Executive Newsletter North of the Blue
America's Stock Analysis System
April 27, 2010 |
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| Greetings! |  Our Wednesday evening seminar is getting closer. If you started the seminars on March 31, this one's for you. If you are in the other class, please feel free to join us and brush up on your basics and the Integration Rule.
This week our Agenda will focus on the Integration Rule. Remember when we talked about bringing out a "Report Card" to help you grade stock buys and sells? We found this to be an even better approach because it emphasizes the fact that North of the Blue is a cohesive system. Nothing functions alone. The Blue Moving Average (BMA) depends upon the Power Sectors and on the volume. No one part can be really understood without considering the other parts. We will also review the basics, including our Basic North of the Blue Rule and the modifications that allow for early buys and early sells.
Here's our Wednesday evening promise: We will not close the door until we have dealt with everyone's questions. So don't be bashful. I want to take the time to single out Ryan Butcher for praise. He has constantly sought out and begun to master the principles of stock analysis. He never lets up. He's up early to check on the closing of foreign markets and the preview of ours. He willingly shares his knowledge with others, a rare attitude in the rather cut throat world of stock traders. To reward him we have established a new list: RYANPICKS! Some of the stocks are the result of Ryan's research and others were brought to him for analysis by our subscribers. Our subscribers have found that they can trust Ryan to provide thoughtful well studied conclusions. So congratulations Ryan. Now perhaps we can have a real comparison between DICKPICKS and RYANPICKS. Finally, here is big news for those of you who don't live in the Portland area. We will begin webcasts within the next two weeks. You will be able to see what we are talking about and enjoy the comments and questions brought up by you fellow investors who will also be on the line. This will take your understanding of North of the Blue to a completely new level. Enjoy and let us know what you think. The best of all investing to you. Dick |
| What's New! |
 Look to next week's letters to gain some insight into the Blue Moving Average. The BMA is what makes North of the Blue unique.
Please note two things. First many earnings are being released this week. This will cause many drops and jumps in after hour trading. Second Greece's financial issues are being felt across the globe. Tread carefully. Don't forget your stops!
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| What Do You Want From Us? |
I am afraid that we are overloading your Spam circuits. Here is our current mailing schedule. Monday and Thursday Ryan sends out our Red Runners. On Tuesday/Wednesday I finalize our Executive Newsletter and drop it into the email. The weekend we reserve for research and analysis of stocks that have shown promise during the week. Sometimes none do; sometimes there are dozens showing promise and we have to pare the selections back heavily.
So here's our question to you: Are you getting too much information from us? Would you like fewer stock insights or more? Please let us know because you are the ones we want to please. |
| Red Runners in North of the Blue |
Our Red Runners' program is growing with great help from Ryan and the many subscribers who have contributed their research and analytical talents. We are trying to stay ahead of the stocks we list so that Red Runner selections really are ones that recently left a Red Zone in a stock's Power Panel. |
| Metals Sector -- A New Listing |
I used the term "Metals" because it was handy. It could easily have been "Raw Materials". Right now the list is available only in our drop down list for either of the charts we show. No point in giving our information away for free to those who don't subscribe. Our initial offering includes primarily gold and some silver stocks. I'll expand this as circumstances warrant. My other reason for the emphasis on gold is my belief that, after serious analysis, I see a great short term gain in gold stocks. The major backers of the euro have a major problem on their hands. Greece may very well default on everything. Portugal has also developed problems. Where this will end is anyone's guess. I am not sure that we will see investors flock to the dollar after what the current administration has done to this once the mightiest currency of them all. That leaves us with ...
Now take a look at the performance of metals in the last few days. During this week I will update you on some of my gold selections. If Mr. Norm Butcher is at our Wednesday meeting, I will encourage him to talk about his enormously successful gold investing program. It existed before North of the Blue but he admits that with NOTB the best he could do got even better. I am never too proud to ask others what led to their success. We all need to do this. |
| North of the Blue's Vision |
Three principles set us apart from other stock analysis companies:
Support
Whether you are a paying subscriber or are using our system on a trial basis you will get world class support from your fellow Americans. American's wrote this program, support this program and help the program's users.
