April 2008 Archives
Earthlink Inc. (ELNK) turns a profit

Internet service provider Earthlink Inc. (ELNK) recently turned a first-quarter profit that beat expectations as the company upped its full-year forecast. The Atlanta, Ga.,based company reported a first-quarter profit of $54.4 million, or 49 cents a share, compared with a loss of $30 million, or 24 cents a share, in the year-ago quarter. Results beat Wall Street's expectations for a profit of 33 cents a share.

As aforementioned Earthlink also upped its full-year outlook. The company now expects net income in a range of $153 million to $163 million, which is in line with analysts' estimates. Earthlink also expects annual adjusted earnings before interest, taxes, depreciation and amortization (or EBITDA) to fall between $245 million and $260 million.

With a FusionIQ Master Technical Score of 80 and close to 19.00 % of its float short ELNK looks like it not only has solid earnings momentum behind it but it also has price momentum.  The point and figure target of $ 14.50 offers good potential reward.

Tenet Healthcare Corp (THC) surges on analyst upgrade
Tenet Healthcare Corp. (THC) stock rose in heavy trading for the second consecutive day after a Credit Suisse analyst upgraded the stock on Friday from Neutral to Outperform, saying the hospital operator's revenue will likely increase because prices are improving.  Citing first-quarter earnings from insurance companies like UnitedHealth (UNH) and WellPoint (WLP) showing that hospital prices are growing the Credit Suisse analyst suggested Tenet will report stronger growth in admission prices than expected.  The target price was raised to $8.00 per share from $6.00. 
With a new FusionIQ timing BUY signal and a point and figure target of $ 10.00 plus solid base support just below $6.00, pullbacks in THC would provide good risk reward set up for investors with an intermediate term time frame.

Gardener Denver (GDI) - Robust Demand, Combined with Manufacturing Execution and Cost Control, Drive Outstanding Results

Gardner Denver Inc (GDI) scored a recent high volume breakaway gap on the heels of a very strong quarter where the company also raised full year guidance.  The stock has a FusionIQ Master score of 89 and also recently scored a new FusionIQ timing BUY signal.  The point and figure target on the recent breakout is $ 62.00.  Below are the fundamental highlights from the quarter for reference.

Compared to the first quarter of 2007:

  • Orders increased 19 percent
  • Revenues increased 12 percent
  • Operating income grew 12 percent
  • Net income increased 19 percent
  • Diluted earnings per share increased 19 percent
  • Company raises 2008 full-year EPS outlook range to $3.65 to $3.75
  • Cash provided by operating activities exceeded $65 million in the
    three-month period of 2008, compared to $37 million in the same
    period of 2007

CEC Entertainment Inc. (CEC) - FusionIQ Short Squeeze and Breakout
CEC Entertainment Inc., (CEC) which operates the Chuck E. Cheese pizza and entertainment center chain, said last week that first-quarter profit rose 3 percent, helped by higher sales at company-owned stores.  With almost 13.00 % of its' float short and a point and figure target of $69.00 on the recent breakout CEC certainly offers good potential reward.

Given the recent large price spike a pullback would probably offer a better entry level.

T Rowe Price Group Inc. (TROW) breakouts out on the heels of strong quarter
Shares of T. Rowe Price Group Inc. (TROW - FusionIQ Master Score 86) surged Thursday after the investment management said its first-quarter earnings jumped 6 percent.  The Baltimore-based investment management firm earned 151.5 million, or 55 cents per share, during the first quarter, a penny short of analysts average estimate, according to Thomson Financial., however analysts were encouraged by strong inflows of cash from investors during the quarter as $9.7 billion flowed into T. Rowe Price during the first quarter.
Yesterday's price breakout targets to $ 77.00 so clearly there is some nice potential upside left for T. Rowe shares.  Given yesterday's spike there may be a need for some consolidation or a pullback, which could offer a good entry point.

