The market can always use a consolidation day or two.  It would be healthy if we can receive that here and there as that helps create favorable setups.  This allows us to feel comfortable that we are about to make some upside headway without the market running away from us.  If we can receive consolidation days every now and then, we will be able to trade with more favorable setups and larger positions that have a strong risk-reward scenario.  What we do not want to see is the big winners in the market being those who blindly predict the upside will not end.  This creates too much of a gambling atmosphere and not enough disciplined trading.

Economic Calendar

Last week’s monthly jobs report was the key data for most investors.  The economic recovery is still intact, although jobs numbers are nothing spectacular, especially taking into consideration the extreme levels of spending it took to achieve this type of modest growth.  This is still the slowest economic recovery in history, but at least it is in the right direction and that is what market players are mostly concerned with.

This week the FOMC announcement on Tuesday is likely the big market driver, if anything.  The concern for bulls is that the bears can gain traction on the lack of future quantitative easing terminology that will likely be noted in this meeting.  Since jobs are moving in the right direction and inflation is always a concern, it would be highly unlikely that the Fed will make it seem like another QE is around the corner.  This could give the bears a little ammunition for the fight, but I don’t expect them to gain too much traction without some very concerning headline news.  The monthly jobs report should keep hopes high for the next few weeks and I feel the bulls will be firmly in charge due to that with weak days being infrequent.

For the FOMC decision on Tuesday, don’t expect much volatility until after the decision.  Many times the day of the decision is drifting action rather than high volume action.

Game-Plan

Late last week I started deploying cash into more positions via my StockTalks.  I plan on growing these positions pending the early action this week.  Tuesday could be a drifting day, so if we drift up before the FOMC decision, I may reduce some of my positions into the decision.  If we drift down on light volume, I may look to increase my positions at favorable prices.  I don’t expect the announcement to be shocking at all as QE should not be on the table right now.

I’ve started a position in Northern Oil and Gas (NOG) again as the chart seems to have bottomed.  I’ve also started a position in Boyd Gaming (BYD).  Both of these plays have short squeeze potential after they have been beaten up.  Celldex Therapeutics (CLDX) is one of my larger swing trades at the moment as the secondary at $3.85 should provide good support and give way for a run higher to allow those from the secondary to profit.  I will continue to search for more trades this week and hope the market does not run away from us.

After the recent weakness, we should be able to find more developments, but if we have a string of days that just keep moving up, it may be complex very soon to find new favorable setups.

If you can’t make it to the live-chat where all the magic begins, you can view my real-time trade updates throughout the day by following me on SeekingAlpha StockTalks.

Stock Radar

I am sticking to stocks showing  overall relative strength for my swing trades.  Preferably, these companies have more cash than debt and valuations showing reason to believe it is undervalued, but more homework is needed to sort through the list. If they have upcoming earnings, I may not trade until after the earnings.  My style does not allow me to hold swing trades into earnings unless I am only holding “profits” into them.

I look for these stocks to pullback towards favorable support levels (the price area designated next to the stock below) where I can start to buy incrementally if the conditions feel safe upon reaching the support area.  Again, the price target is just an area of interest, it is not a firm buy just for touching it.

I am cautious of buying on breakouts unless I am in a very aggressive mode.  This aggressive mode may be just for a day-trade rather than risking the large position overnight where my stop-loss may not protect me from a large gap-down.  Market players have been reluctant to buy stocks on breakouts over the past year and I have adjusted my strategy to be more selective and patient.  If we can gain some very positive sentiment or a QE-based environment, I’d expect that will change.  The first list is my normal weekly radar using my proprietary settings on my stock screener.   For all my radars, I tend to keep four weeks worth before deleting them allowing me to rotate through a greater number of recently bullish stocks.

ACCO Brands (ABD) – $11 to $11.50
Akorn (AKRX) – $11 to $11.50
Alnylam Pharma (ALNY) – $11.50 to $12
ATP Oil & Gas (ATPG) – $8 to $8.50
Avanir Pharma (AVNR) – $2.75 to $3
BioCryst Pharma (BCRX) – $5 to $5.25
Bon-Ton Stores (BONT) – $7
BPZ Resources (BPZ) – $3 to $3.25
Cenveo (CVO) – $4.50 to $4.75
Dice Holdings (DHX) – $9 to $9.50
Cal Dive International (DVR) – $3.50
Endologix (ELGX) – $12.50
Callaway Golf (ELY) – $6.75
Endeavour International (END) – $11.75
Helix Energy Solutions (HLX) – $18 to $18.50
Keryx Biopharmaceuticals (KERX) – $4 to $4.25
Oclaro (OCLR) – $4.25 to $4.50
Pinnacle Entertainment (PNK) – $11
Pilgrim’s (PPC) – $6 to $6.25

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The second radar is the short squeeze radar which is compiled of stocks showing relative strength, but having high short interest (you will notice duplicates among both radars because of this). Any bullish spark may set them off in a short squeeze run netting significant profits if you trade correctly. Always trade these short squeeze candidates carefully as stocks with high short interest will have negative rumors swirling around them trying to shakeout investors who have not done their homework. However, some of those rumors may indeed be true, hence the importance of doing homework and being very selective. The risk is higher for these types, so make sure you know what you are getting into before you buy, not after you buy.  The key is to be selective and find those stocks which the shorts are wrong about, not to blindly believe every high short position is wrong.

American Equity Investment Life (AEL)
ATP Oil & Gas (ATPG)
AsiaInfo-Linkage (ASIA)
Briggs & Stratton (BGG)
Bon-Ton Stores (BONT)
BPZ Resources (BPZ)
Callaway Golf (ELY)
Endeavour International (END)
Flotek Industries (FTK)
Goodrich Petro (GDP)
Harvest Natural Resources (HNR)
Keryx Biopharmaceuticals (KERX)
Miller Energy Resources (MILL)
Mitek Systems (MITK)
MGIC Investment (MTG)
Sonic Automotive (SAH)
Saks (SKS)

You can follow my trades alongside the 36,000 plus market players who follow me on SeekingAlpha (Shameless promotion). As always, do your own homework to see if you agree. Good luck out there.

Mike

At the time of publication, Kudrna was long NOG, BYD, and CLDX, but positions may change at any time.

This is either a sign that a pullback is in the works (and much needed) as small-caps drag down large-caps or this will pass soon and the large-caps resiliency will keep us afloat. I don’t predict, I trade what is in front of me. That said, I am very happy to see some weakness in small-caps and looking forward to better opportunities.

This weakness is resetting some of the charts and I would not mind further weakness to finish the process. The weakness creates opportunity for us and after many bullish months, this would actually be helpful to the bulls.  At that time we can see more stocks surging higher rather than a slow grind higher that doesn’t net as high of a return.

Again, per my comments a few weeks ago, I am going to have to keep my posts short for the near-term. I have recently purchased a restaurant and my time as a trader has now been reduced for the near future. I hope to be trading full-time again as I can get this restaurant into an easier-to-handle maintenance phase.

Economic Calendar

Everything this week is based on the all-mighty Non-Farm Payroll. This report has become so important that it could actually set the tone for the next month. The headline number is important for the markets and psychology of investors, but the real key to understanding these numbers is the labor participation rate. The labor participation rate keeps decreasing which in turn makes it easier to reduce the headline unemployment. Others have noted, and I have not confirmed this myself, that if the labor participation rate decreases just a few more percentages, it would mathematically make the unemployment percentage go negative. The point of this is to put in question how accurate this data really is in regards to our true employment situation. However, the markets care more about the headline and less about the specific details.

Game-Plan

Due to the weakness in small-caps recently, I have moved closer to cash and waiting to redeploy more. Instead of trying to call a bottom, I will wait for confirmation of upside to deploy capital in a safer environment.

Everywhere I look, people expect more upside it seems. This is different than previous weeks when the fear of downside kept us moving higher as everyone was prepared. That said, I will not be looking to call a bottom, I will simply stay patient and wait for clarity in small-caps.  As the days move on, I see more and more signs that weakness is growing.  Until that changes, I will be mostly in cash trading smaller positions.

If you can’t make it to the live-chat where all the magic begins, you can view my real-time trade updates throughout the day by following me on SeekingAlpha StockTalks.