Stocks
Four times per week you will receive stock suggestions from us. The stocks we send out meet one or more of our buy or sell rules. That's right, we tell you when stocks meet our sell tests too.
Simple and Transparent Rules
As you all know, we have one basic rule, our North of the Blue Rule. In essence it says that a stock meets our buy test when it climbs North of (up through) our Blue Moving Average (BMA) and meets our basic sell test when it drops South of (down through) our BMA. The rest of our rules are variations on this theme. This last rule is the reason that we have so many professional people as subscribers. CPA's, lawyers and others who deal with rules in their daily lives appreciate the fact that we not only tell you that a stock meets our buy or sell test but we also tell you why. |
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Indexes Year to Date | % Change Year-to-Date | Market |
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| 18.53% | North of the Blue Current Portfolio |
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| 8.15% | Nasdaq OTC Comp Index |
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| 7.76% | Amex Composite Index |
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| 7.11% | S & P 500 Index |
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| 5.46% | Dow Jones Industrials Index |
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| 5.46% | IBD New America Index |
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| 6.18% | N.Y.S.E Composite Index |
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| 7.15% | Gold Index |
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*For a detailed listing of the top stocks in each sector please go to the "List" section of our program. The first stocks will be those with the highest high last week. For example, the first 45 stocks in the "Retail" list is a listing of the stocks and their charts. After the "------" you will find those from the prior week and after the next "------" those from two weeks ago, etc. You get the picture.
Update 4/27/2010 | The Company you May Keep: Always investigate before you invest. Always check our chart. Does your stock meet one of our Buy Rules? Is the price up more than 5% from a defined Buy-Point for the rule you are using? Over 5% may be more risky. Fundamental research includes knowing annual and current earnings and sales increases, high return on equity, better profit margins, sponsorship, market in a confirmed upturn. When either a sector or the market overall are in a downturn you need to pay particular attention to your reasons for buying. What, for instance, convinces you that a particular stock can buck a broad trend?
A company's inclusion in one of our lists should not be viewed as a recommendation. Many are newer, smaller and highly volatile companies that require further research due to their speculative nature. Companies located outside the United States bring added risks because of the influence government policies may have on the company. Detailed research on your part is imperative. | |
Buy-Watch
North of the Blue's - Red Runners
April 27, 2010
| CAGC | China Agritech | Action: BW 4/27 at $18.43
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REASONING: CAGC is attempting to stay just outside our 15% Red Zone. We have watched the stochastics come together and stay flat. The market shows both buy and sell days. I can imagine it creating a new support/resistance line in the near future. CAGC does NOT meet any buy rules. Watch carefully.
| | GILD | Gilead Sciences Inc
| Action: BW 4/27 at $40.37
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| REASONING: TNDM 4/12 Gilead
Sciences Inc still runs in the Red Zone. On Friday it had made an
attempt to build pressure to break out of the Red Zone. Keep watching
GILD it seems its holding strong around the $40.00 range. | | AGU | Agrium Inc
| B-W 4/27 close $60.41. |
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REASONING: AGU has returned to being a Red Runner. It broke out of the Red Zone
last week only to find itself back once mroe. The exciting thing
is that the stochastics have come together. The menacing point is that resistance line it bounced off of.
Lets continue to watch this to see if it creates and Improper W.
| | HEAT | SmartHeat | B-W 4/27 close $8.70. |
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REASONING: HEAT-
SmartHeat Inc. The stochastic W that didn't make it. That resistance
line proves itself again and again. Once HEAT breaks that resistance
line we will see it take off.
| BWEN
| Broadwind Energy
| B-W 4/27 close at $4.01 |
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REASONING: BWEN 4/27 Both stochastics are below the 15% moving closer together. My gut says BWEN will be here awhile longer. We will keep watching its movement.
| | MON | Monsanto Co
| B-W 4/27 $63.38 at close; |
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| REASONING: MON
Monsanto Co is another teasing stock. Mon tends to break out of the
Red Zone only to return. My eyes set upon the Blue Moving Average that
is trending downward. The good thing about Mon is the stochastics are
staying close. It had another bad day opening down and staying there. | | CML | Compellent Tech | B-W 4/27 $12.79 | REASONING: CML on 4/27 re-entered the Red Zone. It had a nasty sell day. CML has a Lawsuit against them for the shareholders. I don't think we will see much movement om CML for awhile so we will watch it for you.