Celestica (CLS) records FusionIQ breakout

Contract electronics maker Celestica Inc (CLS) scored a FusionIQ breakout as it said on Thursday it returned to a first-quarter profit.  The company, which makes consumer electronics such as Microsoft Corp's (MSFT) Xbox 360 video-game console, said it earned $29.8 million, or 13 cents a share, in the three months that ended March 31, compared with a loss of $34.3 million, or 15 cents a share, in the same period a year earlier.  With and upside point and figure target of $ 16.00, pullbacks offer attractive entry points.

Short squeezes w/ bullish point and figure targets

The following stocks Flir Systems (FLIR), Red Robin Gourmet Burgers (RRGB) and World Acceptance Corp (WRLD) all have sizeable short interests relative to their floats (14.71 %, 47.00 % and 25.85 %, respectively) and much higher point and figure upside targets ($ 55.00, $ 57.00 and $ 60.00 respectively) that make them attractive trading candidates based on excess liquidity that is likely to propel prices higher very quickly.



























Ford Motor Co (F) In the News Today

Two quick things on today’s FORD news


First of all our system put a new buy on F on 4/7/08 after multiple sell signals (see chart below) usually a signal of a change in the underlying strength of a name…

Second; our system is not just made of technical indicators, it “Fuses” technical and Fundamental matrix to help guide you in your investment decisions.  An example is the ESP (Earnings Surprise Prediction): The ESP is a score that attempts to take analysts that have been more accurate in the past and with different weightings score the possibility for a beat or miss on earnings…a score of 50 is Neutral (in line)… under a 50, a better chance for  a miss…over a 50, we expect a beat…


Ford’s ESP score for this quarter was 100 . This tells us that a big upside surprise is expected, although no-one knew the number would be as good as it was.


Starbucks Corp. (SBUX) expects 2Q earnings below analysts' view
Starbucks Corp. (SBUX) predicts 2Q earnings below analysts' outlook and expects profit to fall in 2008.  The company warned Wall Street Wednesday that its second-quarter earnings would fall short of analysts' expectations due to the weak U.S. economy and the cost of its turnaround plan. The world's largest coffee retailer said it expects second-quarter earnings of 15 cents per share on a 12 percent revenue increase, down from earnings of 19 cents per share a year earlier. Starbucks has suffered due to a weakening economy and growing competition from rivals including McDonald's Corp. (MCD) and Dunkin' Donuts.

FusionIQ scored a FusionIQ timing SELL signal well in advance of this earnings warning.  Currently its' FusionIQ scores still remain low, suggesting that SBUX is still an avoid even though there may be some temptation to buy the name given its sharp decline over the last several months

Sohu Inc. (SOHU) should continue to benefit as Chinese web use continues to surge
Several days ago we highlighted Sohu Inc. (SOHU), a Chinese internet portal which was experiencing rapid growth tied in part to the upcoming Chinese Olympics.  Now there is a new report out that China's that its fast-growing population of Internet users has soared to 221 million, tying the United States for the largest number of people online, according to government data reported Thursday.  It was a 61 percent increase over the 137 million Internet users reported by the government at the start of 2007.  This explosive growth should continue to drive growth expectation for SOHU for some time.  With a new FusionIQ timing BUY and a 98 Technical Score SOHU still looks attractive here for new buyers. 
To find other Chinese Internet portals sign up to FusionIQ today at https://www.fusioniqrank.com/signup.php

Nuvasive Inc (NUVA) exceeds sales estimates
Spine surgery products maker NuVasive Inc. (NUV) said its first-quarter loss expanded, however revenue increased by 54 percent far surpassing Wall Street estimates. With a FusionIQ master technical score of 87 (out of a possible 100) and our projected target of $47.00 - NUVA offers a good intermediate term trading opportunity.  Given yesterday's large price spike we would suggest average cost buying on weakness makes the most sense.