Stock Radar

I am sticking to stocks showing  overall relative strength for my swing trades.  Preferably, these companies have more cash than debt and valuations showing reason to believe it is undervalued, but more homework is needed to sort through the list. If they have upcoming earnings, I may not trade until after the earnings.  My style does not allow me to hold swing trades into earnings unless I am only holding “profits” into them.

I look for these stocks to pullback towards favorable support levels (the price area designated next to the stock below) where I can start to buy incrementally if the conditions feel safe upon reaching the support area.  Again, the price target is just an area of interest, it is not a firm buy just for touching it.

I am cautious of buying on breakouts unless I am in a very aggressive mode.  This aggressive mode may be just for a day-trade rather than risking the large position overnight where my stop-loss may not protect me from a large gap-down.  Market players have been reluctant to buy stocks on breakouts over the past year and I have adjusted my strategy to be more selective and patient.  If we can gain some very positive sentiment or a QE-based environment, I’d expect that will change.  The first list is my normal weekly radar using my proprietary settings on my stock screener.   For all my radars, I tend to keep four weeks worth before deleting them allowing me to rotate through a greater number of recently bullish stocks.

AsiaInfo-Linkage (ASIA) – $12.50
ATP Oil & Gas (ATPG) – $8
BioCryst Pharma (BCRX) – $4.25 to $4.50
Star Scientific (CIGX) – $3.50 to $3.75
Majesco Entertainment (COOL) – $2.50
Carrizo Oil & Gas (CRZO) – $27.50
Cal Dive International (DVR) – $3
8×8 (EGHT) – $4.25
Endologix (ELGX) – $12.50 to $13
Endeavour International (END) – $10.50
Exterran Holdings (EXH) – $13.75 to $14
Goodrich Petro (GDP) – $16.75 to $17
Glu Mobile (GLUU) – $4
GMX Resources (GMXR) – $1.50
Imperial Sugar (IPSU) – $5.75
Key Energy Services (KEG) – $17
Kodiak Oil & Gas (KOG) – $9.50 to $9.75
Leap Wireless International (LEAP) – $10.50
Lucas Energy (LEI) – $2.50 to $2.75
McMoRan Exploration (MMR) – $14
Pharmacyclics (PCYC) – $25
Raptor Pharma (RPTP) – $6.75 to $7
Sangamo Biosciences (SGMO) – $4.75 to $5
STEC (STEC) – $9.50
TiVo (TIVO) – $11.25
Voyager Oil & Gas (VOG) – $3

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The second radar is the short squeeze radar which is compiled of stocks showing relative strength, but having high short interest (you will notice duplicates among both radars because of this). Any bullish spark may set them off in a short squeeze run netting significant profits if you trade correctly. Always trade these short squeeze candidates carefully as stocks with high short interest will have negative rumors swirling around them trying to shakeout investors who have not done their homework. However, some of those rumors may indeed be true, hence the importance of doing homework and being very selective. The risk is higher for these types, so make sure you know what you are getting into before you buy, not after you buy.  The key is to be selective and find those stocks which the shorts are wrong about, not to blindly believe every high short position is wrong.

Amkor Technology (AMKR)
Aeropostale (ARO)
AsiaInfo-Linkage (ASIA)
Briggs & Stratton (BGG)
Brown Shoe (BWS)
Boyd Gaming (BYD)
Corinthian Colleges (COCO)
Carrizo Oil & Gas (CRZO)
Cenveo (CVO)
Endeavour International (END)
Flotek Industries (FTK)
Glu Mobile (GLUU)
Harvest Natural Resources (HNR)
Kodiak Oil (KOG)
Northern Oil & Gas (NOG)
Stillwater Mining (SWC)
Take-Two Interactive Software (TTWO)
Uranium Energy (UEC)
Veeco Instruments (VECO)
Wabash National (WNC)
W&T Offshore (WTI)
ZAGG (ZAGG)
Zoltek (ZOLT)
You can follow my trades alongside the 36,000 plus market players who follow me on SeekingAlpha (Shameless promotion). As always, do your own homework to see if you agree. Good luck out there.

Mike

At the time of publication, Kudrna was long ATPG, but positions may change at any time.

The oil sector continues to be a hot theme as oil stocks are seeing significant momentum as oil prices run higher.  It could be just a matter of time that the negative impact on the consumer from high oil prices pushes the market lower.  Until then, even garbage oil plays are even exploding higher, but these plays are very hard to hold large positions overnight. The day oil starts to pullback or that we get market pullback, these risky stocks will be the first to get punished very hard.

As noted last week, I will be having shorter updates for the next few weeks as I am working on a few side projects outside the stock market.  These have been very time consuming as of late. It is this reason you will notice smaller and less detailed articles for the time being.

Economic Calendar

We have a fair amount of data this week with the big monthly jobs data the week after. This week manufacturing and consumers are the key data points.

Tuesday we have Durable goods orders to watch for.  This may set the early morning sentiment for the bulls or bears. Consumer confidence is after the market opens and that could provide some extra early morning movement.

Wednesday we have the second estimate for 4th quarter GDP and Bernanke also speaks in the morning.

Thursday is back manufacturing and the consumer with retailer chain store sales in the morning that I am personally going to be cautious for. After that, we have personal income and ISM data in the morning that could also create waves.

Game-Plan

I have been highly leveraged to oil stocks and last week was a great week to be in them. Looking for oil stocks that have not fully surged higher is the continued strategy.

Northern Oil and Gas (NOG) is one of those plays and is currently my favorite swing trade. I am looking for a surge higher as soon as Monday to put the squeeze on the significant amount of shorts.

Dejour Energy (DEJ) is one of my two speculative long-term trades that has seen recent strong volume in it. The volume has been so strong as of late that the odds of a new 52-week high soon are dramatically increasing. Gun to my head, we see a new 52-week high within the next two weeks. Keep in mind, that is a very bold prediction so don’t trade this risky speculative play based solely on that. Trade what is in front of you, not the prediction. Anything can happen to change that, especially if oil falls or the markets pullback.  That said, I’m very bullish on this position.

If you can’t make it to the live-chat where all the magic begins, you can view my real-time trade updates throughout the day by following me on SeekingAlpha StockTalks.

Stock Radar

I am sticking to stocks showing  overall relative strength for my swing trades.  Preferably, these companies have more cash than debt and valuations showing reason to believe it is undervalued, but more homework is needed to sort through the list. If they have upcoming earnings, I may not trade until after the earnings.  My style does not allow me to hold swing trades into earnings unless I am only holding “profits” into them.

I look for these stocks to pullback towards favorable support levels (the price area designated next to the stock below) where I can start to buy incrementally if the conditions feel safe upon reaching the support area.  Again, the price target is just an area of interest, it is not a firm buy just for touching it.

I am cautious of buying on breakouts unless I am in a very aggressive mode.  This aggressive mode may be just for a day-trade rather than risking the large position overnight where my stop-loss may not protect me from a large gap-down.  Market players have been reluctant to buy stocks on breakouts over the past year and I have adjusted my strategy to be more selective and patient.  If we can gain some very positive sentiment or a QE-based environment, I’d expect that will change.  The first list is my normal weekly radar using my proprietary settings on my stock screener.   For all my radars, I tend to keep four weeks worth before deleting them allowing me to rotate through a greater number of recently bullish stocks.

