January 23rd, 2006

Additions to IBD100 – Part 3

Even with the stock market declining 2.03% for the week, with nearly all of it coming on Friday, twelve stocks were added to the IBD 100 list. Of those, 9 have appeared on the list in the past while 3 are totally new:

Even with the stock market declining 2.03% for the week, with nearly all of it coming on Friday, twelve stocks were added to the IBD 100 list. Of those, 9 have appeared on the list in the past while 3 are totally new. Six of the 12 are in an Oil& Gas Industry Group. Charts on RELV and FFIV are available by clicking on the symbols in the attached table:


Company Symbol Industry Rank
RELIV INTL RELV Cosmetics/Personal Care 17
SUPERIOR WELL SVCS INC SWSI Oil & Gas-Field Svce 38
F 5 NETWORKS INC Internet-Network Solutions 50
MERIDIAN BIOSCIENCE INC VIVO Medical-Products 62
BOIS D’ARC ENERGY LLC BDE Oil&Gas-US Exploration &Dvlpmnt 68
I H S INC CL A IHP Retail-Restaurant 73
BERRY PETROLEUM CO CL A BRY Oil&Gas-US Exploration &Dvlpmnt 75
J 2 Global Communication JCOM Internet-ISP 89
Psychiatric Solutions PSYS Medical-Outpatient/Homecare 93
ANADARKO PETROLEUM CORP APC Oil&Gas-US Exploration &Dvlpmnt 95
DEVON ENERGY CORP DVN Oil&Gas-US Exploration &Dvlpmnt 96
Unit Corp UNT Oil & Gas-Drilling 98

FFIV, ranked 50 in last week’s IBD100 list has burned me several times over the past two years since it broke through the upper resistance trendline of an upward sloping triange at the beginning of 2005. It’s bounced back and forth between the upper and lower boundaries of an overlayed upward sloping wedge it’s been forming since the bottom in 2001.

I’ve found that an upward sloping wedge is one of the most difficult to read and they usually end up in downward, rather than upward, breakout. I would be cautious and alert as the price crawls closer to the apex of this wedge.

IHP, ranked 73 actually increased over 25% after originally breaking through towards the end of 2004. However, throughout nearly all of 2005 it retraced in a descending channel and retested the support trendline of that original breakthrough at 38.75. It successfully broke through the upper boundary of that channel at the end of last year. I would say that its addition to the list results from, and substantiated by, that breakout.

One of the most interesting “bumps” from the list is Builders Materials Holding (BMHC), a stock that has been on the list nearly every week (except for 10/14/05, 12/30/05 and 1/7/05) since April 1, 2005. BMHC is the case that proves the point of how hard it is to limit the list to a fixed number, like 100 stocks. I’m not sure how IBD makes their trade-off decisions but BMHC, from the chart at least, looks like a stock that could have, and perhaps should have, stayed on the list.

Company Symbol Industry Rank
Beazer Homes U S A Inc BZH Bldg-Resident/Cmml 37
SYNAPTICS INC SYNA Computer-Peripheral Equip 39
ANGIODYNAMICS INC ANGO Medical-Products 66
SHINHAN FINANCIAL GP ADR SHG Banks-Foreign 70
LOGITECH INTL SA ADR LOGI Computer-Peripheral Equip 72
LO JACK CORP LOJN Cmml Svces-Security/Safety 75
MICROSTRATEGY INC CL A MSTR Computer-Sftwr-Enterprise 76
MOTOROLA INC MOT Telecom-Wireless Equip 85
Jos A Bank Clothiers Inc JOSB Retail-Clothing 86
Building Materials Hldg BMHC Bldg-Construction Prod-Misc 87
BUILDERS FIRSTSOURCE INC BLDR Bldg-Construction Prod-Misc 88
VARIAN MEDICAL SYSTEMS VAR Medical-Systems/Equip 96

BMHC at the present looks like it’s been in a downward sloping consolidation channel. But, given the apparent slow-down in the housing market, the chart may evolve into a head-and-shoulder type of top (see the dotted line neckline. If so, removal from the list was prescient; if not, we will probably see BMHC back on the list.

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