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All,
We had a great Christmas vacation, but it's always good to be
back home. I was stopped out of my ASND LEAP calls and CPU stock
while I was gone so I'm about 1/3 cash now. I'm going to ease back in
during the next few weeks. After looking at my stock and LEAP watch
lists, I've decided on Borland International (BORL) LEAPS and Iomega
(IOM) stock. BORL develops, markets, and supports software
development tools, intelligent middleware, and database and
application management systems for business enterprises and software
developers. IOM gave me a great profit when I rode its ITUTC from the
bottom to the top from April to November of last year and here it is
at the bottom of that channel again. After entering those positions
Monday, I'll have BSC, CHB, IOM, PAYX, and SPF stock; BTTRX and DHIYX
bond funds; and BORL, MADGF, PFE LEAP Calls.
BORL at 7.687 is in an Intermediate Term Up Trend Channel with
the top at 12.8 and the bottom at 7.25. It fell from a high of 12.87
near the top of the ITUTC in mid November to the bottom of the channel
setting a low of 7.25 twice during the last week. It's also in a
Short Term Down Trend Channel (STDTC) which it hasn't broken out of
yet. It bounced off the bottom of the STDTC during the first of last
week. The indicators support a bottoming action and I'm expecting the
ITUTC to hold and the STDTC to break. The fundamentals aren't bad
with a PSR of 1.88, Debt/Equity of 0.18, and 17% insider ownership.
The revenue drop and negative earnings have turned positive in the
last couple of quarters so I'm hoping that the turn around has begun.
If it hasn't, we are close to the bottom of the channel and will be
stopped out with only a small loss. I'll open a position in the
Jan2000 10 Calls (LOBAB, Bid 2.25, asked 2.5) Monday. I'll set my
initial target just under the top of the channel at 12 and my initial
stop just under the bottom of the channel at 6 3/4.
IOM at 12.437 just bounced off the bottom of the same ITUTC I
profited from last year although I did have to adjust it for the 2/1
split in late December. The top of the ITUTC is at 17.2 and the
bottom at 11.9. After hitting the top of the channel in late
November, IOM fell through most of December and bounced off the bottom
of the channel a couple of times in the last two weeks. It broke the
STDTC Wednesday. The fundamentals are still good with the PSR at
2.12, Debt/Equity of 0.13, 31% insider ownership, and rapidly
increasing revenues and earnings. There has been some bad press about
competition entering the removable drive business, but that's what
gave us this buying opportunity. I'll open a position Monday and set
the initial target at 17 and the stop at 11 3/4 which is an excellent
reward/risk ratio.
I'll send charts to everyone on the email list. If you aren't on
the list and want on, just yell. The only obligation is participation
in this email forum.
Jim
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