WSCI

[dwest718]

I really think that WSCI could be the real deal.  Yes a huge breakout hinges a good bit on earnings (Monday Oct. 31st) and this is one of the stocks Wise was touting but with a stop loss at 3.75 I'll take my chances.  Just looking at the chart, the picture looks quite bullish to me.  It is considered bullish when a stock breaks through the upper bollinger band.  WSCI has done it three times in the past 2 months and has had a run up of about 25% after giving a little back on the days following the break.  The chart was going to get a little cluttered so some explanation of what a put down here:
-The circles represent breaks of the upper bollinger band and associated volume increases.   Each break is is followed by a slight pull back and then a strong rise to a new high.
-The gray horizontal line represents both support for the most recent low and a good stop loss target (or you could go with 3.60 to minimize effects of daily price movement).
-The black lines represent current price trend (upward).

The stock has been trending up in general for the past year with the exception of some debt and some dependency on one customer (Polaris), is fundamentally sound.
First some stats:
Current Price: 4.05
Avg. Volume: 40.9K
Market Cap: 10.36M
Price/Sales: 0.71
Price/Book: 1.49
Dividend: 0.15    Yield: 3.8%

And some news:
Recent news out of Polaris has appeared to me as positive:
http://biz.yahoo.com/bw/051020/205953.html?.v=1

Also positive news out of WSI:
http://biz.yahoo.com/bw/050801/15566.html?.v=1

Polaris's (PII) balance sheet, income statement, and cash flows appear very solid:
http://finance.yahoo.com/q/bs?s=PII&annual
http://finance.yahoo.com/q/is?s=PII&annual
http://finance.yahoo.com/q/cf?s=PII&annual

WSI's (WSCI) balance sheet, income statement, and cash flows aren't as solid but are still pretty good:
http://finance.yahoo.com/q/bs?s=WSCI&annual
http://finance.yahoo.com/q/is?s=WSCI&annual
http://finance.yahoo.com/q/cf?s=WSCI&annual

I couldn't get the link for the annual report filed with the SEC to work but I'll try to post it in a reply.  Remember to always do your own research though and don't rely on others to find stocks for you.  Just tryin to give my opinion on one of the many plays out there!

Finally WSI's (WSCI) website:http://www.wsci.com/

[quecabron]

Newbie here. Great DD. