Hi there
thanks for the reply. You bring up two very good points. I am neither long nor short so I really don't have an opinion yet. With regard to your concerns:
Concern 1. I don't see how a stock with less than 20 million out is going to be actively traded....I agree, this little one's average daily vol isn't high and I would need a day where it trades above 65,800 to get any kind of volume breakout, but if the earnings come in, you'll see that in spades.....but that is of course a big if.....In my research report to my client's, I suggested the buy comes on a move through $13.70 (but really I'd like to see $14 taken out) so we are all just watching for the time being...
I'm a technician by trade so I guess what got my attention was the weekly chart.....I've seen it a hundred times....this one goes through $14 and see you later....
sorry, got off topic there....
Concern 2. I agree, what's the big deal....never heard of them before....what's the compelling story??? If there was a reason why this one wouldn't be a CANSLIM stock then I think this would be it...this is my take. This company is a China manufacturing play. They own patents for and factories to produce 'linear motors'. They are the dominant local player in the field. Latest project they are into involves China's intention to build the largest subway system in the world. The "New" in CANSLIM might be related to this since the product is in high demand, they have the market cornered (through "relationships" with Beijing....I think that means its all fixed!), and I don't see any slowdown in the current Chinese economic expansion until after the 2008 Olympics....but as they say, the proof is in the pudding, so if earnings don't come in and the price can't get back above $13.70, then there will never was a trade here....
So to sum up, thanks for your input and I appreciate your concerns. While I certainly don't want to convince you to buy (and I wouldn't buy it myself here), I hope my responses at least shed a little more light on this one and how I feel it might meet the CANSLIM trading model,
Brian
p.s. looks like the broader market is rolling over anyway, so we may not get the "M" for quite some time anyway ;-) |
