Could you guys try to publish the "buy" and "sell" signals at least around 9am EST?! The problem is that I usually receive your Update email after the market open on my Yahoo! account, so I usually resort to constantly updating the 3SOF page to see if any new comments will appear.
Also, in regards to NOEC, the ATR indicator shows $0.47, which is ~6% from $7.35. What amount of volatility will you be expecting going forward for the Diversified portfolio?
Hey Berloga, yes we will be looking to be earlier on our instructions, that will come together over the coming days. I will answer your volatility question later, it is a good question and calls into play the overall portfolio balance.Profile:
New Oriental Energy & Chemical Corp. (NOEC), formerly known as Formerly Sports Source, Inc.), is engaged in the manufacture and distribution of fertilizer and chemical products. The products are distributed to markets in the Peoples’ Republic of China. The Company’s primary business is the manufacture and sale of urea, a chemical used as fertilizer for crops and in certain manufacturing processes, including the manufacture of resin, plastic and medicine. NOEC also produces and sells methanol. The Company’s other products include Ammonium Hydrogen Carbonate, which can be used as a fertilizer for crops and in the pharmaceutical and food industries. In addition, another product NOEC has developed Dimethyl Ether (DME). DME has a variety of industrial applications in the production of pesticides, cosmetics and as a refrigerant. On November 22, 2006, the Company changed its name to New Oriental Energy & Chemical Corp.Market Cap:
Basic Materials - ChemicalWebsite: Trading Idea:
As soon as I saw the NOEC chart I knew we had a great technical set up that could allow us to buy into momentum without over-chasing a stock way past support levels. Our downside risk is limited to the convergence of support offered by the lower area of the breakout candle, the long term descending resistance line (now broken) and the short term ascending support line.Technical Analysis:
NOEC has just broken out of an 8 month triangle pattern, and most recently put in a basing action above $4.50 before breaking the descending resistance just above $6. The entire set-up allows us to construct a nice swing trade scenario with downside risk limited as described above and upside potential around $10 (upper area) and $8 (lower area).Fundamentals:
NOEC has a $90M market cap with revenues above $60M. Their main business focus is in fertilizers and ‘green’ energy, which is a great mix of products based on current trends. There was an interesting news release regarding an environmentally friendly generator which can be read at the below linkhttp://money.cnn.com/news/newsfeeds/articles/marketwire/0403431.htm
News wise they are not overly active in press releasing and a summary of most recent developments can be found in the attached Reuters link:http://www.reuters.com/finance/stocks/keyDevelopments?symbol=NOEC.P×tamp=20080305133000&rpc=66
NOEC is forecasting $66M in revenue for fiscal 2008 (around 70% growth over 2007).
So in summary we have a nice technical set up combined with an undervalued $ growth company and hot market sectors. The ideal scenario will be immediate momentum continuation, but do not be surprised or disappointed to see upper breakout candle consolidation happening.
We won’t set an exact stop or target today, but as mentioned above you can see the guide points we will be looking at.Trading Plan:
Buy NOEC at or around the open