Bulkowski’s Watch List

Written by Thomas N. Bulkowski and copyright © 2008-2010 by Thomas N. Bulkowski. All rights reserved.

The following is my watch list of securities that I am interested in buying. Since I am so selective, I may not buy any of them, but these are the closest ones to making the grade.

Consider these stocks as just the first cut in a long process of elimination. They have not been filtered for anything other than I find them interesting, so you should do additional research before trading them. I am not recommending that you buy any of these stocks. No stocks that I currently own appear in the list unless otherwise noted and unless I bought it after the last update. See the privacy statement and disclaimer for more information.

I have a computer program that builds this list by finding the most recent chart pattern in the file. That may or may not be the one I am interested in, so keep that in mind. This list is updated whenever a change occurs and time allows. Stocks may appear or disappear without this list being updated.

Removal Philosophy

Finally, there are two reasons for a security listed in the Additions section to not appear in the list. The first is that I bought it. Stocks I own, as I mentioned above, will not appear in this list. I don't want to be accused to touting stuff I own.

Second, is that I conducted more research or something happened in the markets to make me remove the security from my shopping list. It fell out of favor for whatever reason. I don't disclose the reason for removal (I used to), because maintaining the list is just too much trouble. Even updating it when I add a stock is a pain.

Watch List

If no securities appear in the list, then I don’t see anything worth buying. Click on the symbol for a more detailed discussion of the security. This list is automatically generated, so the patterns found here are the most recent ones located in the stock, but are not necessarily the ones I am looking at. Read the list of additions for a more accurate picture.

Industry: Chemical (Specialty)

Industry RS rank: 7 out of 51

Stock RS rank: 135 out of 668

Latest close as of 02/18/2010: $22.51

1 Month average volatility: $0.57. Volatility based stop (assuming an upward breakout): $21.19 or 5.9% below the close.

Change year to date: 17.12%

Volume: 90,900 shares

3 month average volume: 177,675 shares

 

Chart pattern: Horn bottom reversal pattern from 08/03/2009 to 08/17/2009

Performance rank: 14 out of 23.

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 9%.

Throwbacks occur 29% of the time.

Price meets the measure rule target 76% of the time.

Industry: Homebuilding

Industry RS rank: 44 out of 51

Stock RS rank: 421 out of 668

Latest close as of 02/18/2010: $13.22

1 Month average volatility: $0.33. Volatility based stop (assuming an upward breakout): $12.43 or 6.0% below the close.

Change year to date: 10.07%

Volume: 371,400 shares

3 month average volume: 485,465 shares

 

Chart pattern: Rectangle top continuation pattern from 01/07/2010 to 02/11/2010

Performance rank: 12 out of 23.

Breakout is upward 68% of the time.

Average rise: 39%.

Break-even failure rate: 9%.

Throwbacks occur 64% of the time.

Price meets the measure rule target 80% of the time.

Industry: Air Transport

Industry RS rank: 6 out of 51

Stock RS rank: 419 out of 668

Latest close as of 02/18/2010: $33.94

1 Month average volatility: $0.75. Volatility based stop (assuming an upward breakout): $32.24 or 5.0% below the close.

Change year to date: -2.39%

Volume: 1,472,600 shares

3 month average volume: 1,873,080 shares

 

Chart pattern: Head-and-shoulders bottom reversal pattern from 08/06/2009 to 09/03/2009

Performance rank: 7 out of 23.

Breakout is upward 100% of the time.

Average rise: 38%.

Break-even failure rate: 3%.

Throwbacks occur 45% of the time.

Price meets the measure rule target 74% of the time.

Industry: Computers and Peripherals

WARNING: This industry is within the top 7 that Dead-cat bounce often.

Industry RS rank: 10 out of 51

Stock RS rank: 420 out of 668

Latest close as of 02/18/2010: $14.30

1 Month average volatility: $0.46. Volatility based stop (assuming an upward breakout): $13.23 or 7.5% below the close.

Change year to date: 11.20%

Volume: 131,800 shares

3 month average volume: 224,705 shares

 

Chart pattern: Dead-cat bounce from 10/29/2009 to 10/30/2009

Industry: Shoe

Industry RS rank: 3 out of 51

Stock RS rank: 538 out of 668

Latest close as of 02/18/2010: $9.76

1 Month average volatility: $0.41. Volatility based stop (assuming an upward breakout): $8.47 or 13.2% below the close.

Change year to date: -1.81%

Volume: 62,100 shares

3 month average volume: 84,151 shares

Based on the average volume, this security may be thinly traded (less than 100,000 shares)!

