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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: - with a K who wrote (2602)	3/5/2005 12:31:21 PM
From: - with a K	Read Replies (1) \| Respond to of 13449

WFR: another nomination for solid fundamentals and good TA, with a little background and even some Jim Cramer thrown in. :>) I first bought this with very little DD and mainly as a trade based on Dabum's set-up post Feb. 17: Message 21058834 I had written down his target, $13.70. Some time later when I started digging into the company I was pleasantly surprised to see some strong fundamentals, and I was reminded of Cramer. Say what you want of him, but I once heard some good advice from him on his radio show, Never turn a trade into an investment. He explained that if you enter a position based on a trade mentality and it goes against you, don't start looking for a rationale to stay in it long term. Which is exactly what I've done with WRF; when Dabum stopped out on Feb. 18, I was either slow or frozen or preoccupied and I stayed in, looking for reasons to be long. It was perhaps pure luck, but now I am up 11% for my three lots, and barring some disaster, I am planning to stay long because of its fundamentals: - Four quarters of positive earnings surprises, low of 8.3%, high of 17.4% - Next year's estimates have risen from $1.07 to $1.29 recently. finance.yahoo.com - Using the low estimate of $1.13 for next year and the consensus growth rate from Yahoo, I get a compelling fair value and some downside comfort using my Graham calculation: Company: WFR Date: 3/5/05 Next year's expected earnings: $1.13 EPS growth rate used for estimate: 12 Multiple Graham used for estimate: 8.5 Graham Fair Value: $25.85 Current Price: $14.30 $ difference: $11.55 Percent Growth to Fair Value: 80.80% - 23% net profit margin (!) - 27% ROA and 74% ROE, which are not sustainable IMO and perhaps suspect, but I haven't dug into those to find out why they're so high. - Low debt/equity of .31 finance.yahoo.com - Institutional holders up 8.8%, yet insiders sold heavily in Feb. around $11. Curious. finance.yahoo.com - Scores a "96% buy" overall on a freebie TA site and a "10" (highest rating) on MSN Stock Scouter, which may be useless but are at least confirming my analysis and may attract other buyers. quotes.barchart.com moneycentral.msn.com - Upgraded by UBS this week to "buy" from "neutral," citing expectations for higher wafer demand in 2006. UBS also raised target to $17 from $14. Finally, while plunking along this morning on my broker's website running some screens I developed months ago, up pops WFR in my "New TA Screen" as the number one candidate: From your saved screen: New TA Screen 12/10 Criteria: Stock Price: Greater than $3.00, Less than $40.00, Price Perf. (Last 5 Days): Greater than or Equal to 7%, Vol. (Avg. 10-Day / Avg. 90-Day): Highest 20%, P/E (Next Year - Est.): Lowest 60% for industry, Rev. Growth (Last TTM vs. Prior TTM): Highest 60% for industry, Profit Margin: Highest 60% for industry, Ret. on Equity (TTM): Highest 20% for industry So I just had to post this. Thanks for the original idea, Dabum! Long term weekly chart shows a strong move the last 3 weeks on big volume. MACD has turned positive and it is approaching an old high of $14.51. stockcharts.com[h,a]waclyiay[pc21!d10,1!f][vc60][iut!Lg!Lah12,26,9]&pref=G

To: - with a K who wrote (2602)	3/5/2005 5:43:17 PM
From: chowder	Read Replies (1) \| Respond to of 13449

CIB is a good example of how our 3-5 bar drop set up should work on longer term trades as well. Back in September 04, the buy signal came as price broke out above $9.00 on above average volume. The price moved as high as $14 and change before we saw the first 3 bar drop. MACD was positive and money flows were incredibly positive. I am going to put this one on a watch list and wait for a correction like the last one. stockcharts.com[h,a]waclyiay[d20040105,20050305][pb20!b40!f][vc60][iut!Lah10,30,5!Lc20]&pref=G Note the nice pull back in January into support on BF and the price then broke out to new highs. The same set up I use for 2-5 day trades works on longer term trades as well. stockcharts.com[h,a]waclyiay[d20040105,20050305][pb20!b40!f][vc60][iut!Lah10,30,5!Lc20]&pref=G The best buy signal for RIO came in October 04. We haven't seen a 3 bar drop since. RIO is showing a potential reversal here though. You saw a huge volume gap up two weeks ago followed by a high volume Doji at a price high. It's not an every week thing to see a Doji appear. So I wouldn't ignore it. Perhaps we can get a 3-5 week drop into support for another opportunity to buy in. I will put this one on a list as well. stockcharts.com[h,a]waclyiay[d20040105,20050305][pb20!b40!f][vc60][iut!Lah10,30,5!Lc20]&pref=G Thanks for you input. I sincerely appreciate it. dabum