BIG THREE ETF's - QQQQ, SPY and DIA all still on Neutral Fusion Timing Signals

We have been saying our recent research publications that the market is pretty neutral here as it looks to be trying to form a possible intermediate term bottom.  Today we look at the three main market ETF's, the QQQQ's, the SPY's and the DIA's and not surprisingly all three currently have FusionIQ neutral timing signals.  So neutrality still rules and investors/traders should keep exposure levels in line with the current market directionless until more FusionIQ BUY signals appear on the BIG Three ETF's.
































DCOM registers Fusion Short Squeeze and Breakout

Dime Community Bank Shares (DCOM) yesterday registered both a FusionIQ short squeeze (approximately 12.00 % of its DCOM's float is short) and a breakout (shares traded up yesterday on over 3x its 21-day average volume).  It appears that many of the smaller banks are doing well since they likely have no mortgage exposure and therefore offer less risk potential to investors.    With a point and figure target of $ 25.50 DCOM shares offer good return potential from present levels. 

Rails still chugging along

Contrary too popular opinion the transports are holding up quite well in the face of soaring crude oil prices.  In particular the rails have been the standouts within the transports.  Those in the know suggest the  reason the rails are doing well in the face of rising crude is because business is booming as the rails are benefit from moving all the coal across the country that is being so aggressively mined.  Below we have attached a table of some select rails with their respective FusionIQ Master Technical Scores. The high scores suggest the rails still offer attractive potential here.

ImClone Systems (IMCL) scores high volume breakout
Shares of biotechnology company ImClone Systems Inc. (IMCL - FusionIQ Technical Score - 87) broke out on above average volume yesterday after rival Genentech Inc. (DNA - FusionIQ Technical Score - 49) said its drug Avastin did not improve the overall survival rate of patients in a lung cancer study.  ImClone shares were boosted on this news as it is developing its own rival cancer drug Erbitux.  Erbitux as a lung cancer treatment that would rival Avastin in the lucrative lung cancer treatment market. A previous late-stage study of Erbitux showed it did improve the survival rate for patients.

The technical breakout on IMCL scored a three year price high and as we have all observed momentum tends to begets momentum.  The point and figure target for IMCL on this breakout is $ 63.00 - so there is return potential for those willing to stick their toe in the water.



Hasbro Inc. (HAS) - scores powerful breakout
Hasbro (HAS - FusionIQ Master Score - 86) blew away analysts estimates as earnings jumped 14% to $37.5 million, or 25 cents per share, on 12.6% sales growth to $704.2 million. These sales figures blew past Wall Street's predicted sales of $583.6 million with earnings of 14 cents per share.  Hasbro strong results this past quarter were based in part by strong sales of Transformers, which got a boost from the live-action movie. The company is gearing up for the sequel, as well as the upcoming "G.I. Joe" movie, "Iron Man," and "Indian Jones and the Kingdom of the Crystal Skull."

As seen in the attached chart below HAS has now broken out to all new highs on very bullish volume and institutional sponsorship.  The objective point and figure target for HAS is $ 62.00 and offers good return potential to investors should it bear accurate.

Oil and Gas still a leading sector
The FusionIQ Oil and Gas Index has scored a new high.  It clearly remains an area of leadership in the market.  While there has been a rush to plough into the depressed banking sector names with many investors figuring the worst is over no one wants to be in the Oil and Gas names.  Just as buying the banks on positive sentiment is flawed, since real bottoms occur on excessive negative sentiment avoiding the Oil and Gas Index because sentiment is negative also makes no sense either as tops are formed on over confidence not comments like " those names are extended" 
So though logic would say to avoid the extended names and buy the beaten down names in reality we know the opposite almost always works (ie the strong get stronger and the weak get weaker)
Below we list the FusionIQ Oil and Gas Index components and their respective FusionIQ Master scores.  As seen all the scores are still bullish.

Kimberly Clark (KMB) Ready to Clean Up ? With a 34 rank FusionIQ says not so fast

In this weekends Barron's the magazine cites Kimberly Clark Corp. (KMB) the maker of bathroom tissue and baby diapers as Ready to Clean Up. It cites the stock as cheap according to Chuck Bath, a portfolio manager at Diamond Hill Capital Management in Columbus, Ohio.  Bath cites KMB's forward earnings multiple as cheap as it gets and goes on to say it is significantly cheaper than other consumer-products companies like Procter & Gamble (PG), which fetches a multiple of 19 times 2008 estimates.

