sequential growth from quarter to quarter and if your research finds it may be lacking then make your decision based on fact and not hype. However if you find that UTEK has something genuine then watch it based on your own research.
Make up your own screens for these criteria (you can refine it much more based on your expertise and technical knowhow)
► LOOK for them to have beaten earnings expectations not just the latest period but the LAST 2 or 3 PERIODS. Look for a percentage beaten of at least 3%
► Upward Revisions of Earnings (we used this criteria since 1996 and it still appears in our oldest Geocities first website created in that year before we had our domain and server. This revision be made during the last 7-14 days, 7 days for a daytrade, or better still try find the earnings revision AFTER the report comes out and you might enter a bouncing stock IMMEDIATELY. For the year, you are looking for at least 3% as well but the raising could have been made within the last 30 days.
► Growth should be by at least 30-35% for the next 3 years.
► P/E ratios are debatable but 1 and 1/2 times growth for 2001 is high enough.
► If you want smaller companies than understand that double or triple digit growth is usually not sustainable but for a short term trade you might come up with some good mid cap stocks. Use a minimum of $500 million for market capitalization.
Once you get the scan results, recheck the stocks for analyst rank, price rank, short term tech rank, etc... basically the criteria for sustained TECHNICAL STRENGTH. You don' t want them overbought, so you might plug in absolute values for stochastics levels (not higher than 55) or RSI levels, Long Term MACD levels could be higher but not short term MACD levels etc....
This way you can glide over the hype and use your own due diligence. Read the hype, but make judgement calls based on your own due diligence, the confidence in trading/investing will increase each and every trade and you won't be combing these threads for more hype thereafter. |