Advanced Energy Industries (AEIS) – $12
Affymax (AFFY) – $9.75 to $10.25
Alnylam Pharma (ALYN) – $13
Amkor Technology (AMKR) – $5.75 to $6
Accuray (ARAY) – $7
ATP Oil & Gas (ATPG) – $7
Abraxas Petro (AXAS) – $4 to $4.25
BPZ Resources (BPZ) – $3.25 to $3.50
Boyd Gaming (BYD) – $8 to $8.25 (risky as it has also created a good short setup)
Cerus (CERS) – $3.30 to $3.40
Celldex Therapeutics (CLDX) – $3.85 (Secondary offering at this price)
Cytori Therapeutics (CYTX) – $3 to $3.25
Delcath Systems (DCTH) – $4 to $4.15
Digital River (DRIV) – $18
Dynavax Technologies (DVAX) – $3.75 to $4
Exterran Holdings (EXH) – $13 to $13.50
Flotek Industries (FTK) – $11 to $11.25
Goodrich Petro (GDP) – $15 to $15.50
Glu Mobile (GLUU) – $3.75
Lucas Energy (LEI) – $2.75
OraSure Technologies (OSUR) – $10 to $10.50
PharmAthene (PIP) – $1.50
Raptor Pharma (RPTP) – $7 to $7.25
Sangamo Biosciences (SGMO) – $4.75 to $5
Smith Micro Software (SMSI) – $2.25
Willbros Group (WG) – $4.50
Zoltek (ZOLT) – $12.25 to $12.50

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The second radar is the short squeeze radar which is compiled of stocks showing relative strength, but having high short interest (you will notice duplicates among both radars because of this). Any bullish spark may set them off in a short squeeze run netting significant profits if you trade correctly. Always trade these short squeeze candidates carefully as stocks with high short interest will have negative rumors swirling around them trying to shakeout investors who have not done their homework. However, some of those rumors may indeed be true, hence the importance of doing homework and being very selective. The risk is higher for these types, so make sure you know what you are getting into before you buy, not after you buy.  The key is to be selective and find those stocks which the shorts are wrong about, not to blindly believe every high short position is wrong.

Amkor Technology (AMKR)
Aeropostale (ARO)
AsiaInfo-Linkage (ASIA)
Briggs & Stratton (BGG)
Brown Shoe (BWS)
Boyd Gaming (BYD)
Corinthian Colleges (COCO)
Carrizo Oil & Gas (CRZO)
Cenveo (CVO)
Endeavour International (END)
Flotek Industries (FTK)
Glu Mobile (GLUU)
Harvest Natural Resources (HNR)
Kodiak Oil (KOG)
Northern Oil & Gas (NOG)
Stillwater Mining (SWC)
Take-Two Interactive Software (TTWO)
Uranium Energy (UEC)
Veeco Instruments (VECO)
Wabash National (WNC)
W&T Offshore (WTI)
ZAGG (ZAGG)
Zoltek (ZOLT)

You can follow my trades alongside the 36,000 plus market players who follow me on SeekingAlpha (Shameless promotion). As always, do your own homework to see if you agree. Good luck out there.

Mike

At the time of publication, Kudrna was long END, NOG, and DEJ, but positions may change at any time.

After the first 90 minutes of action Tuesday morning, the enthusiasm was quickly sucked out of the market for the rest of the day. We gapped-up on the “Greece is saved” continuing theme only for volume to fall off a cliff and the action become very boring to watch/trade.

The bears had a prime opportunity to catch the bulls off-guard with the gap-up. They had an opportunity to try to punish them. All they were able to do was bring us back to even on the day. With that being said, the momentum is still to the upside, so we must be cautious of a pullback, but still stick with the trend that continues to work.

Oil stocks have been outperforming lately as oil prices continue to rise. Even the most speculative of oil stocks are catching on fire. These can be very profitable and enticing to the individual investor, but you must know how to trade them correctly to keep risk minimal. Holding large speculative positions overnight could turn very profitable with the right amount of luck. However, they can turn very bearish in the blink of an eye teaching you a hard lesson on how to manage portfolio risk. As long as oil stocks continue to work, I will stay highly leveraged to the sector while keeping a tight leash on any positions in case we finally receive the long-overdue pullback.  What goes up must come down, but that doesn’t mean it will come down just yet.

The momentum may still be to the upside, but you may want to think twice about recklessly buying just any stock that seems to be hot. The pullback will come when we least expect it and I believe that for many, it is no longer expected.

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—

Key Energy Services (KEG)

Yahoo Finance Profile:

Key Energy Services, Inc. operates as an onshore rig-based well servicing contractor in the United States and internationally. The company offers rig-based services, including the maintenance, workover, and recompletion of existing oil and gas wells; completion of newly-drilled wells; and plugging and abandonment of wells at the end of their lives, as well as specialty drilling services to oil and natural gas producers. It also provides fluid management services, such as vacuum truck services, fluid transportation services, and disposal services for operators, whose wells produce saltwater or other non-hydrocarbon fluids; and equipment trucks that are used to move large equipment from one well site to the next, as well as supplies frac tanks, which are used for temporary storage of fluids associated with fluid hauling operations. In addition, the company operates a fleet of hot oilers for pumping heated fluids that are used to clear soluble restrictions in a well bore; and offers coiled tubing services, such as logging and perforating conveyance, packer and plug milling, specialized drilling, frac placement, and pre-and post-frac well preparation, as well as early and late cycle high pressure live well intervention services. Further, it provides fishing services that involve recovering lost or stuck equipment in the wellbore utilizing an array of fishing tools; rental equipment comprising drill pipe, production tubulars, pressure-control equipment, power swivels, foam air units, and handling tools comprising Hydra-Walk pipe-handling units and services; specialty pumping services; oilfield service equipment controls, data acquisition, and digital information flow services; and drilling, project management, consulting, and reservoir engineering services. The company was formerly known as Key Energy Group, Inc. and changed its name to Key Energy Services, Inc. in December 1998. Key Energy Services, Inc. was founded in 1977 and is based in Houston, Texas.

Notes On Yahoo Finance Fundamentals:

KEG has a forward P/E of only 8, but has significant debt-to-cash of $773 million debt to only $35 million in cash.  However, they are currently turning a profit and are expected to increase the yearly EPS by 79% this year.  As of January 31, the short percentage of the float is just under 10% with a short ratio of over 3.  That is a fair amount of short activity.  Of the 16 analysts, the mean price target is $19.25, about an 18% increase from the current stock price with the most recent analyst price target upgrade on Tuesday to $19. I anticipate favorable odds of more price upgrades in the near future.

Annotated Chart and Trade Details:

GLU Mobile (GLUU)

Yahoo Finance Profile:

Glu Mobile Inc. engages in the design, marketing, and sale of casual and traditional mobile games worldwide. The company creates games and related applications based on its own original brands and intellectual property, as well as third-party licensed brands. Its original games based on its own intellectual property include Beat It!, Bonsai Blast, Brain Genius, Glyder, Gun Bros, Hero Project, Jump O’ Clock, Magic Life, Stranded, Super K.O. Boxing, Toyshop Adventures, and Zombie Isle. The company’s games based on licensed intellectual property include Build-a-lot, Call of Duty, Deer Hunter, Diner Dash, DJ Hero, Guitar Hero, Family Feud, Family Guy, Lord of the Rings, Paperboy, The Price Is Right, Transformers, Wedding Dash, Who Wants to Be a Millionaire?, and World Series of Poker. It develops and publishes games for the users of smart phones and tablet devices who purchase those games through direct-to-consumer digital storefronts, as well as for the users of feature phones served by wireless carriers and other distributors. The company was formerly known as Sorrent, Inc. and changed its name to Glu Mobile Inc. in May 2005. Glu Mobile Inc. was incorporated in 2001 and is headquartered in San Francisco, California.

Notes On Yahoo Finance Fundamentals:

GLUU has a forward P/E of 20 with strong cash of $32 million to zero debt.  They have consistently beat EPS expectations by 70-80% over the past four earnings reports, implying the possibility of future earnings will continue to be impressive when compared to analyst expectations.  As of January 31, the short percentage of the float is 16% with a short ratio of over 5, so they have plenty of shorts in this battle. Of the five analysts, the mean price target is $6.20, over a 50% increase from the current price.

Annotated Chart and Trade Details:

You can follow my real-time trades and market commentary alongside the 36,000 plus market players who follow me on SeekingAlpha (Shameless promotion). As always, do your own homework to see if you agree. Good luck out there.

Mike

At the time of publication, Kudrna had no positions in mentioned stocks but may initiate positions within 72 hours.  Positions may change at any time.

This is a contrarian signal for me. The media is talking about how bullish the markets are and all this bullish talk about the Dow going to 13,000. This doesn’t mean we are going to fall apart right away, but this is usually a sign that a top is near and we need some more weakness.

Combine that signal with the warning flare from Wednesday and we have more reason to believe that weakness is somewhere around the corner. I’d be more cautious of being aggressively long rather than trying to go short though. Calling a market turn is a low-odds strategy of trading. Those who do it have such high levels of cash that they can manage the trade better than an individual investor trying to mimic it.

