3 WEEKS TIGHT PATTERN

3 weeks tight pattern is defined as three weekly closes of a stock price each within a 1% close of the previous week. A 3 weeks tight pattern and sometimes it could be 4 weeks depending on the overall market indicates the stock is trading at a tight price range on low volume ideally, this action points to institutional support.

If you are new to investing, I want you to read the definition of a 3 weeks tight pattern again and again until you fully memorise and understand it, why? This simple pattern can be the difference between you making or losing money in the stock market when done right by following a few simple rules set out below.

As a new trader you are bombarded with so many trading strategies and techniques that you end up confused and losing money, if all you do was to pick one strategy like a 3 weeks tight Pattern or any strategy that you resonate with you and focus purely on learning, researching, back testing this strategy until you comfortable enough to start trading with it then you are way ahead of 90% of new traders out there that try everything new out there and end up losing money.

Let us look at a recent example of a 3 weeks tight pattern had you been looking out for could have made you a lot of money.

APPLE Inc

Apple went on to move from an entry point of $431.46 (add 10cents to the price of the highest bar within the 3 weeks pattern) to $545.17 where it presently at that is a huge $113.71 move in 6 weeks!

Another example is Visa,Inc

RULES FOR 3 WEEKS TIGHT PATTERN

1. Price must clear the buy point on strong volume before initiating a position, do not buy just because you have seen a 3 week pattern form.


2. Volume on break out must be above 40% above average or greater than the last 6 weeks at least.


3. General market must be in a confirmed uptrend, do not buy if market is in a correction phase.


4. Avoid thinly traded stocks or stocks that trade under 500,000 shares daily.

The markets has had a good run since October last year and many leading stocks are extended beyond their buying range, a 3 week tight pattern offers a secondary entry point for investors, on my watchlist this week are a couple stocks that may fall in this category, such as

Alexion Pharmaceuticals Inc

F5 Network Inc

Charts from finviz.com.

Happy Trading

John O.

Please post comment or questions below

Cloud Computing,The Future

What is Cloud Computing?

Cloud computing enables you to access files and programs on your computer from across a network such as the internet.

Cloud computing is no new technology ,everyone of us at some stage has used some form of cloud computing technology, how be it on a small scale. If you have an e-mail account with a Web-based e-mail service like Hotmail, Yahoo! Mail or Gmail, then you've had some experience with cloud computing. Instead of running an e-mail program on your computer, you log in to a Web e-mail account remotely. The software and storage for your account doesn't exist on your computer -- it's on the service's computer cloud.

icloud a service provided by Apple for it users to transfer information and data automatically between devices such as the iphone and ipad. Amazon Cloud Playerwhich provides easy streaming of your music to any device without having to save them on your hard drive first.

There are many advantages for companies and individuals to use a cloud computing service such as time and cost savings, easy access to applications and data from anywhere and anytime. There are a few concerns such as security and privacy which are being addressed, my view is companies that provide cloud computing services have their reputation to protect so it is very important for them to have reliable security measures in place to keep their clients happy or else they will be out of business.

Read article on how cloud computing works here

As a trader i am more interested in the companies that are major players in the cloud computing field and are growing their business aggressively,by this i mean growing sales over 25% and EPS over 25% quarterly. Two companies have come on my radar and as the overall market is in a correction right now, this an ideal time to look for a secondary entry points that may reveal themselves soon,lets take a closer look at these stocks.

RACKSPACE HOSTING (RAX)

Rackspace Hosting, Inc. provides cloud computing services, managing Web-based IT systems for small and medium-sized businesses, and large enterprises worldwide. Its service offering combines hosting on dedicated hardware and on multi-tenant pools of virtualized hardware in a way that suits each customer's requirements. The company offers dedicated cloud services comprising customer management portal and other management tools for managing the data center, network, hardware devices, and operating system software; and public cloud that provides pooled computing resources delivered on-demand over the Internet to manage a pool of computing resources across a larger base of customers and deliver computing resources to businesses when they need them. It offers cloud servers for computing, and cloud files for storage, as well as cloud applications, such as email, collaboration, and file back-ups; and hybrid hosting that provides hosted computing on dedicated hardware and on pools of shared resources. The company also offers customer support services. It sells its service suite through direct sales teams, third-party channel partners, and online ordering. The company was formerly known as Rackspace.com, Inc. and changed its name to Rackspace Hosting, Inc. in June 2008. Rackspace Hosting, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