However with soaring commodities costs, particularly for pulp and oil, KMB shares remain under pressure.  With a its low FusionIQ score (34) we are not saying Barron's is wrong but we would suggest its score is low for a reason.  So regardless of the so called bullish factors lining up the KMB's low score suggests no one in the institutional community believes the shares are ripe for a turnaround just yet.

National City (NCC) - Still dead money despite cash infusion
National City Corp. (NCC) will get approximately $6 billion from private investors in a deal that provides much-needed capital to the Midwestern bank which had heavy exposure to the mortgage and housing market.  The Wall Street Journal citing unidentified sources said that National City officials were still negotiating final terms of the transaction with a group of investors led by Corsair Capital LLC, a New York private equity group.
Though the headline news sounds bullish NNC with a FusionIQ score of only 27 suggests to us that even though it may get a pop on the news the stock is likely to be dead money for quite some time as it needs major base building before it can start a new secular bull move again.
To see how the rest of the banking sector is shaping up sign up for FusionIQ today at https://www.fusioniqrank.com/signup.php

Sanderson Farms (SAFM) - A daily double - scores FusionIQ Short Squeeze and new Timing Buy Signal
Sanderson Farms Inc. (SAFM) as well as other chicken producers rallied Monday after Pilgrim's Pride Corp. (PPC) said it would cut production because of rising feed costs. The production cuts announced by Pilgrim's Pride Corp. (PPC), the nation's largest chicken processor, are expected to be about 5 percent in the second half of the year.  The move was supported by analysts, who think cutbacks will help control costs and drive up demand.

With a FusionIQ Master Technical score of 90 and close to 26.00 % of its float short in addition to a new FusionIQ timing BUY signal SAFM looks to have the wind at its back.  This positive liquidity squeeze offers plenty of upside return potential and projects an upside price target of $ 56.00 based on objective point and figure counts.

To examine other stocks in the news to gauge their investment worth subscribe to FusionIQ today at https://www.fusioniqrank.com/signup.php

Metallico Inc (MEA) scores high volume breakout - breakout targets to $ 23.50

Metallico Inc (MEA) is a recycler that is enjoying rising margins and pricing power as scrap is in demand in the U.S. and overseas, mainly India and the Middle East.  Scrap metal recycling remains robust, mainly because of strong demand from steel mills.  In fact just yesterday MEA scored a new FusionIQ timing BUY signal.  While short-term shares may be extended and in need of a pullback its point and figure target of $ 23.50 (coupled with its FusionIQ master rank of 80 and 89 technical score) suggests that pullbacks will offer investors a good entry from a risk / reward basis.

Sohu.com Inc. (SOHU) - Chinese Portal scores short squeeze breakout. Company benefiting from Chinese

Sohu.com Inc. an Internet portal in China recently broke out on close to 2x its 21 day average volume.  With a fairly large base and almost 23.00 % of its float short SOHU shares look like they can continue to power high as a liquidity squeeze takes place.  Usage is up at its portal and the company is also benefiting from the pending Chinese Olympics.  The point and figure target for SOHU shares is $ 67.00.  Given the large price spike recently we would think some minor consolidation may occur so buying shares on pullbacks on an average cost basis makes the most sense.

IBM's Q1 earnings jump 26.00 %. Additionally the company increases outlook

Given the back drop of a very strong quarter and a FusionIQ master score of 85 and a FusionIQ technical score of 95 IBM certainly warrants a strong look here as a potential investment.