I’m going to be watching the overall sentiment this week. Converting the last of the bears to bulls is a way of setting up for a pullback. When we have no more bears to convert, markets start to struggle to go higher.

 
Economic Calendar

This week is all about housing. The calendar itself is light on data, so I don’t expect any of this to be market moving. Every few months someone calls a bottom in housing and this will likely be no different. Rather than the data at home being the market mover, headlines from overseas will likely dominate the week more.

Game-Plan

This week I will be watching with a little more caution. I street lights have went from green to yellow.

I have spread out my trades over the past week, per my StockTalks, and peeled some risk off before the weekend since profits were to be had. Keeping modest-sized long positions overnight seems to be the best strategy for now with contrarian indicators going off.

I’m going for singles rather than home-runs. Charts are still overextended making aggressive buys riskier. I have no desire for the short-side right now, but if we do start to break down, I may try to take some quick short index trades and see how long the ride down takes. I expect to see a strong amount of dip-buyers anxious to buy on a pullback, so downside could be limited.

Also to note, I have a few side projects I am now working on outside of the trading world. The next few weeks will see me consumed a little bit more by them, so you’ll notice my activity may drop-off somewhat. This will not necessarily be a reflection of the market, this will be because I stay even more disciplined when I can not monitor my trades throughout the day.

If you can’t make it to the live-chat where all the magic begins, you can view my real-time trade updates throughout the day by following me on SeekingAlpha StockTalks.

Stock Radar

I am sticking to stocks showing  overall relative strength for my swing trades.  Preferably, these companies have more cash than debt and valuations showing reason to believe it is undervalued, but more homework is needed to sort through the list. If they have upcoming earnings, I may not trade until after the earnings.  My style does not allow me to hold swing trades into earnings unless I am only holding “profits” into them.

I look for these stocks to pullback towards favorable support levels (the price area designated next to the stock below) where I can start to buy incrementally if the conditions feel safe upon reaching the support area.  Again, the price target is just an area of interest, it is not a firm buy just for touching it.

I am cautious of buying on breakouts unless I am in a very aggressive mode.  This aggressive mode may be just for a day-trade rather than risking the large position overnight where my stop-loss may not protect me from a large gap-down.  Market players have been reluctant to buy stocks on breakouts over the past year and I have adjusted my strategy to be more selective and patient.  If we can gain some very positive sentiment or a QE-based environment, I’d expect that will change.  The first list is my normal weekly radar using my proprietary settings on my stock screener.   For all my radars, I tend to keep four weeks worth before deleting them allowing me to rotate through a greater number of recently bullish stocks.

Akorn (AKRX) – $11.75
Align Technology (ALGN) – $25
Alnylam Pharma (ALNY) – $11.50 to $12
Amkor Technology (AMKR) – $6 to $6.25
Accuray (ARAY) – $6.75 to $7
ATP Oil & Gas (ATPG) – Buy on Breakout Above $8
Abraxas Petro (AXAS) – $3.75
Basic Energy Services (BAS) – Buy on Breakout Above $20
Cadence Design Systems (CDNS) – $11.50 to $11.75
Dynavax Technologies (DVAX) – $4 to $4.20
Endeavour International (END) – $11 to $11.40
Entropic Communications (ENTR) – $7
Exact Sciences (EXAS) – $9 to $9.25
FuelCell Energy (FCEL) – $1.30
Glu Mobile (GLUU) – $3.50 to $3.75
Hercules Offshore (HERO) – $5 to $5.30
hhgregg (HGG) – $12.50 to $13
Infinera (INFN) – $8 to $8.25
Imperial Sugar (IPSU) – $5.50 to $6
Key Energy Services (KEG) – $15.50 to $16
Kodiak Oil (KOG) – $9.50 to $10
LivePerson (LPSN) – $14.50 to $15
Mitek Systems (MITK) – $10.50 to $11
Novavax (NVAX) – $1.25
Oclaro (OCLR) – $4.50 to $4.75
Orexigen Therapeutics (OREX) – $2.75 to $3
RAM Energy Resources (RAM) – $3.25 to $3.50
Royale Energy (ROYL) – $5 to $5.25
Raptor Pharma (RPTP) $7.50
Sangamo Biosciences (SGMO) – $4.75
Uranium Energy (UEC) $4 to $4.15
Uranium Resources (URRE) – $1
ValueClick (VCLK) – $19 to $19.50
Horsehead Holding (ZINC) – $11
Zoltek (ZOLT) – $12.50

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The second radar is the short squeeze radar which is compiled of stocks showing relative strength, but having high short interest (you will notice duplicates among both radars because of this). Any bullish spark may set them off in a short squeeze run netting significant profits if you trade correctly. Always trade these short squeeze candidates carefully as stocks with high short interest will have negative rumors swirling around them trying to shakeout investors who have not done their homework. However, some of those rumors may indeed be true, hence the importance of doing homework and being very selective. The risk is higher for these types, so make sure you know what you are getting into before you buy, not after you buy.  The key is to be selective and find those stocks which the shorts are wrong about, not to blindly believe every high short position is wrong.

Amkor Technology (AMKR)
Abraxas Petro (AXAS)
Briggs & Stratton (BGG)
Brown Shoe (BWS)
Corinthian Colleges (COCO)
Carrizo Oil & Gas (CRZO)
Callaway Golf (ELY)
Endeavour International (END)
Entropic Communications (ENTR)
Ethan Allen Interiors (ETH)
Pacer International (PACR)
Uranium Energy (UEC)
Valassis Communications (VCI)
Veeco Instruments (VECO)
Wabash National (WNC)
ZAGG (ZAGG)
Zoltek (ZOLT)

You can follow my trades alongside the 36,000 plus market players who follow me on SeekingAlpha (Shameless promotion). As always, do your own homework to see if you agree. Good luck out there.

Mike

At the time of publication, Kudrna was long END and KOG, but positions may change at any time.

As expected, The “Greece is saved” theme continued yet again.  Stocks bounced back on Monday as Greece finally approved austerity plans late Sunday. The next test for the plan is a vote on Wednesday from the European finance ministers.  They will vote to approve the bill. 

I’d be interested in the statistical data for how many times our markets have run-up from similar type news over the past year.  Wednesday’s vote from the European finance ministers to approve the bill creates another catalyst.  This means we could see yet another “Greece is saved” move up in the markets, so be prepared.

The concerning part for the bulls is that today was reported as the lowest volume day in a decade for a non-holiday.  It is hard to create favorable risk-reward trades in such a light volume environment.  As traders, we must learn to adapt to this new environment.  The goal is to actively keep risk minimal while still allowing for upside gains to be had.

Tuesday morning we have Retail Sales data coming out.  These numbers are likely to set the tone early for the day.  Strong data would give more confidence to the bulls that we are truly on the path of a strengthening economic recovery.  With the way the market has worked lately, weak data may be shrugged off in just half a trading day.

Either way, I’m looking for Tuesday to have some weakness at some point prior to the vote on Wednesday.  This may be a good time to start deploying some of the higher levels of cash I’ve been holding, noted in my StockTalk Trade Updates.  As always, I’ll wait to see the action and move quickly rather than make a prediction.

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Kodiak Oil (KOG)

Yahoo Finance Profile:

Kodiak Oil & Gas Corp. engages in the acquisition, exploration, exploitation, development, and production of natural gas and crude oil in the United States. The company’s oil and natural gas reserves and operations are primarily concentrated in the Williston Basin of North Dakota and Montana, and the Green River Basin of Wyoming and Colorado. As of December 31, 2010, it had estimated proved reserves of 10.0 million barrels of oil and 9.0 billion cubic feet of natural gas. The company was formerly known as Columbia Copper Company Ltd. and changed its name to Kodiak Oil & Gas Corp. in September 2001. Kodiak Oil & Gas Corp. was incorporated in 1972 and is headquartered in Denver, Colorado.