Current Earnings

EPS % Chg (Last Qtr) 80%

Last 3 Qtrs Avg EPS Growth 66%

Annul Earnings

3 Yr EPS Growth Rate 42%

Sales

Sales % Chg (Last Qtr) 32%

3 Yr Sale Growth 24%

Salesforce.com Inc (CRM)

salesforce.com, inc. provides customer and collaboration relationship management (CRM) services to various businesses and industries worldwide. It also offers a technology platform for customers and developers to build and run business applications. The company's Salesforce CRM services enable customers and subscribers to record, store, analyze, share, and act upon business data, and to help businesses manage customer accounts, track sales leads, evaluate marketing campaigns, and provide post-sales service. It markets sales force automation features of its application services under the Sales Cloud brand name; and customer service and support automation features under the Service Cloud brand name. The company also provides various collaboration cloud products, such as Chatter, Chatter Plus, Chatter Mobile, Chatter Free, and Chatter.com that provide a private and secure corporate social network for companies of various sizes. In addition, it markets Force.com, a cloud computing platform under the Custom Cloud brand name that enables customers and developers to build complementary applications; and AppExchange, an online directory that provides customers to browse, test-drive, share, and install applications developed on Force.com platform. Further, the company offers professional services comprising consulting, implementation, and training services. salesforce.com, inc. markets its services primarily through its direct sales, and referral and indirect sales. The company was founded in 1999 and is based in San Francisco, California.

Current Earnings

EPS % Chg (Last Qtr) 39%

Last 3 Qtrs Avg EPS Growth 20%

Annul Earnings

3 Yr EPS Growth Rate 40%

Sales

Sales % Chg (Last Qtr) 38%

3 Yr Sale Growth 28%

Charts and Info courtesy of Finviz.

A few other stocks in this field look promising such as Fusion io, Inc (FIO) which is relatively new but is growing rapidly, the key is to do the research and get in early before the masses.

Happy Trading.

PLEASE RATE AND COMMENT BELOW

PLEASE RATE AND COMMENT BELOW

The Future is Mobile Payment

Google, Mastercard, Barclaycard, Ebay, Visa, Amazon, to name a few, what do all these companies have in common? The answer, mobile payments!

They all see mobile payments as the future and are gearing up their efforts to make this a reality sooner than we all might think.

Mobile payment is an alternative payment method. Instead of paying with cash, cheque or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods such as:

• Music, videos, ringtones, online game subscription or items, wallpapers and other digital goods.


• Transportation fare (bus, subway or train), parking meters and other services


• Books, magazines, tickets and other hard goods.

And why is this important ?

Firstly the technology, NFC (Near Field Communication), that allows mobile payment and other remote transactions via smartphone has been around for awhile but has been gaining traction recently, analyst predict a 1.5b growth in the number of handsets with NFC capability over the next 3 years.

More recently Visa the world’s largest payment processor announced a major partnership deal with Vodafone that will allow mobile phone customers to pay for goods and services using their handset, read full article on Visa

Google, Barclaycard, Paypal are all ramping up activity in this new and competitive market.

All this bodes well for an investor looking for an early opportunity to invest in an emerging market with good growth potential, a few stocks on my radar that could do well when mobile payments finally take off and have an integral part to play in this new and exciting market are Verifone (PAY), NCR Corp (NCR), Global Payments (GPN), NXP Semiconductors (NXPI), Broadcom (BRCM), let us take a closer look at them below.

Verifone (PAY)

Verifone Systems, Inc. designs, markets, and services electronic payment solutions in North America and internationally. It provides system solutions, including countertop electronic payment systems that accepts magnetic, smart card, contactless/ radio frequency identification(RFID) cards, and near field communication(NFC) enabled mobile phones; secure PIN pads that support credit and debit transactions; and wireless system solutions that support Internet protocol-based code division multiple access, general packet radio service, bluetooth, and wireless fidelity technologies. The company also offers products for consumer-activated functionality at the point of sale; contactless/NFC payment solutions consisting of contactless readers primarily for consumer-activated transactions with contactless cards, tokens, and NFC-enabled mobile phones; and Gemstone family of products comprising integrated electronic payment systems for petroleum companies. In addition, it provides server-based payment processing software and middleware; unattended and self-service payments hardware and software integration modules, such as vending machines, ATMs, ticketing kiosks, petroleum dispensers, public transportation turnstiles and buses, self-checkout, bill payment, and photo finishing kiosks; retail bank branch solutions; mass transportation solutions; and network access solutions. Further, the company offers client services, customized application development, advertising publishing, taxi payments and advertising, cardholder data security, annual software maintenance program, and repair services. It serves financial institutions, payment processors, petroleum companies, large retailers, taxi fleets, government organizations, healthcare companies, independent sales organizations, and advertisers.

NCR Corp (NCR)

NCR Corporation provides technologies and services that enable businesses to connect, interact, and transact with their customers in the financial industry worldwide. It offers financial-oriented self service technologies, such as ATMs; cash dispensers; software solutions, including the APTRA application suite; and consulting services related to ATM security, software, and bank branch optimization for financial institutions, retailers, and independent deployers. The company provides self-service kiosks to the retail and hospitality, travel and gaming, healthcare, and entertainment industries; retail-oriented technologies, such as point of sale terminals, bar code scanners, software and services; wireless self-check-in/out for patients with information systems and physician practice for management systems; check and document imaging solutions consisting of hardware, software, and consulting, and support services that enable capture, processing, and retaining of check and item-based transactions.

