May 2008 Archives
Machinery - Pumps Group bucks recent market weakness

Groups that act strong during times of market weakness always stand out as they show a conviction on the part of institutional buyers.  In a tape when buyers could easily walk away such as last week, a group making new highs such as the Machinery/Pumps group definitely stands out.  Below we list the group components as well as highlight the group chart, which is at new highs.






Martek Biosciences Corp. (MATK) - New FusionIQ Short Squeeze
Shares of Martek Biosciences Corp. (MATK - FusionIQ 86 Technical Score / 74 Master Score) jumped to its' highest price in more than two years after the company teamed with Dow AgroSciences LLC to develop and sell a special type of canola seed.  The companies will make a canola seed that produces the omega-3 fatty acid, docosahexaenoic acid (DHA), which is considered important for proper brain and eye development and function. The production of a DHA canola oil by Dow and Martek is viewed as a cheaper option for various food uses.
With close to 25 percent of its float short and a point and figure target of 45.00 MATK shares offers investors good intermediate term return potential.

Hub Group Inc (HUBG) - scores FusionIQ short squeeze and BUY signal
Hub Group, Inc. (HUBG) a full-service transportation provider, offering intermodal, truck brokerage, and logistics services scored a new FusionIQ short squeeze (over 13 percent of HUBG float is short) as well as timing BUY signal.  With a point and figure target of $ 57.00 HUBG offers good return potential to investors looking for a good investment opportunity.
To see more short squeeze names subscribe today to FusionIQ at

Enterprise Software Names - BMC, ORCL and SY strong
The technology space has been getting stronger of late, particularly the enterprise software sector where both Sybase Inc. (SY) and BMC Software (BMC) have recently reported strong quarters.  Additionally sector bellwether Oracle Corp. (ORCL) is also highly ranked in FusionIQ.  If you are looking to put money to work in the tech sector this is clearly the space that is being rewarded by investors.
FusionIQ Master Technical Scores
Sybase Inc. (SY) - 99
Oracle Corp (ORCL) - 99
BMC Software (BMC) - 98

Perry Ellis Intl. (PERY) reaffirms guidance and scores FusionIQ short squeeze
Perry Ellis International Inc. (PERY) scored a new FusionIQ short squeeze after the men's apparel maker reaffirmed its earnings forecast for fiscal 2009.  Perry Ellis Chief Executive Officer George Feldenkreis told investors and analysts during a conference call that the government's stimulus package and other measures to alleviate financial stress should have a positive effect into 2009 on consumers' buying power.  " At this point, we feel that the worst might be over," Feldenkreis said.  Perry Ellis yesterday said it expects profit in the range of $1.95 to $2.00 a share for the 12 months ending Jan. 31, 2009, with revenue of $910 million to $925 million.
Given the economic stimulus is most likely to find its way into the retail channel we agree that retailers such as PERY will benefit in the coming months.

Sanderson Farms (SAFM) - revisiting an earlier post
Back on April 21st we wrote the following post on Sanderson Farms Inc. (SAFM) - " 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. "

At the time we published the original post SAFM has just scored both a FusionIQ short squueze and breakout.  Stocks that score both short squeezes and breakouts simultaneously tend to have powerful institutional liquidity powering them.  SAFM shares were priced 41.70 at the time of the original post and they have since rallied over 14.00 % to 47.71.  Our then point and figure target of 56.00 still stands. 


To find more stocks that show up as both short squeezes and breakouts sign up today at

Retailers still a mixed bag

The FusionIQ retail-apparel/shoe index still remains a mixed bag with a few retailers scoring high FusionIQ ranks (JCG, BKE, ARO and ROST) while many (HOTT, CHRS, CHIC and GPS to name a few struggle).  We would imagine government stimulus checks which should be received in the coming days, weeks and months and will find their way as disposable income into the retail apparel sector at some point soon.

FusionIQ Custom Screener - Above Average Volume Buys

Please find in the attached table a list of above average volume BUYS cultivated off the FusionIQ custom screener.  This screen looks to find stocks that are on new FusionIQ timing BUY signals but are moving up on above average volume a sign that institutional accumulation (a driver of equity prices) is building.