NFLX still bullish

Netflix Inc. (NFLX) scored a timely FusionIQ BUY signal back in February in the mid 20's and the stock subsequently ran.  Recent activity in shares still looks like a bullish pause or consolidation before shares look to move higher.  With a Fusion IQ Master score of 86 and a FusionIQ technical score of 97 things still appear bullish for NFLX.  As we always say we love stocks that act well when most stocks don't and NFLX has weathered this corrective activity better than the majority of stocks out there.  This conviction on the part of buyers to boost shares in the face of general market weakness is bullish.  Though it sounds absurd the present point and figure target on NFLX is $ 61.00, so assuming there is some validity in this unbiased price projection there is still plenty of upside left for investors that missed the earlier FusionIQ BUY signal.

Energy and Commodities still dominate top ranks

As we pointed out several months ago, commodity based groups, particularly in the energy sector had been (and still are) the markets only real source of strength.  As the attached table shows this still continues to be the case with only 2 of the top 25 ranked FusionIQ stocks (EDA and DMX) not being a commodity based company or ETF.  Investing is all about themes and the commodity theme is the only theme showing any durable trends at present.  So until this changes expect these names to continue to dominate performance and ranking tables even if they suffer minor pullbacks along the way,

Coca-Cola (KO) profit jumps 19 pct in 1st-qtr as sales soar
Coca-Cola Co. (KO) saw its first-quarter profits rise 19 percent on a 21 percent increase in sales. These results beat the expectations of Wall Street analysts. The Atlanta-based company said Wednesday its profit was $1.50 billion, or 64 cents a share, for the three-month period ending March 28. This compared to a profit of $1.26 billion, or 54 cents a share, in the same period a year earlier. Analysts polled by Thomson Financial were expecting earnings of 63 cents a share in the quarter.
On the heels of KO's good earnings report and its FusionIQ Master technical score of 94 - we would suggest KO shares are worth looking at here as both the technical and fundamentals support a higher outlook.  Additionally KO's defensive nature as a beverage company is likely attracting buyers in this period of uncertainty.

Streetwatcher upgrades - MON and CAM

We normally don’t pay attention to analyst upgrades as we tend to view them as lagging indicators.  However we do pay attention when analysts upgrade stocks that have high FusionIQ ranks.  Yesterday two names were upgraded that may bear watching over the coming days/weeks as their FusionIQ scores indicate that the analysts new bullishness may be warranted.













CROX Warns - shares plummet

Fad shoemaker Crocs Inc. (CROX) continues to disappoint as the company plunged in premarket trading early Tuesday after the casual footwear company lowered its first-quarter profit forecast.  This warning prompted a downgrade and lowered outlooks from several analysts. Shares of Crocs fell $4.83, or 27.2 percent, to $12.96 in premarket trading.  Crocs slashed its first-quarter outlook, blaming slower sales and expenses related to the closure of its Canadian manufacturing plant.  

As seen in the chart below FusionIQ had numerous short-term timing sell signals including one just several weeks back when shares were trading in the mid $ 20’s.

For more timely FusionIQ timing signals sign up today at https://www.fusioniqrank.com/signup.php

Airline sector still a grounded

With a host of issues and crude at record highs the airline sector continues to take it on the chin.  While there is the temptation to look at this group as a long term bargain, the industry remains a hard business model to make money in as it is tied to economic cycles, the ebb and flow of oil prices and is still saddled with high cost structures due to large union presence.  That said we would continue to avoid this group even though the temptation maybe to put them away for the long-term.














Major Airline FusionIQ Techical Ranks 

Southwest (LUV) - 39

Delta (DAL) - 32

Continental (CAL) - 30

Northwest (NWA) - 18


Wachovia another bank with problems - FusionIQ Score 27

Wachovia Corp. (WB) will slash its dividend and raise $7 billion in a share sale after reporting a surprising first-quarter loss on Monday of $393 million.  The first-quarter loss for the Charlotte-based bank works out to 20 cents a share. That compared with profit of $2.3 billion, or $1.20 a share, a year earlier. Excluding merger-related and restructuring charges, the bank lost $270 million, or 14 cents a share. Revenue fell 4.5 percent to $7.89 billion from $8.27 billion last year.  The results, tainted by exposure to credit markets, were worse than analysts anticipated. Analysts surveyed by Thomson Financial had expected Wachovia to earn 40 cents per share on revenue of $7.98 billion. The earnings estimates typically exclude one-time items. The nation's No. 4 bank said it will cut its dividend by 41 percent to 37.5 cents per share from 64 cents per share.