Notes On Yahoo Finance Fundamentals:

KOG has a low forward P/E of only 9.  Debt is listed at $55 million while cash is listed at about $79 million, showing no serious concerns in the short-term.  The five-year PEG ratio is listed at only .85 with estimates of about 600% EPS growth for the year, to be finalized at the upcoming earnings release on February 28th.  As of January 31, 19% of the float is short.  At current volumes, that is only a 3 day short ratio though.  Of the 17 analysts, the median price target is $11.26 with a high of $13.  We should see some increasing bullish optimism into earnings, to which my style of trading would have me exiting the trade before the release.

Annotated Chart and Trade Details:

Boyd Gaming (BYD)

Yahoo Finance Profile:

Boyd Gaming Corporation, together with its subsidiaries, operates as a multi-jurisdictional gaming company in the United States. As of December 31, 2009, the company owned and operated 15 casino entertainment facilities located in Nevada, Mississippi, Illinois, Louisiana, Indiana, and New Jersey. It owned approximately 812,500 square feet of casino space, containing approximately 21,400 slot machines, 425 table games, and 7,550 hotel rooms. The company also owns and operates a pari-mutuel jai-alai facility located in Dania Beach, Florida, as well as engages in travel agency business. In addition, Boyd Gaming Corporation holds a 50% interest in a limited liability company that operates Borgata Hotel Casino and Spa in Atlantic City, New Jersey. The company was founded in 1988 and is headquartered in Las Vegas, Nevada.

Notes On Yahoo Finance Fundamentals:

BYD is a bit more speculative and most of the current price is based on future expectations.  EPS expectations for next year are estimated to show growth of nearly 800%.  It will need it as currently they are listing about $187 million in cash and a whopping $3.39 billion in debt, mostly long-term though via the balance sheet.  The book-value-per-share is $13.91 which is above the current stock price.  Some bulls will use that to justify higher stock prices.  As of January 31, 21% of the float is short which is a 7 day short ratio at current volume levels.  This makes BYD a large short-squeeze candidate if the bulls can gain further ground forcing them to cover.  Time is against us on this trade if you do not hold into earnings, as they are expected to be released on February 21st.  The analysts have a substantial disagreement on the proper valuation with the median target of 14 analysts at $7.25, but a high price of $11.

Annotated Chart and Trade Details:

Celldex Therapeutics (CLDX)

Yahoo Finance Profile:

Celldex Therapeutics, Inc., a biopharmaceutical company, engages in the development, manufacture, and commercialization of novel therapeutics for human health care. The company offers Rotarix for the treatment of rotavirus infection. Its clinical development programs include CDX-110 (rindopepimut), which is in Phase IIb clinical trial for the treatment of glioblastoma multiforme; CDX-011 (glembatumumab vedotin) that is in Phase IIb clinical trial to treat metastatic breast cancer and melanoma; CDX-1307, a Phase II clinical trial product for treating muscle-invasive bladder cancer; and CDX-1401, which is in Phase I/II clinical trials for the treatment of multiple solid tumors. The company’s preclinical product candidates comprise CDX-301 for treating cancer, and autoimmune diseases and transplants; CDX-1127 for immuno-modulation and multiple tumors; CDX-014 to treat renal and ovarian cancer; and CDX-1135, a complement inhibitor that suppresses inflammatory reactions. It has research collaboration and licensing agreements with Medarex, Inc.; Alteris Therapeutics, Inc.; 3M Company; Amgen Inc.; Amgen Fremont; and Seattle Genetics, Inc., as well as partnership agreements with GlaxoSmithKline plc; Pfizer Inc.; Vaccine Technologies, Inc.; and TopoTarget A/S. Celldex Therapeutics, Inc. was founded in 1983 and is headquartered in Needham, Massachusetts.

Notes On Yahoo Finance Fundamentals:

CLDX is another speculative trade based on future expectations. Unlike BYD, CLDX has ample cash of $62 million with only $15 million in debt.  As of January 31, 12% of the float is short with a short ratio of about 7.  This provides fuel for upside momentum if the bulls can further press the shorts and keep them on the defense.  Phase II data is expected in Spring and unconfirmed earnings are expected to be released on March 5th, providing plenty of time for this trade to develop further.  Of the 7 analysts, the median price target is $6, with a high target of $14.  This is another stock with a wide range of valuations from analysts.

Annotated Chart and Trade Details:

You can follow my real-time trades and market commentary alongside the 36,000 plus market players who follow me on SeekingAlpha (Shameless promotion). As always, do your own homework to see if you agree. Good luck out there.

Mike

At the time of publication, Kudrna was long BYD and may initiate positions within the other mentioned stocks within 72 hours.  Positions may change at any time.

As I’ve repeated multiple times lately, I’d like to see some more weakness.  That way we can find safer entries in our trades. This action is still feeling very dominated by computers making it even more riskier to chase. We must fear the day we are aggressively long only to get caught as the computers turn to sell.  This is the new environment that traders must adapt to which was never the case just a few years ago.

Europe has also mattered once again this past week. As I am typing this section, Greece and the Eurozone have not firmly agreed to more bailout money yet as they inch closer to default. However, this does create another opportunity for a “Greece is saved” rally that we have grown so accustomed to. Odds are that the situation will be agreed upon just in-time and then odds are we will have a “Greece is saved” short-term rally. For the younger traders reading this, as many of you gain more experience in the markets, you will notice that logic is not the driving force behind markets moving up or down.

Stay on-guard this week and keep sifting through stocks for the right risk-reward opportunities. I believe we have more upside to go, but I’m skeptical it will be without much worry. A pullback is still ideal.

Economic Calendar

Unlike last week, this week is loaded up with economic data and many of these events has the ability to move the markets.

Retail sales on Tuesday morning will be the first piece of data to focus on. With so much optimism that the economy is improving, we will start needing more economic indicators to confirm these beliefs. Consumers buying more would be a very important indicator to confirming this belief. I’m skeptical myself, but do believe we are at least modestly better off than the previous year, which I attribute mostly to better consumer sentiment that the world hasn’t ended like some had feared.

The Manufacturing surveys and Industrial Production data will be another area to focus on. This data will gives us a better feel for what we can expect the manufacturing output to be for February. Many are expecting manufacturing to really turn the corner this year and continue to strengthen at an increasing rate. A curve-ball in this though is if Europe worsens and exports there decrease.

We also need to keep an eye on inflation indicators. They will likely create much discussion from the talking heads on television as they try to figure out what the Fed may or may not do next. I only pay attention just enough to see what the Fed is using and what others are perceiving, but I take the number with a grain of salt as it doesn’t do much to account for inflation from higher gas and food prices.  That is true inflation to the consumer.

Game-Plan

The game-plan has changed little from last week. I am underinvested and in mostly an aggressive day-trade mode. The market is making it more complicated to chase stocks that have already risen significantly. In the meantime, it has been rewarding very speculative stocks that are hard to hold overnight due to fundamental/news-driven concerns. It’s still a healthy sign that speculative stocks are receiving attention, so I’m optimistic for the short-term future.

That being said, I am ensuring I don’t lose the gains made over the past few months therefore I am being very cautious. Outside of my long-term positions in Dejour Energy (DEJ) and Gastar Exploration (GST), which almost never make up more than 25% of my portfolio, I am mostly cash with few swing trades. Friday’s weakness helped, but we truly need more weakness to reset some charts and shake out some of the bulls. This would make it easier to hold larger positions overnight allowing us to take more advantage of the optimistic market. Until then, I am stuck sorting through charts for favorable opportunities and keeping trades on a tight leash. Preventing unnecessary losses is many times more important than making gains. We must find the right favorable trade, not force the best trade from a list of bad trade setups.

My main swing trades have all been reduced, but will look to increase if the volume and price action warrant it. These positions are down to only Harry Winston Diamond (HWD) and Endeavour International (END), noted on my real-time trade updates. I’ve had to close out positions this week to protect profits and protect from losses. With the increased capital, I can now look to re-position the portfolio with some new ideas. Pending the action this week, I will look to initiate at least two more swing trades and if we gap-up Monday morning, I will be more inclined to reduce positions further rather than buy into it. Monday morning gap-ups are rarely wise to buy into. Waiting for it to settle down is almost always the best strategy.

If you can’t make it to the live-chat where all the magic begins, you can view my real-time trade updates throughout the day by following me on SeekingAlpha StockTalks.