Software Strong - BMC reports good earnings is ORCL next ?
A few days back BMC Software (BMC) reported earnings that bested analyst expectations.  Today it was Oracles (ORCL) turn to have a strong day as shares rose bucking the rest of the weak tech sector.  The strength was attributed to Barron's which cited that CEO Larry Ellison's acquisition strategy is working and maybe not fully valued by the street.  With a 100 Technical score with and an 83 Master score we certainly concur with Barron's that ORCL looks strong here and offers an attractive stock in an attractive sector (software)

Geomet Inc. (GMET) scores FusionIQ Price Breakout
Geomet, Inc. (GMET) which explores for, develops, and produces natural gas from coal seams (coalbed methane) scored a rare FusionIQ Daily Double landing on both the Fusion short squeeze screen as well as the breakout screen.  Yesterday shares exploded out of a base on above average volume and have an aggressive point and figure target of $ 13.50, offering ample upside potential for those looking for an oil and gas play.

Rowan Cos (RDC) scores FusionIQ short squeeze

Rowan Companies, Inc. which performs contract drilling of oil and gas wells in the United States and internationally scored a high volume FusionIQ short squeeze on Friday as it broke out on almost 2 1/2 times its normal 21-day average volume.  With close to 12 percent of its float short and a point and figure target of 62.00 RDC still has solid upside potential.

BMC Software (BMC) breaks out
Shares of BMC Software (BMC) broke out on Friday after it beat analyst's expectations for the fourth quarter. Revenue rose 11.3% to $466.9 million, topping the Street's expectations of $460.3 million. Net income jumped 54.5% to $97 million. Excluding special items, EPS was 63 cents. Analysts were looking for EPS of 51 cents.

With a new FusionIQ timing BUY signal and a point and figure target of $ 62.00 BMC clearly offers good return potential.

Homebuilders still a mixed bag ahead of construction data
As seen in the attached table of homebuilders the group is still a mixed bag with several homebuilders scoring high FusionIQ technical scores but many still with extremely low scores.
Today the group should be active as the Commerce Department is expected to report that construction of new single-family homes and apartments declined in April by about 0.7 percent to an annual rate of 940,000 units, according to the median estimate of economists polled by Thomson/IFR. Building permits, a harbinger of future activity, are anticipated to fall as well.

Myriad Genetics, Inc. (MYGN) - New FusionIQ Short Squeeze
Myriad Genetics, Inc. (MYGN) which develops and commercializes genes involved in major common diseases including cancer, cardiovascular disease, and central nervous system disorders scored a new FusionIQ short squeeze yesterday as shares which have 25 percent of their float short shot up aggressively on close to 2 times its normal 21-day average volume. 
Additionally, MYGN shares also scored a new FusionIQ timing BUY signal yesterday. 

Skyworks Solutions Inc. (SWKS) - New FusionIQ Short Squeeze
Shares of Skyworks Solutions Inc. (SWKS) which rose in afternoon trading Wednesday after an Oppenheimer analyst said the company's margin outlook appears within reach.  Subsequently the price target was raised as well as estimates. The stock gained 74 cents, or 8.7 percent, to $9.25. Woburn, Mass.-based Skyworks makes semiconductors for cell phones.
With a FusionIQ technical rank of 100 and 12 percent of its float short, we expect shares to keep running.

SINA - the other Chinese portal

A few days back we revisited our earlier SOHU post.  SOHU shares have been on fire since we posted.  Now we look at SINA, the largest Chinese portal and as seen in the chart below it also scored a very timely FusionIQ BUY signal back a few weeks ago.  With its 100 FusionIQ technical score SINA looks to still have a lot of upside.

FusionIQ Custom Screener - Above Average Volume BUYS
Today we highlight the power of FusionIQ's custom screener.  FusionIQ allows users to choose among traditional metrics as well as Fusion's proprietary metrics to create targeted trading screens.  Find below a custom screen we run everyday which shows stocks that are trading up on above average volume and also scored new FusionIQ timing BUY signals.
To create custom screens like this as well as others sign up today at

Western Digital Corp. (WDC) - New Short Squeeze and Breakout

Yesterday WDC shares scored a new FusionIQ short squeeze as well as a break out.  The stock traded up on over 2.6 times its 21-day average volume as its near 11.00 percent short to float percentage caused a price squeeze.   The breakout comes on the heels of Western Digital presenting at the Robert W. Baird Growth Conference.  The short term point and figure target for WDC is $ 40.00, however we are more aligned with the notion that today’s significant price breakout more closely aligns with some of the higher fundamentally derived targets on the street such as $ 46.00 at Thomas Weisel Partners and $ 44.00 at Needham and Co.


Highlights from the conference include WDC management citing healthy overall trends in the HDD industry driven by competition and industry consolidation.   Additionally, WDC management outlined the success of the KOGM acquisition, which has transformed WDC into a fully integrated manufacturer.


Giving the extended price short-term pullbacks would offer better entry points.

