February 2008 Archives
Short Squeeze: Converted Organics Inc. (COIN)
UPDATE:  Last October, the Fusion IQ quantitative ranking system generated a BUY signal in Converted Organics Inc. (COIN), as the chart below shows.

Converted Organics Inc. (COIN) a manufacturer of organic biostimulants, a natural fertilizing product used in organic farming, scored a new FusionIQ Short Squeeze signal last week (February 21).

With 19.87% of its float short, and shares trading up on over two times its average daily trading volume, it appears that shorts betting on a price decline have been panicked into buying back shares as they advance higher.

The point and figure future projected price target for COIN shares is $17.00.  We think $10.40 is an appropriate stop loss here for traders.

Buy and Sell Signals
One of the things we like to do with the Fusion IQ Rank software is watch the latest Equity Buy/Sell Signals for intertesting names.
On the home page are displayed of all stocks that have new timeliness buy and sell signals on any given day. The stocks are then sorted by Technical Rank; Descending order for new Buys and Ascending order for new sells.
Out of 143 equity buy signals, and 156 sell signals, here are the top 10 of each


Barrons Review: Disney (DIS) Is the Magic back ?
A few years back our FusionIQ software had The Walt Disney Co. (DIS) highly ranked and subsequently shares rose very aggressively.  At the time analyst coverage was very neutral about the prospect for shares.  However the analysts turned out to be wrong and FusionIQ with its unbiased assessment turned out to be a much better prognosticator.  Again in November of 2007 FusionIQ turned out to be a solid forecaster, with Disney shares not far from its peak, its' FusionIQ ranking score started to drop to bearish levels (below 70).  And indeed it turned out to be a fortuitous warning as shares subsequently plummeted over the coming months.  
This weekends edition of Barron's wrote a glowing story entitled " The Magic is Back " about Walt Disney and its prospects for the future.  That said we decided to run Disney through FusionIQ to see what its unbiased opinion was.  As seen in the attached chart, Disney's FusionIQ Master ranking is only a 58 out of a possible 100.  The moral of this story ?  Maybe there is some magic left in the kingdom but at this point with only a 58 ranking it is still a bit early to believe the magic is back for good !!  
The best plan of attack if one wants to invest in Disney shares is to wait for its FusionIQ rank to move back into bullish mode again by seeing its ranking score move back over 70 again.   FusionIQ users can track these changes very easily by setting email alerts based on ranking changes.
To see the many other things FusionIQ can do visit us at www.fusioniqrank.com

Three of the Nasdaq Four Horseman AAPL GOOG and BIDU Limping

and BIDU have been coming up gimpy since their FusionIQ timing sell signals which triggered at much higher levels several weeks ago (note the sell signals are noted with an S on the attached charts). Since these FusionIQ timing sell signals triggered these stocks have fallen precipitously.  Only RIMM, which gapped open yesterday, acts ok while the other stocks have clearly broken down.  We point this out because trading highly volatile names like the aforementioned can be dangerous particularly if one doesn’t have some disciplined unbiased indicator driven trading signals to help make better decisions.


Remember making sound decision sometimes requires introducing another layer to your trading plan.  Just one of these FusionIQ timing signals if followed in the last several weeks could not only have produced a windfall of profits (or helped one avoid losses) it would have also paid for the service for several years with just one trade.














































COIN New FusionIQ Short Squeeze

Converted Organics Inc. (COIN) a manufacturer of organic biostimulants, a natural fertilizing product used in organic farming, scored a new FusionIQ Short Squeeze signal yesterday. With 19.87 % of its float short and shares trading up on over two times its average daily trading volume it appears the shorts betting on a price decline are now running in to buy back shares as they advance. The point and figure future projected price target for COIN shares is $ 17.00.

Commodites Continue to Surge: Powershares DB Fund Hits New High

Several weeks back we highlighted commodity stocks as showing strong technical strength within the context of an otherwise weak tape.  As seen in the chart below of the Powershares DB Silver Fund, scored new highs yesterday.  This is just one of many commodity based ETF’s scoring new highs.  This broad based participation shows good breadth and suggests the commodity advance can continue even if there are pullbacks along the way.

Philips Electronics: Is the Glow Getting Brighter ?

In its article, " The Glow Is Getting Brighter " Barrons' highlights Koninklijke Philips Electronics (NYSE: PHG) the Dutch maker of light bulbs, shavers and MRI machines suggesting it finally looks ready to deliver some high-wattage results.  The article further cites the company, with a market value of $44 billion, made a series of smart moves by paring the company's businesses from an ungainly 24 to just four, slashing costs and pushing into emerging markets.

Additionally the segment discusses two acquisitions announced last year totaling 5.3 billion euros ($7.7 billion); Respironics (NASDAQ: RESP), for which Philips is shelling out €3.4 billion, which should boost the company's personal-health-care-equipment business with devices that look after respiratory problems, snoring, even insomnia. The deal is expected to more than double Philips' annual sales in personal health care, to €1.5 billion.  The other buy is Genlyte (NASDAQ: GLYT), a U.S. maker of mainly commercial lights. Genlyte's operating margins are close to 15%, which should raise Philips' total lighting margins to 12.2% from a current 11.1%.

