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All,
This will be my first weekly pick in over two weeks since my hard disk
crashed and I lost all my data. I think I've recovered my email addresses,
but if you are on the chart list and don't get a chart yell. Also, If you
don't want the charts and do get one, yell.
I've rebuilt my MetaStock files, but haven't gotten my Graphic
Workshop program working yet. That's the one I use to make GIF files, so I
won't be able to send a GIF today. Instead I'm trying the MetaStock SEND
feature which produces a bitmap file. For those on the email chart list,
yell if you have problems with it.
I've finished my weekly tests and I'm concerned but not too worried
after this weeks market action. Looking at my indices, the Dow Jones
Industrials broke through the bottom of its Intermediate Term Up Trend
Channel (ITUTC) on 8/7, the OEX and SPX did the same on 8/8, and the New
York Stock Exchange Index broke through the bottom of its ITUTC. The NASD
and Russell's index are close to the bottom of their channel. I think this
means we will get the long anticipated rotation out of the large cap stocks
to the small cap stocks, so I'll stick to small caps on my new selections.
The other possibility is that we will get an overall correction or even a
bear market. I don't think this is likely, but have moved all my stops up
just in case <G>.
My Janus World Wide mutual fund did close below its stop and I will
close out that position Monday. I'll be looking at overseas and worldwide
funds for a replacement, but I'm in no hurry. I'll list the Friday close
price and my stop price for the stocks and LEAP options in my portfolio
below:
SYMBOL FRIDAY STOP
CLOSE
STOCKS
APM 33 3/4 32 3/4
COMS 54 3/16 53 3/4
CUBE 23 9/16 22 3/4
IOM 22 1/2 20 3/4
LTXX 7.687 6 3/4
NPD 10 8 3/4
RVR 7 1/4 6 1/4
SCH 42.93 42 3/4
LEAPS
GTE 46.375 44 3/4
PDG 17.625 16 3/4
TRV 65 7/8 63 3/4
Now to this weeks pick. I'm going to go with Champion Enterprises Inc
(CHB). CHB is a holding company whose subsidiaries produce and sell
manufactured homes and mid sized buses.
CHB at 17 is in a Short Term Up Trend Channel (STUTC) with the top at
18 and the bottom at 15 1/2. It set a high of 26 1/8 in June 96 and then
fell to 13 3/4 on 6/6/97 which was near the bottom of a Long term Up Trend
Channel (LTUTC) before bouncing back up to its current price. The bottom
of the LTUTC is now at 13.78. CHB broke out of the Intermediate Term Down
trend Channel on Wednesday. I got a MetaStock RSquared, S/C, CCI buy
signal on 7/31/97. The RSquared is above 0.15 and rising, the S/C and CCI
indicators are both positive and rising. The fundamentals look good with
the PSR at 0.39, the PE at 12.31, the ROE over 30%, no debt, and 13%
insider ownership. I don't like the almost 85% institutional ownership,
but can live with it <G>. I also don't like the slower earnings growth the
last two quarters, but revenues are growing good. I'm going to watch the
market Monday. I expect the market to be down in the morning, but if it
turns later in the day, I'll open a position in CHB. I'll set my initial
target under the 96 high at 25 and my stop at 13 3/4 under the LTUTC.
I'm sending CHB.BMP charts to everyone on the email list. If you'rew
not on it and want on, just yell.
Jim
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