Before you think of going bottom fishing on WB shares note the low FusionIQ master score of 27, which suggests shares are likely to be out of favor for a while, if not continue to move lower.


NASDAQ FOUR HORSEMAN REVISITED - GOOG, BIDU and AAPL are weak, while RIMM bucks the trend

Back in February we highlighted NASDAQ's new four horseman; GOOG, BIDU, AAPL and RIMM.  We suggested that the former three were is big trouble as they were low ranked in FusionIQ and also were on FusionIQ timing Sell signals.  Subsequently these issues all fell really hard.  At the time only RIMM was bullish in FusionIQ and the stock has performed quit admirably during the current market weakness.  As we revisit these names now we see that FusionIQ was very accurate in its then implied prediction.  As it presently stands GOOG, BIDU and AAPL would remain avoids and if we were betting on a horse it would have to be RIMM and its FusionIQ master technical score of 94.









































ICO - Coal stock with a big short

International Coal Group, Inc. (ICO), a coal miner in the northern and central Appalachia and the Illinois basin which we featured to subscribers last week in our Chart of the Week, scored a high volume short squeeze surge breakout again on Friday in the face of a weak tape.  Stocks trade up in poor tapes always attract us as it is on these days it would be very easy for buyers to step away.  With almost 22.00 % of the float short ICO has a big liquidity catalyst to propel shares higher and the coal sector has been red hot of late. The point and figure target for ICO shares is $ 9.25 giving investors a nice percentage return if the target is reached from present levels.


NKE - Just Doing it !!

Nike Inc. (NKE), the world's largest athletic-shoe maker, rose the most in almost eight years in New York trading recently on the heels of higher international sales helping third-quarter profit exceed analysts' estimates.  Led by sales in China which surged more than 50 percent as consumers bought shoes and clothing ahead of this summer's Olympic Game.   Additionally, CEO Mark Parker shed the Bauer hockey unit and bought Umbro Plc, a maker of soccer attire, as the focused the company on six areas and lured customers with Mercurial Vapor cleats and Air Max running shoes.


Net income surged 32 percent to $463.8 million, or 92 cents a share. Revenue rose 16 percent to $4.54 billion, ahead of the $4.35 billion estimated by analysts.  


With a FusionIQ master technical score of 93 and a FusionIQ overall score of 83 (out of a possible 100) and a bullish pennant consolidation pattern, NKE shares still look rock solid here.  The current point and figure target for NKE shares is $ 83.00 – so it looks like there is still plenty of upside left for those who have not participated in the recent move.

GE misses. With a FusionIQ score of only 54
General Electric Co. (GE) reported a smaller-than-expected first-quarter profit on Friday and lowered its outlook for fiscal 2008. GE cited a slowing economy for hurting results at its' financial division.  Earnings from continuing operations totaled $4.4 billion, or 44 cents per share, down 8 percent year-over-year. Revenue climbed 8 percent to $42.24 billion from $39.20 billion, with global revenue up 22 percent. Analysts surveyed by Thomson Financial expected profit from continuing operations would be 51 cents per share on revenue of $43.68 billion. The company had forecast profit of 50 to 53 cents per share.

"Demand for our global infrastructure business remained strong, but our financial services businesses were challenged by a slowing U.S. economy and difficult capital markets," GE Chairman and CEO Jeff Immelt said in a statement. 

Recently GE scored a short term FusionIQ timing BUY and went up approximately 6 % in the ensuing days that followed the signal, however its' more important metric its FusionIQ overall master score, which rates its technical and fundamental characteristics is only a 54 (out of a possible 100).  That said look for continued weakness in GE shares going forward.

Concerned about one of your stocks ?  Sign up for FusionIQ today at https://www.fusioniqrank.com/signup.php to monitor your holdings.



