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Welcome to the Patterson Relative Strength Report.
This is our first weekly Hotline update and it is just a couple of days after our first monthly report was published on Friday. I hope you took the time to look at the Monthly report. The Patterson Relative Strength Report is a Stock Selection / timing service that I am convinced you find most helpful.
With the market remaining strong overall we are not seeing many strong stocks pull back. The number of stocks in the Hotline Updates will vary over time. Some will receive greater coverage than others, especially when there are more than just a couple of stocks reaching our entry criteria.
Entries
Since the end of October only three strong stocks have pulled enough to reach our entry criteria.
DTLK, STAN, and CVA will be added to the Focus list at their listed entry prices. Of the three, DTLK looks the best to me.
Datalink looks very attractive. The stock ran up and has pulled back since they reported earnings. DTLK may play out as a "touch and go" meaning it just barely reaches our entry criteria for one day and rebounds. The stock has support in the $8.50 - $9.00 area. I like this one, but it is a very small stock with a market cap of about 100 million. Average volume is good at over 300k so while small, there is liquidity.
DTLK has an IBD EPS rank of 75
Standard parking (STAN) is another smaller stock, but with average volume of just 27k shares, this is not an extremely liquid name. The stock has moved higher but with an IBD EPS rank of just 35, this is not the most impressive issue. IBES earnings estimates are 2005 (actual) 1.03, 2006 1.67, and 2007 1.92. So there is expectation for solid growth.
The stock has done a nice job of following the script of late.
Covanta Holding Corp (CVA) corrected on its earnings release and has pulled back to support at about $20. It has an IBD EPS rank of 42, but earnings are growing. IBES 2005 (actual) 0.46, 2006e 0.77, 2007e 0.80. CVA is in the alternate energy business.
Exits
While we have not seen many stocks reach our entry criteria, we have seen a number of stocks weaken with their PRS_12 falling below our exit criteria of 75. The exits seen in November are listed below. These stocks have been unable to hold the strength they once displayed and we are moving on.
The Table below shows select Open Active Positions. The stocks in green are suitable for entry at this time. Stock in Red are Under Review as their PRS_12 is below 80.
For further information contact
Jim Patterson
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http://www.prsreport.com
Patterson Capital, Inc
981 Peachtree Battle Cir
Atlanta Ga. 30327
Phone 404-350-6165
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