Stock Radar

This week I’ve modified the main stock radar slightly.  I have added in “price areas of interest” that I’d “consider” buying at. Moving to the price area is only one factor in determining the risk-reward of the trade, but it is a very key point of it, so I will try to include those target prices from now on.

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I am sticking to stocks showing  overall relative strength.  Preferably, these companies have more cash than debt and valuations showing reason to believe it is undervalued, but more homework is needed to sort through the list. I look for these stocks to pullback towards favorable support levels (the price area designated next to the stock below) where I can start to buy incrementally if the conditions feel safe upon reaching the support area.

I am cautious of buying on breakouts unless I am in a very aggressive mode.  This aggressive mode may be just for a day-trade rather than risking the large position overnight where my stop-loss may not protect me from a large gap-down.  Market players have been reluctant to buy stocks on breakouts over the past year and I have adjusted my strategy to be more selective and patient.  If we can gain some very positive sentiment or a QE-based environment, I’d expect that will change.  The first list is my normal weekly radar using my proprietary settings on my stock screener.   For all my radars, I tend to keep four weeks worth before deleting them allowing me to rotate through a greater number of recently bullish stocks.

Abiomed (ABMD) – $21
Akorn (AKRX) – $12
Amkor Technology (AMKR) – $6
Amylin Pharma (AMLN) – $16.50
Accuray (ARAY) – $6.50
Ariad Pharma (ARIA) – $14
Actuant (ATU) – $26
American Axle & Manufacturing (AXL) – $11.75 to $12
Brunswick (BC) – $22
Briggs & Stratton (BGG) – $16
BPZ Resources (BPZ) – $3.25
Brown Shoe (BWS) – $9.25 to $10
Boyd Gaming (BYD) – $9
Cadence Design Systems (CDNS) – $11.50
Chelsea Therapeutics (CHTP) – $4.75
CIENA (CIEN) – $15
Star Scientific (CIGX) – $3
Celldex Therapeutics (CLDX) – $5
DepoMed (DEPO) – $6 to $6.50
Delek US Holdings (DK) – $13.50
Dynavax Technologies (DVAX) – $3.75
Ebix (EBIX) – $24
Emulex (ELX) – $10.25
Endeavour International (END) – $11 to 11.50
Entropic Communications (ENTR) – $6.50
FuelCell Energy (FCEL) – $1.10
Hercules Offshore (HERO) – $4.50 to $4.75
Kodiak Oil & Gas (KOG) – $8.75
Mitek Systems (MITK) – $9.75 to $10
Orexigen Therapeutics (OREX) $2.75
Raptor Pharma (RPTP) – $7.50 to $7.75
Triangle Petro (TPLM) – $6.50 to $7
Transcept Pharma (TSPT) – $8
ValueClick (VCLK) – $19 to $19.50
VirnetX Holding (VHC) – $24 to $24.50
Wabash National (WNC) – $9.75 to $10
Zoltek (ZOLT) – $12 to $12.50

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The second radar is the short squeeze radar which is compiled of stocks showing relative strength, but having high short interest (you will notice duplicates among both radars because of this). Any bullish spark may set them off in a short squeeze run netting significant profits if you trade correctly. Always trade these short squeeze candidates carefully as stocks with high short interest will have negative rumors swirling around them trying to shakeout investors who have not done their homework. However, some of those rumors may indeed be true, hence the importance of doing homework and being very selective. The risk is higher for these types, so make sure you know what you are getting into before you buy, not after you buy.  The key is to be selective and find those stocks which the shorts are wrong about, not to blindly believe every high short position is wrong.

Amkor Technology (AMKR)
American Axle & Manufacturing (AXL)
Boyd Gaming (BYD)
Briggs & Stratton (BGG)
Brown Shoe (BWS)
CIENA (CIEN)
Corinthian Colleges (COCO)
Ebix (EBIX)
Endeavour International (END)
Entropic Communications (ENTR)
Flotek Industries (FTK)
KIT digital (KITD)
Northern Oil and Gas (NOG)
Collective Brands (PSS)
Regis (RGS)
Sonic Automotive (SAH)
Saks (SKS)
Spectrum Pharma (SPPI)
Terex (TEX)
Take-Two Interactive Software (TTWO)
Wabash National (WNC)
Zoltek (ZOLT)

You can follow my trades alongside the 36,000 plus market players who follow me on SeekingAlpha (Shameless promotion). As always, do your own homework to see if you agree. Good luck out there.

Mike

At the time of publication, Kudrna was long DEJ, GST, END and HWD, but positions may change at any time.

We had a gap-down to start the week off and as usual in this new environment, the bulls came to the rescue.  With the Greek deal far from agreed upon, many thought today was the day we’d finally receive some weakness which would hopefully reset the many overbought charts.  Instead, the trend for the past few months continued yet again.  A gap-down finds enough dip buyers that it can not break to new lows, so we drift north for the rest of the day towards even.  This action is not helpful for traders as we must be extra selective with our capital keeping trades either smaller or fast and aggressive as we trim into the close rather than hold overnight.

Today was not a day we could do much of this though as while the dip buyers did show up, the action was very so slow and weak after the initial hour of enthusiasm.  Speculative small-caps have been receiving the most bullish attention, so I’m annotating charts of those types this week.  I like that these stocks are receiving attention, but would feel better if we could receive a pullback to rest some of the less speculative stocks.  This would allow traders to focus their capital on less risky trades for safer gains.

These days seem to be the new representation of a pullback, which entails mostly weak volume consolidation.  That being said, don’t be shocked if we have another day of this only to surge in the coming days.  While I’m not predicting this as we are overbought to begin with, it’s hard to fight the trend regardless how illogical it seems.  For now, I’ll continue to keep positions reduced and tight.  Any aggressive trades are likely to be peeled off before the close to keep risk minimal.

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1-800 Flowers.com (FLWS)

Yahoo Finance Profile:

1-800-Flowers.com, Inc. together with its subsidiaries, operates as a florist and gift retailer in the United States. The company offers a range of products, including fresh-cut flowers, floral arrangements and plants, gifts, popcorn, gourmet foods and gift baskets, cookies, chocolates, candy, and wine through its telephonic and online sales channels, company-owned and operated retail floral stores, and franchised stores. It provides gourmet gifts, such as popcorn and specialty treats through thepopcornfactory.com; cookies and baked gifts through cheryls.com; chocolates and confections through fanniemay.com and harrylondon.com; gift baskets and towers through 1800baskets.com; Celebrations brand party ideas and planning tips through celebrations.com; and customizable invitations, announcements, and greeting cards through finestationery.com. As of July 3, 2011, the company operated 2 floral retail stores, 1 fulfillment center, and approximately 100 franchised stores located within the United States. It has strategic online relationships with Facebook, Google, AOL, Yahoo!, and Microsoft. The company was founded in 1976 and is headquartered in Carle Place, New York.

Notes On Yahoo Finance Fundamentals:
FLWS has a fair forward P/E of just under 14.  As of January 13, FLWS has a short ratio of 5, a negligible amount.  Cash is slightly under debt at $30 million to $37 million and the Book-Value-Per-Share is just under the current stock price at $2.45.  The price target from one analyst is nearly double the current stock price at $5 and the growth estimates for this year are a strong 55%.  These are not overly impressive fundamentals, but the Valentines day buzz for the next few weeks should draw more attention to FLWS.

Annotated Chart and Trade Details:

Warren Resources (WRES)

Yahoo Finance Profile:

Warren Resources, Inc., an independent energy company, engages in the exploration, development, and production of onshore crude oil and gas reserves in the United States. It primarily explores for oil reserves in the Wilmington field in California; and natural gas in the Washakie Basin in Wyoming. The company was founded in 1990 and is headquartered in New York, New York.

Notes On Yahoo Finance Fundamentals:
WRES is a small-cap with a low forward P/E of only 9.  As of January 13, WRES has only a 6 day short ratio, a negligible amount of shorts.  One growing concern is the large amount of debt compared to cash.  WRES has about $5 million in cash to $71 million in debt.  This could create future financing/capital issues.  The median price target for five analysts is $4.45 with a recent upgrade to buy in December 2011.   This is not usually a stock I would rush to buy, but speculative small-caps continue to perform very well in this market, so WRES is likely to perform well in the short-term.