Tween Brands Inc (TWB) - look out below - STILL !!
Tween Brands (TWB), the New Albany, Ohio, operator of the Limited Too and Justice for Girls retail chains said it expected earnings of 12 to 17 cents a share for the quarter ending May 3. In February, it issued guidance of 35 to 40 cents a share. Wall Street analysts, on average, expected earnings of 37 cents. An anticipated same-store sales drop of 7% to 9% at the company's flagship Limited Too chain as well as a four cents a share impact from the abrupt March 6 resignation of Limited Too President Jill Dean contributed to the lower outlook, Tween said in a press release. Limited Too's sales were weak for the last two weeks of February and most of March, the company said. Tween Brands Chairman and Chief Executive Mike Rayden said spring sportswear failed to attract its target customer, and that required some major shifts.
While yesterday's 23 % drop in share price may seemed to have priced in the worst case scenario - the point and figure target of $ 8.00 suggests there is a lot more room on the downside.  Please note the timely FusionIQ Sell Signal on ly a few weeks before yesterday's big drop.
To get other timely FusionIQ buy and sell signals subscribe today at  https://www.fusioniqrank.com/signup.php

With the exception of Wal-Mart and Costco - most retailers disappoint

As retailers reported sales results on Thursday, Wal-Mart Stores Inc (WMT) and Costco Wholesale Corp. (COST) were among the few winners, as shoppers stuck to basic goods. Wal-Mart raised its earnings outlook, noting that better inventory control helped to limit markdowns on merchandise. It also said that April sales should top previous expectations.  But March proved to be weak for most others, including J.C. Penney Co. (JCP), Gap Inc. (GPS), and Limited Brands Inc. (LTD).  All of them reported sharp drops in sales. Record gas prices, rising food costs, a weaker job market, slumping home prices and an early, frigid Easter were cited as the culprits. 

Below we list the FusionIQ master technical scores for the aforementioned retailers.


The Good

Wal-Mart Stores Inc. (WMT) - FusionIQ Technical Score - 91

Costco Wholesale Corp. (COST) - FusionIQ Technical Score - 86


The Bad

Gap Stores Inc. (GPS) - FusionIQ Technical Score - 63


The Ugly

Limited Brands Inc. (LTD) - FusionIQ Technical Score - 31

JC Penney Company Inc. (JCP) - FusionIQ Technical Score - 16



Inflation Adjusted Crude at New Highs

One of the reasons the markets have been struggling to get their footing of late is the sharp run up in crude oil.  As the attached chart below shows crude oil is now more expensive on an inflation adjusted basis than it was in the 1970's when lines at the gas pump where stretching for miles.  This is clearly a drag on the market and the economy as crude oil is pervasive in regards to the variety of economic sectors it affects.

Airlines still grounded

With crude prices surging the FusionIQ Airline Group still remains under pressure as seen in the chart below.  With an average FusionIQ score for the group of only 31 (out of a possible 100) this group still remains one of the weaker groups within FusionIQ and should continue to be a large underweight status in any portfolio.  To further emphasize their current weak state 25 of the 27 airlines within the group currently have either neutral or sell FusionIQ timing signals.

UPS Warns cites weaker economy and fuel costs
UPS Parcel Service Inc, (UPS), the world's largest shipping carrier, pointed to a weaker economy and higher fuel costs in trimming its earnings forecast. UPS warning comes on the heels of investors earlier this week receiving reports from aluminum producer Alcoa Inc. (AA) and chip maker Advanced Micro Devices Inc. (AMD) that have made the market uneasy about overall first-quarter results. The surge in oil prices weighed on transportation stocks and contributed to a pessimistic tone in the market. Crude prices jumped following a government report showing U.S. inventories fell by more than expected last week.
With a FusionIQ score only 49 out of a possible 100 UPS looks like it will continue to struggle and should be avoided.