Revisiting an April Post - Inc. (SOHU)
On April 24th we highlighted Sohu Inc. (SOHU), a Chinese internet portal which was experiencing rapid growth tied in part to the upcoming Chinese Olympics.  We cited a 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.  This was a 61 percent increase over the 137 million Internet users reported by the government at the start of 2007.  We then suggested this explosive growth would continue to drive growth expectation for SOHU for some time.  Also at the time we cited its new FusionIQ timing BUY and 98 Technical Score and suggested shares looked attractive to new buyers. 
SOHU's price on April 24th was in the high $ 50's.  Yesterday as seen in the chart below SOHU closed at $ 82.20.

Research in Motion (RIMM) powers to new highs
Shares of Research In Motion Ltd. (RIMM) surged to a new all-time high Monday as it unveiled the Bold, which is its first major new BlackBerry model in more than a year.  RIMM said Monday that the Bold, which has twice the screen resolution of the company's current Curve device, dual-band Wi-Fi and GPS capabilities, will be available from carriers this summer.  AT&T Inc. said Monday that it will be the exclusive carrier for the Bold in the U.S.; its 3G network is the only one stateside that is compatible with the first model of the handset.

Jim Suva, an analyst from Citi Investment Research analyst predicted Bold could raise RIMM's quarterly device shipments by 200,000 to 400,000.

Also Monday, RIMM, Royal Bank of Canada and Thomson Reuters PLC said they will invest $150 million in a venture-capital fund for investing in companies making software for BlackBerries and other mobile devices.

Real Networks (RNWK) jumps on gaming spin off
Shares of RealNetworks (RNWK), which operates the Rhapsody online music service and provides the RealPlayer media player, scored a FusionIQ breakout after it said it intends to spin off its casual gaming business into a separate company and distribute the shares to RealNetworks stockholders. RealNetworks said it may hold an initial public offering and sale of some of the unit's stock before spinning it off.

Additionally on Thursday, RealNetworks reported first-quarter revenue above analysts' estimates and predicted second-quarter revenue above analysts' estimates. Though it only has a 58 FusionIQ score the point and figure target of $ 12.00 does offer good potential for those who may want to be early. Given the high volume gap and price surge we would suggest buying a pullback.

Revisting an earlier post " Is the Magic Back ?"

Back in February we published a blog post on Walt Disney (DIS) after Barron's wrote a glowing story entitled " The Magic is Back " about Walt Disney and its prospects for the future. We said back then that Disney's FusionIQ ranking was only a 58 out of a possible 100 and that at this point with only a 58 ranking it is still a bit early to believe the magic is back for good. We then suggested the best plan of attack was to wait for its FusionIQ rank to move back into bullish mode again by seeing its ranking score move back to 70. 

Well for the first time in several years DIS is back to a FusionIQ score of 70. That said we now concur with Barron's that Disney may indeed be back !

Symantec Corp. (SYMC) - Moves back into bullish FusionIQ decile class
Symantec Corp. (SYMC) on the heels of a very strong quarter which saw profits more than triple and best analyst foreign sales estimates rose back above 70 for the first time in quite some time. The company cited a 15 percent surge in foreign sales, which accounts for 53 % of the company's overall sales as the catalyst to the strong quarter.  The 70 level in FusionIQ is the level where stocks move back into bullish mode.  So SYMC's move back into the greater than 70 score class for the first time bears noting. 
The point and figure target on SYMC of 27.50 suggests SYMC still has plenty of upside.  Given the recent strong price spike pullbacks may offer a better buying opportunity,

New Gold Inc. (NGD) - FusionIQ triple play

New Gold Inc. (NGD) is a natural resource company focusing on the exploration and development of its copper-gold project located in British Columbia, Canada.  Yesterday NGD scored a rare triple play scoring a FusionIQ short squeeze, breakout and new timing BUY signal.  The objective point and figure calculated target is a whopping 17.25.

FusionIQ Custom Screening - Volume BUYS

We continue to highlight the power of FusionIQ by showing its custom screening ability.  Today using FusionIQs custom screener we have created a list of stocks that traded up on above average volume but also scored new FusionIQ timing BUY signals.  As a FusionIQ user one can create unlimited screens using Fusion metrics as well as traditional metrics to create various trading and investment opportunities.

Retailer Post Results

The Strong FusionIQ Retailers - WMT and COST


Wal-Mart (WMT), FusionIQ Technical score 97 - which is rolling out more discounts, reported a 3.2 percent gain in same-store sales. The world's largest retailer said business was helped by strong sales in grocery and health items as well as entertainment products like flat-panel TVs, video games and game consoles. The company said apparel sales continued to recover, despite cold weather, but home furnishings sales were weak.