Annotated Chart and Trade Details:

Entegris (ENTG)

Yahoo Finance Profile:

Entegris, Inc. develops, manufactures, and supplies products and materials used in processing and manufacturing in the semiconductor and other high-technology industries worldwide. It operates in three segments: Contamination Control Solutions, Microenvironments, and Specialty Materials. The Contamination Control Solutions segment offers liquid filtration products, components and systems, and gas filtration products that purify, monitor, and deliver critical liquids and gases to the semiconductor manufacturing process. The Microenvironments segment provides wafer and reticle handling products, wafer shipping products, and data storage products, which preserve the integrity of wafers, reticles, and electronic components at various stages of transport, processing, and storage. The Specialty Materials segment offers poco graphite products and specialty coating products that provide low-temperature and plasma-enhanced chemical vapor deposition coatings of critical components of semiconductor manufacturing equipment used in various stages of the manufacturing process. The company sells its products primarily through direct sales force, and strategic and independent distributors to integrated circuit device manufacturers, original equipment manufacturers (OEM), gas and chemical manufacturing companies, and high-precision electronics manufacturers; and electrical discharge machining customers, glass container manufacturers, aerospace manufacturers, and biomedical implantation device manufacturers, as well as flat panel display OEMs, materials suppliers, and end users. Entegris, Inc. was founded in 1966 and is based in Billerica, Massachusetts.

Notes On Yahoo Finance Fundamentals:
ENTG recently reported positive earnings and has a low P/E of under 11.  As of January 13, ENTG has only a short ratio of 5, a negligible amount of shorts.  A very large benefit ENTG has is the very strong amount of cash, especially in comparison to debt.  ENTG has about $273 million in cash with no debt.  This large surplus of cash gives many bullish ways they can put it to use further propelling the stock price higher.  The median price target for the eight analysts is $11 with a high of $12.

Annotated Chart and Trade Details:

You can follow my real-time trades and market commentary alongside the 36,000 plus market players who follow me on SeekingAlpha (Shameless promotion). As always, do your own homework to see if you agree. Good luck out there.

Mike

At the time of publication, Kudrna had no positions in mentioned stocks, but may initiate positions within 72 hours.

This is not to say I am bearish.  I am simply preaching awareness of our surroundings in order to be prepared for the day the bulls do not show up.  The past 60 days have been some of the best trading days in recent memory, so we should all have significant profits to protect right now.

Since it has been very long that we have seen any serious weakness, we could see a deeper pullback in one day than we would usually see in a market that has more market player emotions involved.  This action still feels dominated by computers (HFT) making it more complex to predict the next movement if it is not to the upside lately.  Greece discussions have been creating buzz once again, but the markets are acting completely independent of them so far.  That could change, but the recent trend is ignoring the situation for now.  As I’m typing this, we have heard everything that a Greek debt deal has been hours away to impossible to achieve and a default is about to happen.  We’ll have to wait and see what truly happens rather than continue to speculate based on rumors from all directions.  As of tonight, the futures are down, but that hasn’t meant anything until 30 minutes before the markets open as it changes so often in the blink of an eye.

Friday was the important jobs data and the headline number was very bullish.  However, a debate quickly ensued as over the months/years, the labor participation rate has declined which makes the unemployment rate easier to lower.  This makes the data untrustworthy at best to skeptics.  It’s not to say that the report was bad, it was actually quite good and considered the best jobs report under President Obama.  Opponents point out that the sad reality is it took trillions of dollars just to receive a good employment report when comparing it to other recent reports.  In the overall picture based on historic economic recoveries, this was mediocre at best.  So while we should be happy a new trend seems to be developing, we are already near last place in the race, so we have some catching up to do before we can get excited.  I’ll try to write more about the jobs report later this week.

Economic Calendar

This is a very boring week for economic data unlike last week.  Due to this, European headlines may impact our markets slightly more.

Game-Plan

I have been in an aggressive day-trade mode lately.  This is due to being cautious of weakness or a pullback that we never seem to receive.  It is too hard to trust we can simply rise straight up from here, but that is exactly what is happening right now.

A pullback would allow a stronger support level to be created and additional buyers to get in at favorable risk-reward prices.  Until we receive that pullback, I may keep light inventory in my portfolio, but willing to aggressively day-trade positions that are seeing bullish momentum, so be sure to follow my StockTalks for real-time updates.

This strategy allows me to have less overnight risk, but still a little inventory to take advantage of any gap-ups while allowing plenty of capital to do damage control on any gap-downs.  When I see a bullish trade develop during the day, I can force my chips over to that position very fast and aggressively, keeping my risk minimal when I combine it with a stop loss.  The trick is you must not force a bad trade just because you need to do something.  When everyone around you is proclaiming they are making money, it can get your emotions running high making you feel obligated to put money to work and that is when bad trades may take place.  Be mindful of that.  Lately, I have had good success running aggressive day-trades with short-squeeze candidates such as Oncothyreon (ONTY) and Boyd Gaming (BYD).  I will likely continue to focus on select ones when I notice strong volume moving in forcing the shorts to cover giving solid upside gains.

Per my StockTalks, I recently added Northern Oil and Gas (NOG) back to my portfolio.  NOG has pulled back towards it’s long-term trend-line which I detailed many times before as a favorable entry area.  If I see bullish volume move in once again, I will look to aggressively trade this position next.  Harry Winston Diamond (HWD) has seem some very large block purchases in it lately, so I’ve slowly increased my position expecting something to play out to the upside over the coming weeks.

If you can’t make it to the live-chat where all the magic begins, you can view my real-time trade updates throughout the day by following me on SeekingAlpha StockTalks.

Stock Radar

The screener this week picked up on a significant amount of big runners making it a tedious effort to slim down the radar with the best of the group.  Semiconductors had a great week and the screener was easily dominated in quantity from this sector over any other.  I had to be a bit more selective for this sector and will urge caution as many have run so high that entries are hard to justify unless we know we are going to keep running higher, something hard to predict, but is consistent with the current trend.

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I am sticking to stocks showing relative strength.  Preferably, these companies have more cash than debt and valuations showing reason to believe it is undervalued. I look for these stocks to pullback towards support levels where I start to buy incrementally. I am cautious of buying on breakouts unless I am in a very aggressive mode.  This aggressive mode may be just for a day-trade rather than risking the large position overnight where my stop-loss may not protect me from a large gap-down.  Market players have been reluctant to buy stocks on breakouts over the past year and I have adjusted my strategy to be more selective and patient.  If we can gain some very positive sentiment or a QE-based environment, I’d expect that will change.  The first list is my normal weekly radar using my proprietary settings on my stock screener.   For all my radars, I tend to keep four weeks worth before deleting them allowing me to rotate through a greater number of recently bullish stocks.

Avalon Rare Metals (AVL)
Augusta Resource (AZC)
Brigus Gold (BRD)
Cambrex (CBM)
Cadence Design Systems (CDNS)
China Gengsheng Minerals (CHGS)
Ceragon Networks (CRNT)
Cenveo (CVO)
Denbury Resources (DNR)
Electronics for Imaging (EFII)
Endeavour International (END)
Entegris (ENTG)
Energy Partners (EPL)
1-800-Flowers.com (FLWS)
Integrated Device Technology (IDTI)
Magic Software Enterprises (MGIC)
Nevsun Resources (NSU)
RadNet (RDNT)
Silicon Image (SIMG)
Stillwater Mining (SWC)
Terex (TEX)
TransGlobe Energy (TGA)
Taseko Mines (TGB)
Voyager Oil & Gas (VOG)
Warren Resources (WRES)
Willbros Group (WG)

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The second radar is the short squeeze radar which is compiled of stocks showing relative strength, but having high short interest (you will notice duplicates among both radars because of this). Any bullish spark may set them off in a short squeeze run netting significant profits if you trade correctly. Always trade these short squeeze candidates carefully as stocks with high short interest will have negative rumors swirling around them trying to shakeout investors who have not done their homework. However, some of those rumors may indeed be true, hence the importance of doing homework and being very selective. The risk is higher for these types, so make sure you know what you are getting into before you buy, not after you buy.  The key is to be selective and find those stocks which the shorts are wrong about, not to blindly believe every high short position is wrong.