Online Spending expected to Surge - FusionIQ E-Commerce Group still sluggish
Online spending is expected to rise a robust 17 percent this year, despite a sluggish economy that has bruised many brick-based retailers, according to an annual survey to be released Tuesday.  Retail sales online, excluding travel purchases, are set to grow to $204 billion in 2008 from $174.5 billion last year, fueled by sales of apparel, computers and autos, according to a survey conducted by Internet analysis firm Forrester Research for Shop.org, the online arm of the National Retail Federation trade group. 
That said we offer a chart below of the FusionIQ E-commerce group, which has a bearish FusionIQ group technical rank of 36.  Clearly the steep downtrend in the chart suggests investors don't believe the rosy projections for E-commerce sales to be accurate.  With the exception of PCLN (FusionIQ rank 99) this still looks to be a group to avoid.

Oil and Gas Drilling - leading FusionIQ Group

The Oil and Gas drilling group is at new highs after consolidating for much of 2006 and is one of the top rated groups in FusionIQ.  As seen in the attached table almost all the issues within the group have high FusionIQ scores with the exception of PKD.  This is clearly one of the markets new leadership areas and investors should look to increase exposure to this group.














Symbol Group Tech
   NBR Nabors Industries Ltd 96
   NE Noble Corp 96
   RIG Transocean Inc 96
   BRNC Bronco Drilling Co Inc 88
   PDS Precision Drilling Trust 75

Grupo Simec, S.A. de C.V. (SIM) - Steel Stock Breakout

Grupo Simec, S.A. de C.V. (SIM) a steel producer (FusionIQ technical score 85) broke out on almost 2.5 x its 21-day average volume on Friday. Additionally it scored a FusionIQ new timing BUY signal on Thursday.  With good group momentum and a point and figure target of $ 18.50 SIM shares offer good reward potential.  Average costing into shares off the open and on pullbacks towards the $ 12.20 - $ 12.10 area looks to be a good trading strategy.

McMoran Exploration (MMR) - A double play - a NewFusionIQ Short Squeeze and Breakout
It is baseball season and everyone likes to turn two !!  MMR shares scores the rare FusionIQ double play registering on both our short squeeze and breakout screen.  With 20.51% of its float short, a new FusionIQ timing BUY signal and volume expansion 3x its 21 day average volume MMR shares look to have runaway bullish momentum. 
The point and figure target is $ 28.50

Even though we like the Ford Fusion (pun intended) - its FusionIQ rating remains too low still !

In this weekends Barron's the magazine talks about Ford (F) as a possible double in price from its current levels citing that the company has billions in excess liquidity; a new-model rollout is approaching in addition to management selling secondary assets.  While this all sounds great Ford (F) as seen in the chart below Ford (F) shares only recently made a new 52 week low and it still only has a 42 ranking on its' FusionIQ Master Score.  Now this does not mean that Barron's is wrong and FusionIQ is correct, however its low FusionIQ rating suggests that investors by and large don't have much confidence in the turnaround either yet.  The reason for investor apathy may be the latter points which Barron's suggests in its article; consumers are pinched, economic data is weak and car sales are down. 

Although we have to like any company that has a product line named Fusion - we think its premature to call Ford a double yet.  Our advice set an alert in FusionIQ to let you know Ford (F) shares are back in bullish category (ie.  a master score above 70).














Ryland Group (RYL) - Has this homebuilder bottomed ?

There has been a lot of banter among institutional investors lately about the homebuilders potentially bottoming.  While this may be the case based on the massive amounts or short interest and improvement of news flow it may not align with the longer-term macro issues facing the builders.  However it does not mean there can’t be a strong rally given the temporary reprieve of bad news flow and the aggressive short interest.  That said we examine RYL in this blog post with some technical work. 

As seen presently RYL is testing a down trend line in tact since the 2005 peaks. 

We remain technically Neutral on RYL shares pending the breakout of this downtrend, though we do recognize the chart set up as potentially bullish (waiting confirmation of the trend line break).

For a more detailed report please go to www.fusioniqrank.com and sign up today !!

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