Costco (COST), FusionIQ Technical Score 97 - reported an 8 percent increase in same-store sales, surpassing the 6.1 percent estimate.


The Weak FusionIQ Retailers - TGT, GPS, JCP, LTD and ANF


Target Corp. (TGT), FusionIQ Technical Score 49 - posted a 3.1 percent gain in same-store sales, below the 4.5 percent estimate.

Gap Inc (GPS), FusionIQ Technical Score 47 - suffered a 6 percent drop in same-store sales, worse than the 1.9 percent analysts anticipated.

J.C. Penney (JCP), FusionIQ Technical Score 45 - reported a 1.7 percent decline in same-store sales, though that was better than the 4.6 percent decline analysts expected.

Limited Brands (LTD), FusionIQ Technical Score 40 - reported a 5 percent drop in same-store sales, worse than the 2.3 percent analysts forecast.

Abercombie & Fitch Co. (ANF),  FusionIQ Technical Score 36 - reported a 6 percent gain in same-store sales, surpassing the 2.3 percent estimate.

FusionIQ top 25 ranked groups

As seen in the table below the top 25 ranked FusionIQ groups based on master technical score still have a decided energy and commodity theme.  While these groups have been leaders for a while they still remain the leaders and should continue to be overweight status until their FusionIQ scores drop below 70.

Enersys (ENS) - New FusionIQ Short Squeeze

With crude oil prices rising anything related to alternative energy or the global green theme is catching a bid.  Enersys (ENS) a battery systems company has recently broken out a sold base and scored a new FusionIQ short squeeze and timing BUY signal yesterday.  With almost 27 % of its float short ENS is likely to keep rising after it consolidates for a day or so.  The point and figure target is $ 49.50 - so there is appears to be plenty of upside left.

Fusion Custom Screening - All Cap Value Names

Using FusionIQ’s powerful custom screener users can create targeted lists of stocks based on different criteria.  Today we create an all cap value screen with high FusionIQ technical scores.  The result is in our opinion better than a list based on only value criteria as you are now incorporating the all important aspect of price momentum.

Clearwire (CLWR) and Sprint Nextel (S) merge

Clearwire (CLWR) and Sprint Nextel (S) are planning to merge their wireless broadband units to create a new $14.55 billion wireless communications company.  The new company, to be named Clearwire, will receive a $3.2 billion investment from Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc. and Bright House Networks. The investment is based on a target price of $20 per Clearwire share and will give the companies a 22 percent stake in the new venture.  Overland Park, Kan.-based Sprint Nextel Corp. will be majority owner with a 51 percent equity stake, while existing Clearwire shareholders will receive about 27 percent interest.


While the merger appears bullish both stocks pre-merger had very low FusionIQ score so we would suspect the jury will be out on the new company for some time to come.
















Swift Energy Co (SFY) - FusionIQ Short Squeeze and Breakout

Swift Energy Co. (SFY) broke out yesterday on 1.5x its 21-day average volume.  The stock scored both a FusionIQ short squeeze and breakout.  With energy stocks still dominating the top decile classes of FusionIQ and almost 17.00 percent of SFY’s float short, shares could continue to work markedly higher over the next several months.  The point and figure price objective of $ 80.00 also echoes that same sentiment.

Oil breakout pressuring the market

As the chart below shows inflation adjusted crude has clearly broken out to all new highs.  This is certainly making it hard for the market to try and get above its various resistance levels the last couple days.  We would surmise that as long as crude keeps working higher the markets will have a tough time making any upside headway.

Marvel Enterprises Inc (MVL) - Iron Man Rocks the Box Office
Iron Man, the Marvel Comics adaptation, starring Robert Downey Jr., hauled in $100.7 million over opening weekend and $104.2 million since debuting Thursday night, the second-best premiere ever for a non-sequel, according to studio estimates.  The film also scored overseas with $96.7 million in 57 countries where it began opening Wednesday, putting its worldwide total at $201 million.  Distributed by Paramount, "Iron Man" was the first release by Marvel Studios, which has begun financing its own productions after such studio-backed hits as the "Spider-Man," "X-Men" and "Fantastic Four" flicks.

With a FusionIQ Technical Score of 96 and almost 22 percent of the float short MVL shares are likely to keep squeezing higher as its $ 42.00 point and figure target suggests. 