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Ryan's Notes Week April 27, 2010
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PWRD | Perfect World Company | Action: Buy: 4/21 at 35.50
Action:Watch to Sell on 4/27
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REASONING: Buy:Last week Ryan sent out a notice on this Red Runner. Since then we have seen two buy days with an initial push out of the red zone. Take note in late February that it tried to make the same push but failed to make it to the 50% line. For risk takers this is a buy in Ryan's book. It follows the correct Stochastic Rules. But watch it closely and set a stop.
4/27
Reasoning: Watch to Sell : Buying early has its risks and PWRD decided to make a turn and dive back down to the 15% Line. If you look in Feb it did the same thing. The stochastics remain together and that is my only hope to watch it bounce to life.
| WOR
| Worthington Industries
| Action: Bought 4/25 on open at $16.31
Action: Hold 4/27 at $15.95
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REASONING: WOR had what I call an Improper W. ( see WX below for a definition of a real Stochastic W) I was very excited to purchase this stock yesterday morning to find its high bouncing off the BMA(blue moving average) and settling at $16.42 Today 4/27 we witnessed the creation of a Resistance Line at 16.43. My thoughts are mixed and I hope to share with you what I have learned about the BMA in next weeks Newsletter. I will hold on to WOR to see if the Resistance Line will turn into a Support Line shortly.
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CTEL | City Telecom | Action: Buy/Watch:: 4/20 close at $14.79
Action: Buy/Watch: 4/27 close at $15.17
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REASONING: Basic Rule would apply here as the stock bounced off the BMA. We saw two days of strong buying followed with a strong sell day. CTEL looks to bounce yet again. The only concern is the stochastics have made quite a large split.
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ABT | Abbott Labs; | Action: Buy/Watch:: 4/20 close at $53.06
Action: Watch: 4/27 close at $49.77
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REASONING: 4/20 A very neat Stochastic W and two stochastic's paired and moving up. For you Top Guns, you may wan to join Ryan and think about a buy.
REASONING: 4/27 Above was mentioned a Stochastic W witch I am afraid may be thrown around to much. This Stochastic W was not all the way in the 15% and upon its exit of the 15% we see it flatten. We would like to see it shoot out of the 15% zone and race up to the 50% line.
ABT re enters the red zone and is once again a Watch.
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WX | WUXI Pharmatech | Action: Buy/Watch:: 4/20 close at $16.86
Action: Hold/Early Sell: 4/27 close at $19.40
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REASONING: 4/20 "I bought this stock at $15.11 at the close of March 23 because of a Stochastic W that formed. It met resistance at 15.60 and created a new support line at 15.40. WX bounced back and forth daily between 15.40 and 16.00. I thought to myself: "Great here is a pattern within the NOTB system. I can make some money here. I planned on selling it at the high one day so I set a sell price at $16.15. I then planned to buy back at the low, which I set for $15.40. I was thinking that with a thousand shares I would make a really nice daily profit" It just happens that I sold WX yesterday morning while I slept soundly. I woke up to WX making a move upward. It did the same thing today. I will say this: "I made a nice profit in WX, but I could have done better if I had just stuck to the NOTB sell rules." I'm now waiting for the stock to come back in to buying range. Ryan Butcher.
REASONING: 4/27- Monday we saw WX shoot up 17% reason being Charles River put 1.6billion to combine and operate companies. All I can say is I wished I had followed the rules because I sold this stock last week.
