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All,
Looks like we got that great week I wanted last week. It was just one
week late. Everything now looks so bullish that it worries me <G>. The
DJI, NASD, NYA, OEX, and SPX indices all closed at new all time highs
Friday. The RUT made its all time high Wednesday and was close Friday. All
very bullish and all very scary, but I'll follow my system and invest the
rest of my cash this week to be 100% invested all on the long side again.
However, I will be watching my stops closely.
Since everything is looking so bullish and since I just added a large
cap position in AOL Thursday, I want to add some spice with another small
cap this week. I looked into the medical group to try to find another
winner like CMED. I think I may have found one, but want to add a warning
for anyone that is thinking about doing the same thing. This stock,
Computer Motion Inc. (RBOT) has a great story, but it is a microcap (market
cap = 100M compared to CMED's 254M) that only trades an average of 20,000
shares per day. It is trying to fully automate all surgical operating rooms
with voice activated computerized controls and is also providing micro sized
voice controlled robots that can actually be inserted into a person's body
to perform less invasive surgical procedures. It is the world leader in
medical robotics, is creating the cornerstone technologies and products for
tomorrow's Intelligent Operating Room(tm). The company develops,
manufactures and markets proprietary computer-enhanced and robotic surgical
systems which enhance surgeons' capabilities, improve outcomes and reduce
costs. With this story, I think it has the potential to be a real winner,
but it's so small that there is also a high risk that it will stumble some
where along the way and end up bankrupt.
RBOT at 11 7/8 gapped up Friday to break out of a Short Term Down Trend
Channel (STDTC). The stock has been very volatile since it was issued on
8/12/97 from a high of 17 7/8 in May and again in July of 1998 to a low of
6 1/8 in September of 1998. It then set a high of 15 3/8 on 12/10/98 before
falling to a double bottom in March 1999 and again in late May 1999. The
current Short Term Up Trend Channel (STUTC) was constructed from the May low
to Friday's close for me to use in setting my stop. The fundamentals are OK
except for negative earnings. The price/sales at 9.44 isn't that high for
this industry, there is no debt which is good for such a small company, the
revenues are growing at 40% per year, and the negative earnings are forecast
to be cut in half this next year. I'm going to open a position some time
Tuesday although I'll probably watch for a while to see if it is going to
try to retreat to fill the gap. I'll set my initial target just under last
year's high at 17 and my stop just under the STUTC at 9 3/4.
I'm experimenting with a Yahoo web site with the intent of posting my
charts, strategy, and formulas there. I hope to have it done next week. If
I do get it finished, I'll no longer email out charts. I am emailing
RBOT.GIF charts to my email list, but this may be the last week. I hope
posting to a web site will make it easier for all of us.
JimG
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