Aegion (AEGN)
Amkor Technology (AMKR)
AsiaInfo-Linkage (ASIA)
American Axle & Manufacturing (AXL)
Biolase Technology (BLTI)
Bon-Ton Stores (BONT)
Brown Shoe (BWS)
Boyd Gaming (BYD)
Cenveo (CVO)
Ebix (EBIX)
Endeavour International (END)
Entropic Communications (ENTR)
GenCorp (GY)
InnerWorkings (INWK)
Iridium Communications (IRDM)
Local.com (LOCM)
Medifast (MED)
Pacer International (PACR)
Photronics (PLAB)
Ruth’s Hospitality (RUTH)
Sonic Automotive (SAH)
Saks (SKS)
Uranium Energy (UEC)
W&T Offshore (WTI)

You can follow my trades alongside the 36,000 plus market players who follow me on SeekingAlpha(Shameless promotion). As always, do your own homework to see if you agree. Good luck out there.

Mike

At the time of publication, Kudrna was long BYD, ONTY, NOG and HWD, but positions may change at any time.

We finally saw signs of consolidation this morning, but it was short-lived creating continued frustration for the bears.  The trend over the past few months has been that gap-ups tend to drift down towards the rest of the day and gap-downs tend to drift up the rest of the day.  Today continued that trend as we drifted back towards even on the day.

I expect this type of action may continue for the week as market players re-position their portfolios after the FOMC decision/data last week.  Bonds rose significantly and as I noted Sunday night, we are seeing a time that a large disconnect between bonds and equities can grow.  The day these two correlate once again may be a very devastating day as the disconnect grows larger.  You can expect it to be more of a whipsaw than a slow drift back towards being correlated, creating a great deal of pain for those not prepared.  This will mean we need to stay disciplined and not overextend ourselves without ample cash reserves and proper exit strategies/stop losses.  I don’t expect to see this type of whipsaw for many weeks though, maybe even a few months away still.

Look for this type of consolidation action to continue for the week with more clarity after jobs data is released on Friday.  This will be a very important jobs report that will determine if jobs are truly starting a new growing trend or if last month’s data was a one-off report that we can’t get behind.  The other curve-ball to look out for is Europe/Greece.  Many months ago, we were hopeful we’d stop focusing on every European headline in the markets and we finally received that disconnect in December.  With Greek default chatter still continuing and concerning some, the point to remember is we are more prepared for this outcome than before.  While negative news could provide some weakness, we should have plenty of support from dip-buyers anxious to join in.  It is the unexpected news which we do not see coming that is most devastating.  A Greek default is seemingly not that type of negative news.

I’m still focusing on charts that are showing overall strength with established trend-line support levels for favorable risk-reward buys. In a truly healthy market, I am more than willing to buy on breakouts expecting momentum traders to follow. In this market, I am finding that many breakouts are fizzling fast due to overall fearful sentiment and fast profit-takers. With that being said, I am more inclined to make moves near trend line support rather than breakouts.

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Iridium Communications (IRDM)

Yahoo Finance Profile:

Iridium Communications Inc. provides mobile voice and data communications services through satellites to businesses, the U.S. and foreign governments, non-governmental organizations, and consumers worldwide. It offers post-paid mobile voice and data satellite communications services; prepaid mobile voice satellite communications services; high-speed data services; machine-to-machine services for sending and receiving data from one location to other; and ancillary services, including inbound connections from the public switched telephone networks, SMS, SIM, activation, customer reactivation, and other peripheral services to commercial customers. The company also offers traditional voice, netted voice, data, messaging, and paging services, as well as maintenance services for the DoD’s dedicated gateway; and offers voice and data solutions, including personnel tracking devices; over-the-horizon aircraft communications applications; submarine communications applications; specialized communications solutions for high-value individuals; asset tracking devices for equipment, vehicles, and aircraft; and secure mobile communications and data devices for the military and intelligence community, such as secure satellite handsets to U.S. government customers. In addition, it manufactures and sells satellite handsets, voice and data modems, high-speed data devices, and machine-to-machine data devices. Further, the company offers accessories for its devices, including holsters, earbuds, portable auxiliary antennas, antenna adaptors, USB data cables, and charging units. Additionally, it provides engineering and support services to commercial and government customers. The company sells products and services to commercial end-users through service providers, value-added resellers, and value-added manufacturers. As of March 31, 2011, it had approximately 447,000 billable subscribers. The company was founded in 2000 and is headquartered in McLean, Virginia.

Notes On Yahoo Finance Fundamentals:

IRDM has a modest forward P/E of only 12 with an PEG Ratio of only .81. As of January 13, IRDM has a significant short ratio of over 25 which is about 19% of the float short.  This means IRDM is a strong candidate for a short squeeze on further price appreciation.  With $125 million in cash and $325 million in debt, it is a concern for some.  However, looking at the balance sheet, most of the debt is considered long-term rather than short-term liabilities.  It should also be noted that the Book-Value-Per-Share is $9.45, well above the current stock price.  Lastly, the median price target for three analysts is $12 meaning we have plenty of room to rise to meet these analysts targets.

Annotated Chart and Trade Details:

DUSA Pharma (DUSA)

Yahoo Finance Profile:

DUSA Pharmaceuticals, Inc., a vertically integrated dermatology company, develops and markets Levulan photodynamic therapy (PDT) and other products for common skin conditions primarily in the United States, Canada, and Korea. Its products include Levulan Kerastick 20% Topical Solution with PDT and the BLU-U brand light source for the treatment of non-hyperkeratotic actinic keratoses of the face or scalp. The company also markets the BLU-U without Levulan for the treatment of moderate inflammatory acne vulgaris and general dermatological conditions; and non-PDT drug products, such as ClindaReach and AVAR products. DUSA Pharmaceuticals, Inc. was founded in 1991 and is based in Wilmington, Massachusetts.

Notes On Yahoo Finance Fundamentals:

DUSA has a forward P/E of only 12 with ample cash-to-debt of $24 million in cash to no debt. As of January 13, DUSA has a short ratio of over 10 which is over 4% of the float short.  A 10-day cover is significant, but as volume increases, that will reduce very fast.  One analyst has a price target of $6.50, which is 43% higher from the current stock price.

Annotated Chart and Trade Details:

The Medicines Company (MDCO)

Yahoo Finance Profile:

The Medicines Company, a global pharmaceutical company, provides various medicines to hospitals for advancing the treatment of critical care patients primarily in the United States and Europe. It markets Angiomax, an intravenous direct thrombin inhibitor for use as an anticoagulant in combination with aspirin in patients with unstable angina undergoing percutaneous transluminal coronary angioplasty, and for use in patients undergoing percutaneous coronary intervention; and Cleviprex, an intravenous small molecule calcium channel blocker for the reduction of blood pressure. The company’s developing products comprise Cangrelor, which is in Phase 3 clinical trial acts as an intravenous small molecule antiplatelet agent to prevent platelet activation and aggregation; Oritavancin that is in Phase 3 clinical trial for the treatment of serious gram-positive bacterial infections, including acute bacterial skin and skin structure infections; and MDCO-2010, a small molecule serine inhibitor, is in Phase 2 clinical trial for the reduction of blood loss during surgery. It also provides MDCO-216 that is in Phase 1 clinical trial for the reversal of atherosclerotic plaque development and reduction of the risk of coronary events in patients with ACS; and Argatroban, which is a NDA filed direct thrombin inhibitor used as anticoagulant for prophylaxis or for the treatment of thrombosis. The company sells its products through its sales representatives. The Medicines Company was founded in 1996 and is based in Parsippany, New Jersey.

Notes On Yahoo Finance Fundamentals:

MDCO has a forward P/E of 17, which is higher than its current P/E of under 7. As of January 13, MDCO has minimal shorts with only a ratio of 4.6.  One large benefit for MDCO is the significant cash of $307 million to no debt, providing much flexibility for the organization.  Lastly, the median price target for six analysts is $22.25 with a high target of $27.

Annotated Chart and Trade Details:

You can follow my trades alongside the 36,000 plus market players who follow me on SeekingAlpha (Shameless promotion). As always, do your own homework to see if you agree. Good luck out there.

Mike

At the time of publication, Kudrna had no positions in mentioned stocks, but may initiate positions within 72 hours.