Jim looks to be resting up, I will keep watching and when a new show is on I will be back. Keep checking in I may have articles this week while Jim is off.

Jim is off from the radio show again today, with Aaron Task at the helm again today the blog takes the day off again, thanks for reading and we here wish you all the best in your trading.

In the U.S. financial markets, an equity trading on the OTCBB or Pink Sheets or at a price below $5 can be considered a penny stock, regardless of exchange or market capitalization. The term is sometimes used generically or perjoratively of any stock with a share price below $5, however there are significant differences between stocks listed on major exchanges and those on the unregulated, penny stock exchanges, and penny stock prices can rise above $5 at times. The terms penny stocks, micro caps, small caps, and nano caps are also all sometimes used interchangeably, although market capitalization is not a good definition of whether an equity should be termed a penny stock. Penny stocks will generally have market caps under $500M and are considered to be extremely speculative stocks. LINK

Jim has the day off today so no Jimbob content today. A replay of the show from 10.4.05 here is the link to the week that was on our site. Enjoy the above information.

Bullish
Coherent (COHR), Newell Rubbermaid (NWL), Alliant Techsystems (ATK), Pantry (PTRY), Serologicals (SERO), Baxter (BAX), Rio Tinto (RTP), BHP Billiton (BHP), Foster Wheeler (FWLT), ABB (ABB), Schering-Plough (SGP), Volt Information Sciences (VOL), Basic Energy Services (BAS), Hewlett-Packard (HPQ), Best Buy (BBY) and Circuit City (CC).
Bearish
Pactiv (PTV), AT&T (T), Sprint (S), Verizon (VZ), Casey’s General Stores (CASY), Adtran (ADTN), Shaw Group (SGR), Merck (MRK), Chicago Bridge & Iron (CBI), Teva Pharmaceutical Industries (TEVA), Dell (DELL) and RadioShack (RSH)

In oil and gas, producer Anadarko Petroleum (APC) acquired Kerr-McGee (KMG) and Western Gas. The next big acquisition in Jim’s eyes involves Devon Energy Corp (DVN). DVN is the best run domestic oil play and it is selling below the value of its assets. With 7% growth and selling at 7 times earnings it doesn’t seem to be able to do anything right. The stock is down 14 from its high. A hurricane or tough winter will shoot up natural gas prices and DVN is tied to these prices. There is not enough natural gas in the world so take any decline as an opportunity to make money.

First impressions of a stock can ruin that stock for you and Knight Capital Group Inc (NITE) was ruined for Jim but he didn’t realize they had new management and his old college mate, CEO Tommy Joyce joined Jim today. In May Bernake gave a speech that change things for many. For hedge fund results Joyce pointed us to Barrons but he is happy with how the company is doing. The company is volume sensitive. Joyce feels that the biggest problem was the company was trader centered. They moved from the trader to being a client centered business. Jim gave NITE “two huge thumbs up.”

Jim said there was only three ways to make money, with high growth, consistent growth or with value stocks. Do your research, find out were your stock lays and buy what you like among these three. An example of each was given.

• Panera Bread (PNRA) – High growth. They have 1,000 stores right now and they look to go north of 3,000 stores, this means in the next three years there is potential for 24% growth. Jim likes them better than one of his favorites, Starbucks (SBUX).
• General Mills Inc (GIS) – consistent growth. Go to the supermarket. They throw off cash and still grow consistently. With a lot of products they are solid, they are a rock.
• Walter Industries Inc (WLT) – Value. 20% growth and it trades at 8 times earnings. This is the parent company of Mueller which makes pipes, and water is “en fuego” right now. WLT makes the best coal out there and the are a proven homebuilder. This is the value play.

You need to know what your after and go for it, these are just three examples of growth so if your stock doesn’t fit a category you probably shouldn’t be in it.

Today is gameplan day. Jim gave us three stocks in the first segment of his TV show that are at or near their 52-week high and will be winners next week. He wants us to buy half before the Fed meeting on Thursday and half after. The three stocks were:

• J.C. Penny (JCP) – This is the most consistent retailer out there.
• First Marblehead Corp (FMD) – They deal in student loans. The short float will push the stock higher. They have no debt and a lot of cash, plus its cheap.
• Garmin (GRMN) -This stock should get marked up. This is the single best quarter of anyone that Jim follows.

These are the three end of quarter momentum plays given to us.
Palm Inc (PALM) and Research in Motion (RIMM) report on Thursday and they will surely get lost with the Fed meeting that day also. Look for these two stocks.

Cedar Fair L.P. (FUN) is the play in theme parks. If you own Six Flags Inc (SIX) you should swap into FUN Jim said today on Stop Trading. SIX has loiterers, smokers and security probems that will hurt business among mom and dad customers.
Jim thinks the heath maintenance space is stabilizing and he mentioned Cigna Corp (CI) and UnitedHealth Group Inc (UNH). Also Health Management Associates Associates Inc (HMA) mentioned.
Gammon Lake Resources Inc. (USA) (GRS) has “something going on” right now so look here for a possible short term trade.

How does one trade penny stocks? Are there any techniques that work best? Technical analysis that uses indicators and statistics to forecast price movements is one possible approach. But due to the novelty of the penny phenomenon, technicians have not had the time to build a strategy–assuming anyone is interested in doing so. As far as analyzing sub-penny stocks, it would require a new system for charting and monitoring to determine the significance of a 0.0001-cent move, and there is no telling whether or not it would work. Trading these types of stocks is like throwing darts. Place your order and hope you hit the bull’s-eye. Stocks trading for less than $5 have, for the most part, been shunned by the technical analysis community. Volumes of less than 400,000 to 500,000 shares a day make analysis unreliable and liquidity a challenge for trading any size. But as volumes explode, this problem will be mitigated. Will technical charting techniques work on a stock trading at $0.20 with an average volume of 1 million shares per day? As long as trading is not concentrated in the hands of a few and mass-market psychology is dominant, there is no reason why charting techniques shouldn’t work.