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Also check "RyansPicks" in your "RyansPicks"List in our program and NOTB-BUY-WATCH list. |
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Interest Placements for Uninvested Dollars for the Week April 27, 2010
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IEF | - iShares TR; Lehman 7 - 10 year Treasury Bonds | Action: Buy: 1/22/10 at $90.46; watch for break through Resistance Level. Hold 2/23 |
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| REASONING: Buy:Basic Rule with Early Buy. Stock moved rapidly out of Stochastic Red Zone then jumped very quickly tot 50%. Not surprising since bonds are a traditional hedge in troubled times such as we have now. Here you get the equity gain as well as the interest But watch to see if Strength lines continue to climb. Upward Price Strength is lagging. (Note: interest is paid if you hold the bond for at least one quarter.) | |
SHY | iShares TR Lehman 1 - 3 Year Treasury Bonds | Action: Buy: 1/22/10 at $83.52; HOLD 2/23; 3/9 |
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| REASONING: Buy:Basic Rule with Early Buy. Stock moved rapidly out of Stochastic Red Zone then jumped very quickly past 50%. Not surprising since bonds are a traditional hedge in troubled times such as we have now. Here you get the equity gain as well as the interest (Note: interest is paid if you hold the bond for at least one quarter.) |
Also check "DickPicks" in your "DicksPicks"List in our program and NOTB-BUY-WATCH list. | | |
Current Portfolio Holdings
April 27, 2010
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CSCO | Cisco Systems | Action Buy: 2/1 at open $22.65; hold with stops; 2/23 sold at $24.20 gain 6.84%. This may be eligible for another buy.3/2 buy 3/2 $24.66. Gain 6.83%. 3/18 HOLD at $26.42 with a gain of 16.64%. 3/23 26.75 gain 18.1% 4/6/ high $26.38 gain 16.46%; 4/9 $26.60 at close. HOLD up 10.42% in nine weeks. Annualized = 100% 4/20 HOLD Close $27.18. Gain 11.63%. 4/27 Hold Close 27.01 Total Gain
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| REASONING: Cisco has been one of the most active stocks on the NASDAQ Exchange over the past ten days. It moved out of the Red Zone while forming a near perfect "W". I say "near perfect". It is a good sign although it could be better. But, the High Price Strength and Upward Price Strength joined an dare now climbing in lockstep. This stock is poised to go North of the Blue with real strength. We are looking at a serious buy in the next day or so. Stock climbed back through the BMA and ma be in line for another buy. Cicso went back through the Blue Moving Average. Trend still good. 4/6 hold. 4/27 Continues to hold high. We will hold this one until it drops south of the blue. | |
INTC | Intel CP | Action:: BW: 2/7; buy 3/2 $21.00; 3.9 21.20 hold gain 1%; 3/18 HOLD with a gain of 6.14%. 3/23 22.75 gain 8.33%; 4/6/10 high $22.48 gain 7.05% hold; HOLD 4/9 at $22.55 close. Gain 7.38% in 5 weeks. Annualized = 47.97% annualized. 4/20 close $ 24.12 up 14.86% |
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REASONING: Intel is beginning to show serious strength. It broke through our Red Zone with ease and is now beginning to climb toward 50%. We will have to wait until the Strength lines join and the price to work its way through the numerous Resistance Lines between the current price and our BMA*. Keep this one on your radar screen. Everything I see and read tells me that silicon chip makers (That's what they make computer chips out of.) are very, very busy. 3/2 If you have any money left after buying the gold stocks look hard at Intel. I think it is poised to generate another trend line like the one we saw from July through November. Hold for very good trend. Also look at significant growth in silicon wafer sector. 4/20 hold and enjoy the ride.
4/27
REASONING: INTC has had a good run but watching the stochastics we may be using the early sell rule. We will see if INTC can bounce back to life.
4/27 Hold to watch for Early Sell Rule
| | MRVL | Marvell Technology Group | Action: B-W 3/29 $20.16; 3/6 high $21 gain 4.96% in 1 week; 4/9 hold at close of $20.97. Gain 4.02% in two weeks. Annualized = 104.52%. 4/20 close at $21.84; gain 8.39%. |
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REASONING: MRVL is ratcheting up its price every day. There are no giant leaps, but each day brings another step back and then up again. Fortunately the ups are greater than the downs and the trend line has begun to swing up. Another day or two should make this a solid buy. 4/20 Ryan says to watch this closely. We may sell soon as the stochastic's are dropping. Stop set.