 

Chart pattern: Pipe bottom reversal pattern from 02/01/2010 to 02/08/2010

Performance rank: 2 out of 23.

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price meets the measure rule target 83% of the time.

Industry: Homebuilding

Industry RS rank: 44 out of 51

Stock RS rank: 521 out of 668

Latest close as of 02/18/2010: $16.65

1 Month average volatility: $0.66. Volatility based stop (assuming an upward breakout): $15.05 or 9.6% below the close.

Change year to date: 21.71%

Volume: 2,871,500 shares

3 month average volume: 4,383,797 shares

 

Chart pattern: Double Bottom, Eve and Eve reversal pattern from 10/07/2009 to 10/22/2009

Performance rank: 6 out of 23.

Breakout is upward 100% of the time.

Average rise: 40%.

Break-even failure rate: 4%.

Throwbacks occur 55% of the time.

Price meets the measure rule target 67% of the time.

Industry: Homebuilding

Industry RS rank: 44 out of 51

Stock RS rank: 510 out of 668

Latest close as of 02/18/2010: $13.65

1 Month average volatility: $0.65. Volatility based stop (assuming an upward breakout): $12.03 or 11.8% below the close.

Change year to date: 31.38%

Volume: 93,300 shares

3 month average volume: 174,188 shares

 

Chart pattern: Flag, high and tight continuation pattern from 07/10/2009 to 08/28/2009

Performance rank: 1 out of 23.

Breakout is upward 100% of the time.

Average rise: 69%.

Throwbacks occur 54% of the time.

Price meets the measure rule target 90% of the time.

Industry: Homebuilding

Industry RS rank: 44 out of 51

Stock RS rank: 516 out of 668

Latest close as of 02/18/2010: $34.57

1 Month average volatility: $1.18. Volatility based stop (assuming an upward breakout): $32.12 or 7.1% below the close.

Change year to date: 11.37%

Volume: 501,500 shares

3 month average volume: 733,269 shares

 

Chart pattern: Head-and-shoulders bottom reversal pattern from 11/20/2009 to 01/05/2010

Performance rank: 7 out of 23.

Breakout is upward 100% of the time.

Average rise: 38%.

Break-even failure rate: 3%.

Throwbacks occur 45% of the time.

Price meets the measure rule target 74% of the time.

Industry: Homebuilding

Industry RS rank: 44 out of 51

Stock RS rank: 568 out of 668

Latest close as of 02/18/2010: $11.49

1 Month average volatility: $0.43. Volatility based stop (assuming an upward breakout): $10.51 or 8.5% below the close.

Change year to date: 14.90%

Volume: 4,326,500 shares

3 month average volume: 7,988,215 shares

 

Chart pattern: Pipe bottom reversal pattern from 12/07/2009 to 12/14/2009

Performance rank: 2 out of 23.

Breakout is upward 100% of the time.

Average rise: 45%.

Break-even failure rate: 5%.

Throwbacks occur 44% of the time.

Price meets the measure rule target 83% of the time.

Industry: Toiletries/Cosmetics

Industry RS rank: 1 out of 51

Stock RS rank: 248 out of 668

Latest close as of 02/18/2010: $16.47

1 Month average volatility: $0.45. Volatility based stop (assuming a downward breakout): $17.38 or 5.5% above the close.

Change year to date: 5.78%

Volume: 376,900 shares

3 month average volume: 533,042 shares

 

Chart pattern: Rectangle bottom continuation pattern from 11/27/2009 to 12/30/2009

Performance rank: 12 out of 21.

Breakout is downward 55% of the time.

Average decline: 14%.

Break-even failure rate: 16%.

Pullbacks occur 69% of the time.

Price meets the measure rule target 50% of the time.

Industry: Homebuilding

Industry RS rank: 44 out of 51

Stock RS rank: 434 out of 668

Latest close as of 02/18/2010: $23.26

1 Month average volatility: $0.89. Volatility based stop (assuming an upward breakout): $21.31 or 8.4% below the close.

Change year to date: 18.07%

Volume: 978,400 shares

3 month average volume: 1,277,914 shares

 

Chart pattern: Triple bottom reversal pattern from 11/02/2009 to 12/11/2009

Performance rank: 7 out of 23.

Breakout is upward 100% of the time.

Average rise: 37%.

Break-even failure rate: 4%.

Throwbacks occur 64% of the time.

Price meets the measure rule target 64% of the time.

Industry: Furn/Home Furnishings

Industry RS rank: 5 out of 51

Stock RS rank: 101 out of 668

Latest close as of 02/18/2010: $3.20

1 Month average volatility: $0.13. Volatility based stop (assuming an upward breakout): $2.84 or 11.3% below the close.

Change year to date: 1.27%

Volume: 1,112,000 shares

3 month average volume: 801,243 shares

 

Chart pattern: Horn bottom reversal pattern from 11/16/2009 to 11/30/2009

Performance rank: 14 out of 23.

