New Blood

Despite my skepticism (*) about the near-term outlook for the market, there are always good stocks to invest in.

I probably looked at TRLG 10 times, and even canceled a buy order for call options after considering my previous evaluation of its potential in conjunction with my sense of the market's likely direction. It broke out yesterday. Sigh.

When I look at most of the leaders, they're at the top of their charts. Some of their fundamentals are deteriorating, some have become fully valued. I'm too scared to buy them at the top, so what now?

Start over. A fresh screen. Forward P/E below 20, current P/E above 20 to catch earnings growth. Sequential sales growth in at least 4 of the last 8 quarters, at least 4 instances of YoY earnings (including estimates) or sales acceleration, and optionable. Tada ...

(35) potential new best friends. I prefer the ones coming out of a light consolidation: PCP TSRA NIHD AXE & AMAT. The rest are either beaten up, choppy, or at the top. I'm ignoring airline stocks JBLU and DAL because of the whole TSA thing (I wish I could short them!). In fact, I'm looking to ditch my well in-the-money LCC spread for a modest profit instead of waiting for it to tank by January expiration.

G'luck folks!



(*) OBCHX up for 10 straight weeks. Down the last two. Not a coincidence.