4/27
REASONING: The stochastics have dropped and we are still holding. The BMA has gone flat for the moment. I believe when that yellow leaves it will show the stochastics flatten a little. Watch to sell if this is goes south of the blue.
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NEWP | Newport CP | Action: Buy at $8.67; 2/23 hold 3/9 11.41 hold gain 31.60%; 3/18 HOLD with a gain of 38.29%. 3/23 11.94 gain 37.71%; 4/6 $13.13 gain 51.444% one month hold; 4/9 HOLD closed at $13. Gain 49.94% in four weeks. . Annualized = 649% 4/20 close at $13.68 gain 57.79%. |
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REASONING: This stock has shown significant buying volume over the past week or so. Upward Price Strength and High Price Strength have joined forces and are continuing to climb. However, we need to see them pass the 85% marker before this becomes a serious contender. As you can see, the price line is poised to pass through our BMA*. 2/2 stock rebounded off Machine Generated Support Line; climbed through BMA*. Strong upward trend, hold. 5/20 watch carefully as stochastic's are going down. We may take our large profit and call it good on the 21st.
4/27
REASONING:NEWP has done very well for us. It has a great upward trend line. We decided not to sell using the early sell rule because all the fundamentals check out. Today was a sell day along the board and NEWP did not dodge the hit.
HOLD
| | TLAB | Tellabs, Inc. | Action: Bought 2/16/10 at open at $6.70; 3/2 $7.16 gain 6.87%; 3/9 7.45 gain 11.19% ; 3/18 HOLD with a gain of 17.13%. 3/23 7.66 gain 14.32%; 4/6 high $8.00 gain 19.42% hold; 4/9/ hold at $7.90 close. Gain 17.91% in eight weeks. Annualized = 116.41% 4/20 close at $8.47 gain 26.42% |
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I bought TLAB a little late but believe I can still participate in the growth based on its well established trend line. 4/6 hold as the trend line strengthens. 4/20 doing well but watch the stochastic's. May sell to protect gain on Wednesday or Thursday.
4/27
REASONING: A great sample of the new Integration Rule. The trend line is up sotchastics where above 85% (we need to see some more blue buy days to see them return above 85%)
HOLD
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| Average Gain for this Portfolio |
18.53% | |
| Average hold time for this Portfolio |
6 weeks | |
| Annualized Gain for this Portfolio |
160.59% |
| | Cash in the Bank Portfolio | |
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| Rules |
North of the Blue Stock Charts and Buy/Sell Rules
... Building-Block Strategy
... NOTB is simple, unique and driving gains out of this world
Click on "Master NOTB Chart" below. It links to a summary of North of the Blue's Chart outline. All charts use the same basic structure
North of the Blue is not built on magic dust, mirrors or slight of hand. It is built on one simple rule that allows an investor to control his or her own destiny. It is based on investments in solid stocks and analysis using our easy to understand, proprietary algorithms, charts and rules. Our algorithms and insights allows North of the Blue to give you a unique approach to making money in the stock market. | | North of the Blue does not depend on bells, whistles, arrows all over the chart and rulers that you put over a graph. Instead it builds on a single, very simple rule, to generate unbelievable profits. "Unbelievable" that is until you put the money into your bank account.
To work with North of the Blue you need to be kept current with our thinking. So, we keep you advised of our progress either in these weekly newsletters or by Twitter. In depth analysis can be found on our web site. On our web site you will see an example of how we used our basic rule and our building blocks for one stock in 2009 that led to gains ranging from 76% to 214%.Click here to see the how this happened.
Adding a rule, The Channel Rule. Click here for a well written explanation.
Here are our basic rules. We suggest that you clip these and keep them by your computer until they become second nature.