Breakout is upward 100% of the time.

Average rise: 35%.

Break-even failure rate: 9%.

Throwbacks occur 29% of the time.

Price meets the measure rule target 76% of the time.

Industry: Alternate Energy

Industry RS rank: 48 out of 51

Stock RS rank: 85 out of 668

Latest close as of 02/18/2010: $7.66

1 Month average volatility: $0.47. Volatility based stop (assuming a downward breakout): $8.65 or 12.9% above the close.

Change year to date: 0.39%

Volume: 2,016,800 shares

3 month average volume: 2,830,615 shares

 

Chart pattern: Rectangle bottom continuation pattern from 01/22/2010 to 02/18/2010

Performance rank: 12 out of 21.

Breakout is downward 55% of the time.

Average decline: 14%.

Break-even failure rate: 16%.

Pullbacks occur 69% of the time.

Price meets the measure rule target 50% of the time.

Industry: Homebuilding

Industry RS rank: 44 out of 51

Stock RS rank: 598 out of 668

Latest close as of 02/18/2010: $19.10

1 Month average volatility: $0.65. Volatility based stop (assuming an upward breakout): $17.73 or 7.2% below the close.

Change year to date: 1.54%

Volume: 4,152,300 shares

3 month average volume: 3,721,374 shares

Warning: the quarterly earnings announcement is due within the next 3 weeks (but verify to be sure), so consider avoiding a trade.

 

Chart pattern: Triangle, symmetrical continuation pattern from 10/28/2009 to 02/10/2010

Performance rank: 16 out of 23.

Breakout is upward 54% of the time.

Average rise: 31%.

Break-even failure rate: 9%.

Throwbacks occur 37% of the time.

Price meets the measure rule target 66% of the time.

Industry: Petroleum (Producing)

Industry RS rank: 15 out of 51

Stock RS rank: 481 out of 668

Latest close as of 02/18/2010: $38.73

1 Month average volatility: $1.00. Volatility based stop (assuming an upward breakout): $36.02 or 7.0% below the close.

Change year to date: -1.40%

Volume: 16,136,600 shares

3 month average volume: 12,956,894 shares

 

Chart pattern: Channel from 10/21/2009 to 11/18/2009

Industry: Insurance (Prop/Casualty)

Industry RS rank: 34 out of 51

Stock RS rank: 455 out of 668

Latest close as of 02/18/2010: $25.54

1 Month average volatility: $0.39. Volatility based stop (assuming a downward breakout): $26.32 or 3.1% above the close.

Change year to date: 3.65%

Volume: 620,800 shares

3 month average volume: 978,155 shares

 

Chart pattern: Triangle, descending reversal pattern from 10/29/2009 to 11/24/2009

Performance rank: 10 out of 21.

Breakout is downward 64% of the time.

Average decline: 16%.

Break-even failure rate: 16%.

Pullbacks occur 54% of the time.

Price meets the measure rule target 54% of the time.

Additions

I've been playing with Stan Weinstein's method of buying stocks, and found a number of stocks that look interesting. I added CRDN, EXPD IN, KSWS, KBH, MHO, MDC, PHM, RGS, RYL, ZZ, SOLF, TOL, WRB. All of these show the 30-week moving average trending upward after a large decline. Price is recovering and will be above the moving average or is already there. I haven't looked at what the profit potential is nor have I looked at the fundamentals. Be careful with these.

2/2/10: I added United States Oil (USO). This will be a buy if price can close above 42, the recent tops, on good volume. This can move up to 48 (overhead resistance from 2006 to 2007 then using a Fib retrace of the recent move down from the 2008 high, shows values of 82.50, 71, and 60. Long term target would be 60 to 71. Home construction index fund (ITB) gained 5% today, suggesting the market believes housing construction will recover. Long term, this could hit 32 from the current 13.

1/26/10: I added Somaxon Pharmaceuticals (SOMX) to my watch list. In the next 2 months, I expect the FDA will approve their drug for insomnia. The drug may not put you to sleep quickly but it's supposed to keep you asleep. This is a high risk play, since the FDA has turned them down twice before for the same drug.

1/5/10: I went shopping for new securities to buy and found three: XLF, UNG, and IAT. All are exchange traded funds. IAT and XLF have gone horizontal for the last few months. UNG is awaiting a confirmed double bottom. Once price rises enough, it will confirm that the downtrend is over and it will be time to buy. On the longer chart, it shows a nice rounded turn.