Global Payment (GPN)

Global Payments Inc. provides electronic transaction processing services for merchants, independent sales organizations (ISO), financial institutions, government agencies, and multi-national corporations located in the United States, Canada, Europe, and the Asia-Pacific region. It offers a comprehensive line of processing solutions for credit and debit cards; business-to-business purchasing cards; gift cards; and electronic check conversion and check guarantee, verification, and recovery, including electronic check services, as well as terminal management. The company also offers proprietary software products to establish revolving check cashing limits for the casinos' customers in the gaming industry. In addition, it sells, installs, and services automated teller machine and point of sale terminals; and provides card issuing services, including card management and card personalization. The company markets its products directly, as well as through ISOs, retail outlets, trade associations, alliance bank relationships, and financial institutions.

NXP Semiconductors NV (NXPI)

NXP Semiconductors NV, through its subsidiary NXP B.V., provides mixed signal solutions and semiconductor components primarily in Japan, Europe, South Korea, Rest of Asia Pacific, and the Americas. It offers small signal, power, and integrated discretes; and amplifiers, bipolar transistors, data converters, diodes, rectifiers, microcontrollers, sensors, and thyristors. The company's products are used principally in automotive, identification, mobile, consumer, computing, wireless infrastructure, lighting, and industrial applications. It also develops audio and video multimedia software solutions for mobile phones.

Broadcom Corp (BRCM)

Broadcom Corporation designs and develops semiconductors for wired and wireless communications. It provides a portfolio of system-on-a-chip (SoC) and software solutions for the manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices, which enable the delivery of voice, video, data, and multimedia content to the home, office, and mobile environment. Its broadband communications products include cable modem SoCs; femtocell SoCs; MPEG/AVC/VC-1 encoders and transcoders; xDSL, passive optical network, and cable modem customer premises equipment and central office solutions; powerline networking SoCs; and digital cable, direct broadcast satellite, terrestrial, and Internet protocol (IP) set-top box integrated receiver demodulators. The company's mobile and wireless products comprise Wi-Fi and Bluetooth SoCs, wireless connectivity combo chips, global positioning system SoCs, multimedia processors, applications processors, power management units, VoIP SoCs, mobile TV SoCs, and near field communications tags. Its infrastructure and networking products include Ethernet copper transceivers, Ethernet controllers and switches, backplane and optical front-end physical layer devices, security processors and adapters, and broadband processors. The company markets and sells its products through direct sales force, distributors, and manufacturers' representatives in the United States, as well as through regional offices, and a network of independent distributors and representatives in Asia, Australia, Europe, and North America.

Charts and Company Info courtesy of www.finviz.com.

Mobile payment it seems is here to stay but much depends on integration by the retailers and public acceptance of this new way of payment, from the charts above we see that these companies have come a long way of their lows in 2011 and are at potential buy areas,some like PAY have broken out,in my next blog we will look at ways to trade this and what investment vehicle will work best such as OPTIONS more specifically using LEAPS ( LONG TERM ANTICIPATION SECURITIES).

Be Safe and Serene.

John O

Spirit Airlines (SAVE) Bull Flag Breakout

As a trader, one of the key rules in finding great stocks with good upside potential is to look for what companys the big institutional investors are quietly buying but are still under the radar to most investors.

How do you find these stocks ?

The key is to watch the volume and price action of a stock with good fundamentals,especially when the stock has been thinly traded in the past.

One such stock that has come on my radar and is one to watch is Spirit Airlines, Inc,(SAVE).

Spirit Airlines empowers customers to save money on air travel by offering ultra low base fares with a range of optional services for a fee, allowing customers the freedom to choose only the extras they value. This innovative approach grows the traveling market and stimulates new economic activity while creating new jobs. Spirit's modern fleet, configuration and other innovations enable Spirit to burn less fuel per seat than competitors, making Spirit one of the most environmentally-friendly U.S. carriers. Spirit's all-Airbus fleet currently operates more than 175 daily flights to over 45 destinations throughout the U.S., Latin America and Caribbean.

With such a sound business model and in the current economic climate where everyone is looking to save money it is no surprise ,why institutional investors like this stock.

The airline went public in may last year at $12 and has been thinly traded since then until recently,but interestingly last 3 quarters average EPS growth is 329%!, EPS change last quarter 117%,sales last quarter 42%. Spirit Airlines announce earnings on Feb16,if it beats earnings then this one to watch for the right buying opportunity.

Technically the chart shows a bull flag breakout pattern, the stock has a had a good run up since mid January and a four day correction which was very constructive on low volume which is what you want to see with a bull flag pattern, a potential entry point will be around the $20.05 price level .

View chart below.