North of the Blue Basic Rule (NOTB BASIC RULE): A stock should be bought when its price is increasing up through our Blue Moving Average (BMA) and sold when its price is declining through our BMA.
But using the BASIC RULE leaves a considerable amount of money on the table. We do not capture this money because we wait for the sell half of the BASIC RULE to complete.
In order to recoup more of the gain without adding any risk we modify our BASIC RULE by adding to it our EARLY SELL RULE. The Early Sell Rule states that a stock should be sold when its High Price Strength and Upward Price Strength drop below 85%. We usually incorporate this as a confirming or auxiliary rule. Here's the complete rule:
North of the Blue Basic Rule with Early Sell: A stock should be bought when its price is increasing up through our Blue Moving Average (BMA) and sold (a) when its price is declining through our BMA OR (b) when its High Price Strength and Upward Price Strength drop below 85% on our green stochastic panel, whichever comes first.
In order to capture price gains before the stock price reaches the North of the Blue Moving Average we introduce a final modification of our BASIC RULE. The rule now provides more accurate (and more risky) early buying as well as early selling. Here's the complete rule:
North of the Blue Basic Rule with Early Buy and Early Sell: A stock should be bought (a) when its price is increasing up through our Blue Moving Average (BMA) OR (b) when its High Price Strength and Upward Price Strength join or nearly join and leave a severely oversold Red Zone, turn sharply up and climb through 50% and it should be sold when its High Price Strength and Upward Price Strength drop below 85%.
Another rule is based solely on the behavior of our Upward Price and High Price Strength for any given stock. This rule, called our STOCHASTIC "W" or POWER "W". It is a stand alone rule that does not depend on our Basic Rule. Here it is:
Stochastic "W" or Power "W": A stock can be safely bought when its Upward Price Strength and High Price Strength join and form a clearly identified "W" under our 15% Stochastic or Price Strength Line. The stock can be bought before the last part of the "W" climbs over 15%. To maximize profit the stock should be bought before the upward Price Strength line reaches 50%.
There is another stand alone rule that does not depend upon our Basic Rule. As you might expect when programmers and other technocrats get together to codify their rules for technical stock analysis, at least one rule will be based on how computers are used or programmed. Don't be disappointed because we left this until last. The rule is our MACHINE TRADING RULE. Here is the rule in a nutshell.
MACHINE TRADING RULE: A stock may be safely bought when it passes through one of our green, horizontal lines going up (Resistance Lines) OR when it rebounds up from one of these lines (Support Lines). The Machine Trading name comes from the points at which institutional investors have their computers set to buy and sell. If you look at how prices behave around these points you will see that these are the points that major market drivers come into play. More on this in a later newsletter.
Here is a rule we introduced in April of this year, our Integration Rule. It emphasizes the fact that North of the Blue is an integrated, cohesive system. All of the pieces must function together to provide valid buy and sell decisions.
INTEGRATION RULE: A stock may be safely bought using this rule when: (1) it is rising in value; (2) the Blue Moving Average (BMA) displays a smooth, upward trend; (3) there are no significant Resistance Lines above the stock price; (4) the Upward Price Strength and the High Price Strength are joined above 85%; (5) there is continuous buying volume and that volume is near or above 100% of our Average Volume. The stock should be sold when any of these conditions are no longer true.
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| How to Find Us |
Telephones:
General Office: (503) 233-9452
Support: (503) 446-9390
Address, meetings by appointment:
11000 SW Barbur Blvd, Ste 100
Portland, Oregon 97219
Mail:
North of the Blue
P.O. Box 569
Lake Oswego, Oregon 97034
North of the Blue is a dba owned by Custom Computer Programming, LLC. Billings for North of the Blue come from Custom Computer Programming, LLC | |
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Remember to join us for a detailed view of our latest rule -- the Integration Rule, where you let someone else spend the dollars proving that the stock is a good buy and you join in to collect some cash. Almost too good to be true. But, it does not cost you a penny to find out.
Sincerely,
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Richard Brenneke
North of the Blue, America's Stock Analysis System
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