First came the Herbinator. Now it's the Craminator!
doing the TA angle on Herb G., GBS today takes on JJC and his
Red Hot index. Well, at least the first six of the original 18 he listed. (In oh-so-typical form, he derides golf, then comes up with the number 18! Listen, I know you hear the siren call, Jimbo, so give into it already: Go out, buy some graphite Callaways, get fitted for some Foot Joys -- only the Classics will do for you -- join Pine Valley and be done with it!) I'll do six more on Monday and the last six next Wednesday (and as for the two newest
additions, well, I'll see what I can do -- I
a busy TV star, you know).
But before we start, two words about the Red Hot index. Word one: I thought it was a stroke of genius to even come up with it. Sure, most traders could have cobbled together something similar, but before the RHI, no one had a name for these guys. Score one for JJC.
Word two: Doing technical analysis on any of these stocks is like trying to hit
fastballs. They jump, move, slide, slither, erupt, pounce, meander and explode. And that's
the open! So by the time you read this column, these torpedoes could have done a complete 180 on me, making me look totally ridiculous.
But I'm used to that. Therefore, onward!
The first stock up is
, and while it's having a fantastic year, the same couldn't be said for previous years. In fact, from '95 to '99, this stock belonged on the Red (NOT!) list.
Ah, but now it has come into its own and has truly been inspiring this year.
The next contestant is
, a stock that not a lot of people knew about before this year. In fact, I'm betting a lot of people still don't know about it. Well, that's their problem!
Our third stock,
, I talked about on "TheStreet.com" TV show. I suggested buying near the bottom of the trend channel, but thankfully with a tight stop. In fact, I tried that play myself and got stopped out about a day later!
For now, Broadcom looks a bit on the weak side and requires that you pick the best moment to enter. Here's what I'd do:
is a stock that certainly belongs in the RHI. My problem with it? Its initial public offering was in '99, so there just aren't enough bars to make a judgment. Still, it's an interesting chart.
A few chats ago, I had a question about
, and I thought there must have been a misspelling. Conexant? Conexistant? Sextant? Nonexistent? Whatever it was, it sure was foreign to me.
However, if you're a Red Hot fan, this chart should be familiar.
Our final RHI stock of the day is
. Certainly a force to be reckoned with, but be careful. PMC-Sierra has been on a path of ever-up-sloping trend lines. What that usually means is a drastically different fundamental story for the stock or a potential blowoff. Being that the trend lines have changed a few times just
, I'm inclined to side with the latter.
So there are the first six. A word of warning, though: If you decide to play any one of these stocks, think long and hard about your money management. You can win big with these six, but you can lose big also. The trick is in figuring out both a good entry point and a high reward-to-risk ratio. I've given you some thoughts on the former, but the rest is up to you.
On Monday, the next six:
. Assuming, of course, they're still in the RHI at that time!
Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. At time of publication, he held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes five technical analysis columns for TheStreet.com each week, including Technician's Take, Charted Territory and TSC Technical Forum. While he cannot provide investment advice or recommendations, he welcomes your feedback at