12/23/09: I added Century Aluminum (CENX) because it appears to be doing well with good upside profit potential, but I haven't researched the company much beyond that. I have looked at the company in the past and found it lacking, since China is increasing its exports of aluminum. Insiders are buying, at least the last time I looked.

12/17/09: I added Headwaters (HW) to the list because of the breakout upward from an ascending triangle when the market dropped over 130 points. This company will do well in 2010 and 2011 as infrastructure projects from the Federal budget come on stream. They are getting their financial house in order while expanding profit margins. I also added Ferro (FOE) because chemicals appear to be doing well and this is the only company with overhead resistance far enough away to be enticing. They have reduced debt and have improved financials, which will help in the future.

11/16/09: I added Coldwater Creek (CWTR), a stock I've owned before. This looks like the start of a Big W chart pattern with a breakout upward from a congestion region. Lots of insider selling so that's not good. Earnings will be reported on Nov 24 but based on how the stock has performed after many prior announcements, the stock could move up. Short term, I see a rise back up to 7 then 8 from 6 now. Longer term this could rise to 17 to 25 but that will take 2-3 years. But it's a potential triple. If earnings are bad, the stock could drop to 5 for starters then maybe ease lower to 4.

10/23/09: I added Delphi Financial Group (DFG) and Universal American Financial Corp (UAM). Both are insurance carriers. UAM looks like a flat base but I don't see a catylst for growth. DFG looks like a better play but it's more expensive. Both report earnings on Oct 28, so I'm going to wait and see what happens. For DFG, I see upside to 38 (almost a double) and for UAM, I see 18 (a double). Those targets are likely to take 1 to 3 years, maybe more...or less

10/5/09: I added Dow Chemical (DOW) based on their new solar shingle. This is what I consider to be a brilliant idea but it's costly, about $27,000 to reduce a house's electricity use by 60%. At that rate, it would take me 63 years to reach breakeven on my electricity consumption. I almost bought this after reviewing it on April 5 when it was trading at 11 and thought it was too expensive. Now it's at 25. Oops.

9/14/09: I added YRC Worldwide (YRCW) over the weekend but it's a high risk (possible bankrupcty) play on a long flat base. Upside is a return to 12 then 36 for a longer term hold. Also added was Vivus (VVUS) but it's not a buy at this price. It has good potential for a blockbuster drug but the CEO sold 200k shares today. When insiders dump the stock, you have to wonder...

9/10/09: I added Hartford Financial Services Group (HIG) as a long term holding. It will recover from the financial crises and return to its old high. Target 59 to 83 in 3 years. I also added Protective Life (PL) for the same reason. Stock could double to 34-37 and even 40.

9/9/09: I added Interface Inc (IFSIA) as a long term play on the recovery in the housing market. They sell modular carpets world wide so as the housing market heats up and the global economy begins to move, this stock should recover. It is mired in a rectangle top now.

9/1/09: I have been following Bassett Furniture (BSET) for several days now, but the stock is up too far to be worth buying. Maybe on a retrace but volume is almost too thin to be worth buying this one anyway.

8/14/09: I decided to lower my utility holdings (slow growers) to take advantage of the long term view of stocks. That freed up some cash, which I may use to buy these stocks: LDSH, LEN, PDC, SPF, and TSO.

7/29/09: I added a number of securities today. Here are the symbols: ACI, CPX, FOE, FLOW, PCX, SGR.

7/28/09: I added icad (ICAD) and Antigenics (AGEN), both risky biotech plays for the long term.

7/14/09: I added Polyone Corp (POL) and hhgregg (HGG). Insiders are buying POL and it has formed a head-and-shoulder bottom from Dec '08 to now. S&P has an investibility quotent of 0%, which is the worst you can have. Wow. Has comparatively high debt, 67%, but the cheap stock may explain that. HGG is looking at increasing their store count from 110 to 400 in next 10 years. Cash flow is being pressured but commission based sales force is motivated. Insiders bought at the Nov lows but sold in June. Not a good trend.

7/11/09: I added Medivation (MDVN) to my list because of promising developments in its drug pipeline for Alzheimer's. I expect the stock to drop significantly sometime over the next year which will make it a good buying opportunity before the announcement of clinical trial results in 2011 (but perhaps earlier if all goes well).

6/26/09: I added a number of stocks based on their profit potential over the coming years. Look on the weekly scale to find overhead resistance well above the current price. Since they are so numerous, I only list the symbols: ANF, AA, ANN, AIZ, CHS, KELYA, PDC, PL, SCS, VLO.

-- Thomas Bulkowski