Now the story sounds good as do most fundamental stories, however even with this aforementioned news known to the investing public the stock is still languishing near a 52 week low and with a FusionIQ technical rank of just 44 (out of a possible 100) we would suggest it is still too early in the turnaround to take part in a PHG recovery story As always we believe the best investment opportunities should have both strong technicals and supporting fundamentals, and clearly in the case of PHG only one discipline (fundamentals) see the stock as strong.

INCY Continued Breakout
INCY, a molecular and genomics company that we featured in our FusionIQ Investor Chart of the Week several weeks ago, continued to breakout to new price highs yesterday on above average volume.  Shares continue to look bullish with an $ 18.00 target and can be bought here and on pullbacks.

FusionIQ QQQQ Sell Signal Still intact
The NASDAQ 100 Tracking Stock (QQQQ) remains on its recent FusionIQ Sell Signal (initiated 1/8/08).  Since the sell signal the index has fallen over 13.2 % in a short period of time and remains vulnerable.
Get this signal as well as hundreds of other ETF trading signals daily by subscribing to FusionIQ at https://www.fusioniqrank.com/signup.php

AIG: Don't Try and Catch a Falling Knife
Many investors think that large cap, world class global stocks like AIG can always be bought when they have an off day such as yesterday when AIG shares plummeted over 11.00 %.  The logic tends to go something like this, " Wow AIG got really pasted yesterday it has to be overdone and a god buy here, after all it is AIG."  But as the attached chart shows buying a falling stock can be akin to trying to catch a falling knife.  In other words it can get pretty dicey.  Even taking into account yesterday's decline we caution investors that with a FusionIQ technical rank of only 12 (out of a possible 100) AIG is likely to go lower still, even if a nominal bounce were to occur in the interim. That said we as the attached chart shows we think AIG now won't find support until it hits $ 32.00.  This support level ironically coincides with the downside unbiased, point and figure objective price target of $ 33.00.
American International Group (AIG) - Weekly Chart through yesterday's close

Barron's Review with FusionIQ Ranks
One of the lead stories in Barrons this weekend was on the S&P Packaged Foods Index.  The article suggested that the food stocks may have fallen to far, right along with the broader stock market. Historically prized by investors for their defensive characteristics in times of turmoil, the stocks instead have headed south amid worries about the impact of sharply higher commodity costs on industry profits.  Barrons suggests in their story that valuations for the S&P Packaged Foods Index components are attractive and with the companies paying solid dividends these companies are now worth taking a look at. 
As seen below we ran these stocks through our proprietary FusionIQ Software and the results weren't pretty with only BG and MCD registering bullish readings of 70 or greater.  The remaining stocks in the index have extremely low FusionIQ scores suggesting they are likely to be out of favor for quite sometime.

Metalico (MEA) High Ranked FusionIQ Breakout

Metalico Inc. - MEA, a company that treats and recycles industrial waste such as lead acid batteries, scrap lead, and tin/lead scraps broke out of a multi-month consolidation on Friday on expanding volume after setting a solid base support between 9.00 and 8.75.  Addtionally the company has bested earnings estimates by double digits in 2 of the last 3 quarters, and has a very bullish FusionIQ Master Technical Score of 92.  The upside point and figure derived price objective  of $ 18.00 is as bullish as the FusionIQ Master Technical Score implies.


FusionIQ Short Squeezes
The following stocks today show up on the FusionIQ Short Squeeze screen today because they have exhibited above average volume and price surges and have a significant percentage of their float short.  We expect follow through momentum on these names over the following days and weeks.  They are sorted by highest to lowest FusionIQ Technical Score
WMS    FusionIQ Technical Score 96     Short to Float Percentage   11.14
ENS    FusionIQ Technical Score 92     Short to Float Percentage   24.54
CREE    FusionIQ Technical Score 91     Short to Float Percentage   35.14
XIDE    FusionIQ Technical Score 80     Short to Float Percentage   10.57

Follow up Coal Stocks ACI
Several days back we did a blog post on the breakout momentum is coal stocks.  After a modest pullback ACI shares surged yesterday on big volume.  In a market desperately looking for leadership groups the coal sector has certainly stepped up lately and grabbed the baton.  ACI shares still look like they can move up from here and challenge its May 2005 peak near 55.00.

Coal Stocks Register Breakout

As seen below the S&P 400 Mid Cap Coal Index broke out last week above significant resistance.  The move on the breakout had good sponsorship with many names participating in the advance.  Pullbacks or a consolidation may provide a good entry point on many of these names.  


The top rated coal stocks in FusionIQ are as follows: 


·         FCL   90 FusionIQ Master Ranking

·         MEE  87 FusionIQ Master Ranking

·         ACI   81 FusionIQ Master Ranking

·         CNX  79 FusionIQ Master Ranking 


S&P 400 Mid Cap Coal Index

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