Energy and Coal names still dominating the New Highs list

Tracking the new 52 week high list is a good shortcut to see what the market is paying a premium for and what the groups are leading.  A quick look at our FusionIQ new high table shows the usual suspects energy and coal are still working.

Merger of Equal - MSFT & YHOO

Much has been made of the possible merger of Yahoo (YHOO) and Microsoft (MSFT) merger.  While on the surface this seem to be a very bullish strategy for Microsoft as it looks to compete with Google, clearly the low FusionIQ scores on both Yahoo (55) and Microsoft (41) suggest merger or no merger the street is not in love with either stock at the moment.  Not that stocks with low FusionIQ scores can’t move higher, however stocks with scores below 60 tend to be laggards for quite some time, so while these two names dominate the news neither seem to be a good investment candidate at the moment.  Today Microsoft withdrew its $ 44 Billion bid for Yahoo causing Yahoo shares to plummet. 














FusionIQ Short Squeezes

Everyday FusionIQ has a variety of trading screens it generates to its users.  One of the most robust is the FusionIQ proprietary Short Squeeze screen.  The table below lists stocks on today’s list.  These are issues that have a large percentage of their float short and have recently moved up in price on above average volume.  These names tend to generate large short term price moves when they work as buyers and short sellers converge to create a buying vacuum.


To see more FusionIQ trading screens sign up today at


Top 25 ranked FusionIQ Groups

Looking at the top 25 groups in FusionIQ based on Master Technical score there is still a decided flavor towards energy, commodities and industrials.  This still remains a dominant investment theme, even though a lot of the easy money has likely been made in these sectors already.

Two key TECH ETF's score new FusionIQ timing BUYS

The QQQQ (Powershares QQQ) and the XLK (Technology Select Sector SPDR) two key tracking stocks for the technology sector both scored new FusionIQ Timing BUY signals.  Now while this doesn’t mean the techs are guaranteed to go up the fact that both of these key benchmarks scored new BUYS after being on NEUTRALS for quite a while does suggest there is a good chance the upside momentum will continue.














Open Text Corp. (OTEX) - FusionIQ Daily Double

Shares of Open Text Corp. (OTEX) rose aggressively yesterday as the information technology company's fiscal third-quarter results, narrowly beat Wall Street estimates. Canadian based Open Text reported quarterly profit of $7.3 million, or 14 cents per share, compared with $3.9 million, or 8 cents per share, in the year-ago period. Excluding amortization charges and other special items, the company recorded adjusted income of 48 cents per share for the quarter ended March 31. Revenue grew 15 percent to $178.8 million from $156.1 million. License revenue rose 20 percent to $51.5 million.


Today OTEX shares showed up on both FusionIQ’s breakout and short squeeze screen suggesting that its upside momentum may be fast and furious after some consolidation.  Its point and figure projected price target of $ 54.00 also suggests this may be the case.

Red Robin Gourmet Burgers (RRGB) - shows up on FusionIQ short squeeze again

Several days back we highlighted Red Robin Gourmet Burgers (RRGB) as a FusionIQ short squeeze.  Shares subsequently shot up 6 percent over the last three days versus only a 0.69 percent return for the S&P 500 over the same period.  Today RRGB again shows up on FusionIQ’s above average volume short squeeze page.  With a point and figure target of $ 57.00 RRGB certainly offers lots of upside potential from present levels and with over 50% of its float short shares have ample pent up buying demand to drive prices higher.



To view more FusionIQ short squeezes sign up today at

Eastman Kodak Co. (EK) 1st quater loss narrows but FusionIQ score still remains low

Eastman Kodak Co. (EK) said Thursday its first-quarter loss narrowed to $115 million, however its’ stock fell more than 5 percent.  Hit by carry-over restructuring charges, the photography products maker lost the equivalent of 40 cents a share in the January-March quarter, compared with a loss of $151 million, or 53 cents a share, a year earlier. Sales rose 1 percent to $2.093 billion from $2.08 billion. Excluding one-time items totaling $2 million, or 1 cent a share, operating losses came to $112 million, or 39 cents a share.

Kodak blamed the shortfall on higher-than-expected tax provisions and increased inkjet printer investments in both its consumer photography and commercial graphic communications businesses. Digital sales rose 10 percent to $1.366 billion from $1.245 billion a year earlier, while traditional film-based revenue continued to slump 13 percent to $724 million from $830 million.

Kodak still remains a perennial investment loser as it continues to tread water near its 52 week lows.  Although the company continues to make a transition to the faster growing digital market its FusionIQ score of only 23 suggests it will be dead money for a while.  We would continue to avoid EK shares.

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