3SOF

Today is November 22 and there are only 6 trading days left in the month. As you know the 3 SOF Fast Portfolio is reset at the end of each month and it starts over again on the first day of the month.

The objective is to make money trading stocks every single month. Yesterday was very good, with the portfolio rising 8.46%, to a gain of 9.96% in November.

After my exploration and filtering of the 11,000 stocks in my database I got to a short list of 3 stocks. They were CRAY, FNSR and Q. From these 3 I think the one that fits better the 3 SOF Fast philosophy is CRAY, since it is the one with the highest short term potential (although it has more risk too).

Here's the profile of the company: Cray Inc. (CRAY) The Group's principal activities are to design, develop, market and service high performance computer systems, commonly known as supercomputers.

Now the all history chart where you can see the stock is at a low point after a steep decline in 2004 and 2005:



Yesterday there were signs of life, with the stock rising 21% on volume above average:



It looks like the trend has changed, from bearish to bullish. Different insiders have been buying stocks of the company, which is always a good sign.

The company is selling more in 2005 than in 2004 (99.796M in 2005 versus 72.713M for the same period in 2004) and net loss was reduced from -169M to -55M. At the last 10-Q the company also says «Product revenue for the first three quarters of 2005 does not include revenue for several systems that were previously shipped and installed, and for which revenue recognition is pending customer acceptances; we expect to recognize revenue for certain of these large Cray XT3 systems in the last quarter of 2005 and accordingly, we currently expect our fourth quarter product revenue to increase over third quarter.»

I believe the stock will at least close the first gap we got on the chart below, which closes at $2.01, until the end of this month:



Accordingly, the trading plan is to buy CRAY at today's open, 33.33% of the 3 SOF Fast Portfolio capital as usual, and take profits around $2.01. I don't want to define an exit with a loss strategy today, I'll do that on the next update if necessary.

This means the trading plan is to buy the open and take profits around $2.01, otherwise, hold.

  Hey David,

        This looks like a good play. I know when you are interested in a stock you just ensure you are in, ususally with a market order. I just wanted to add the stock as risen 30%+ in the last few trading days and the RSI is around 80 could be overbought in the short term and a pullback might come before the holiday, for those waiting to get in at a better price.  GL

This had its break out yesterday at 1.35 so many got in for it but the added boost came when Briefing come mentioned it:

Cray: Color on stock action (CRAY) 1.52 +0.16: McAdams Wright Ragen says they are aware of nothing particularly new out on CRAY +11.8% this morning that is driving the stock. However, firm says that it is feeling more positive about CRAY following last week's High Performance Supercomputing Show in Seattle, where they heard positive feedback from CRAY customers, including Oakridge National Labs, the Pittsburgh Supercomputing Center, the Army High Performance Research Lab, and the Arctic Research Lab. Firm says that all indicated they want to extend their relationships with Cray as the co rolls out and upgrades their systems. CRAY also had 18 systems in the "Top 500 Supercomputers" report that was issued Nov 14, vs 9 systems in that list a year ago, and the co had 5 systems in the Top 20. Firm says that CRAY is higher-risk, speculative Buy, but the upside is significant. Maintains $4 tgt.

Quote from: patriotmp on November 22, 2005, 06:20:52 AM
Hey David,

This looks like a good play. I know when you are interested in a stock you just ensure you are in, ususally with a market order. I just wanted to add the stock as risen 30%+ in the last few trading days and the RSI is around 80 could be overbought in the short term and a pullback might come before the holiday, for those waiting to get in at a better price. GL

You were right patriotmp, the stock came down a bit so you could get a better price than I did (I also didn't buy at the open, it was too high and 5 seconds later the stock was 4% below the opening price).

Quote from: metro on November 22, 2005, 11:53:41 AM
This had its break out yesterday at 1.35 so many got in for it but the added boost came when Briefing come mentioned it:

Cray: Color on stock action (CRAY) 1.52 +0.16: McAdams Wright Ragen says they are aware of nothing particularly new out on CRAY +11.8% this morning that is driving the stock. However, firm says that it is feeling more positive about CRAY following last week's High Performance Supercomputing Show in Seattle, where they heard positive feedback from CRAY customers, including Oakridge National Labs, the Pittsburgh Supercomputing Center, the Army High Performance Research Lab, and the Arctic Research Lab. Firm says that all indicated they want to extend their relationships with Cray as the co rolls out and upgrades their systems. CRAY also had 18 systems in the "Top 500 Supercomputers" report that was issued Nov 14, vs 9 systems in that list a year ago, and the co had 5 systems in the Top 20. Firm says that CRAY is higher-risk, speculative Buy, but the upside is significant. Maintains $4 tgt.

That's great information metro, thanks a lot 

With that $4 price target and the sentence «Firm says that all indicated they want to extend their relationships with Cray as the co rolls out and upgrades their systems» I believe CRAY will make another push to $2.01 before the end of the month.

I'll continue with my trading plan of selling CRAY at $2.01. No downside considered for now.

DJ Cray Chief Scientist Leaves To Join Microsoft   

11/25/2005
Dow Jones News Services
(Copyright © 2005 Dow Jones & Company, Inc.)



(MORE TO FOLLOW) Dow Jones Newswires

11-25-05 0616ET

Copyright (c) 2005 Dow Jones & Company, Inc.

DJ Cray Chief Scientist To Leave For Job At Microsoft   



WASHINGTON (Dow Jones)--Supercomputer maker Cray Inc. (CRAY) co-founder and Chief Scientist Burton Smith will leave the company to join Microsoft Corp. (MSFT), Cray said Friday.

Smith, who is also a member of the board, will resign from both the positions Dec. 7, according to a filing with the Securities and Exchange Commission.

In an attachment to the filing, Smith said he was leaving Cray for "a new and very different opportunity at Microsoft," but didn't say what role he would play there.

Smith has held the chief scientist and director posts since early 1988. He served as chairman from 1988 to 1999.

-By Ed Welsch, Dow Jones Newswires; 202-862-1356; [email protected]


(END) Dow Jones Newswires

11-25-05 0711ET

Copyright (c) 2005 Dow Jones & Company, Inc.

Thanks for posting the news fill_the_gap 

I bought CRAY and CRAY is down 10.7% from my buying price. What to do now? Design a trading plan.

I wouldn't like to see the stock closing below the midpoint of the big white candle, that would take out much validity to it. That midpoint is $1.48. Considering the upside, I'll take profits at $2.01 or before the close of the last trading day of the month, which will be Wednesday.

Out at 1.45 pre market-

You should all do well now!

Quote from: boatguy on November 25, 2005, 08:50:36 AM
Out at 1.45 pre market-

You should all do well now!

Actually I think a gap down at the open is more positive than if the stock were to open higher. I will only take my loss if near the closing bell the stock is trading below $1.48, otherwise I'll continue holding some more time.

Thanks for sharing 

$1.48 is also the short term 38.2% fib retracement level so should be good support today....

We also have a longer term bounce off the 32.8% fib level.  The 3 black crows developing aren't very pretty though.  David, I know you will stick to your plan of selling under $1.48 but would the fib bounce normally be a good enough signal to keep this kind of stock or would this still be a sell based on the last 3 trading day's action?

Was this sold today then? I still don't see it closed under the 3 SOF Fast Portfolio.
(Sorry I am new at 3SOF)

Quote from: ASR831 on November 25, 2005, 03:24:03 PM
Was this sold today then? I still don't see it closed under the 3 SOF Fast Portfolio.
(Sorry I am new at 3SOF)

Welcome to 3SOF, ASR831!  David sticks to his trading plan, so since he didn't say otherwise, he sold it before the close.  He will always outline his trading plan and then stick to it.  Updates on the portfolio page aren't done for a day so that 3 SOF members have the information before the general public - a benefit of paid membership.  So, it should show up some time over the weekend.

I am still holding and have decided to sell on a print below the fib bounce at $1.39.  I'm not crazy about the news of their lead scientis and co-founder leaving but it may be priced into the stock since CRAY actually moved up after the gap down this morning.  We'll see what Monday brings!

Good evening!

Nice work - applaud basonista   

Quote
I am still holding and have decided to sell on a print below the fib bounce at $1.39. I'm not crazy about the news of their lead scientist and co-founder leaving but it may be priced into the stock since CRAY actually moved up after the gap down this morning. We'll see what Monday brings!

I'm holdind too but just because completely forgot the market was about to close at 1.00 pm today .
Now as David said I have to design a trading plan  .
By looking at the chart (could be wrong) I see similar pattern between the 1st and the 2nd run.  If that's the case we might see more downside before we go up since the 1st run retraced almost to 61.8% level (at the moment with the 2nd run we are sitting @ 50% level). Well there is a support @ 1.32 (which happens to be 61.8% retracement level) but will it hold ?
As Basonista said the "bad" news might have been priced into the stock since CRAY actually moved up after the gap down. Having said that I think that support @ 1.32 most probably will hold (IMO). But that is another 8% down from here.  I'm down 14% already and I'd rather cut my loses and move on then sitting and waiting to find out I miscalculated.
So I'll be looking  for exit point  near the opening .





Good luck to all still holding !

Yes, according to plan, I sold CRAY before the close at $1.43. But I think you guys that held will do better, the candlestick is bullish and after all the stock just made a 50% Fibonacci retracement of the previous bullish move.

Good luck 

Update : Tuesday, 11/29/05

State briefs: Lab plans to make supercomputer faster


OAK RIDGE

The Cray XT3 supercomputer known as "Jaguar" already is one of the fastest machines in the world, but Oak Ridge National Laboratory researchers have plans to make it even faster.

The Department of Energy facility hopes to quadruple Jaguar's speed by next year, from 25 teraflops to 100 teraflops, or 100 trillion calculations per second.

 
 

"It's going to be a challenge, but I think we're going to get close," said Thomas Zacharia, associate lab director and computer chief.

Congress boosted 2006 funding to help make that happen, from the $25 million proposed by the Bush administration up to $55 million.

The Cray XT3 is ranked as the 10th fastest computer in the world and the fastest U.S. machine available for open scientific (nonmilitary) research. The lab plans to expand the supercomputer from its configuration of 56 cabinets to about 120 cabinets and double the number of processors.

To date, the Jaguar has yielded the first 3-D numerical simulations of an ignition flame, which should help in the design of next-generation combustion devices, and uniquely precise views of molecular structures that may be used to combat genetic diseases.

"I think Oak Ridge is the place to be to do science in the United States," Zacharia said.


http://www.tennessean.com/apps/pbcs.dll/article?AID=/20051129/NEWS01/511290322/1006/NEWS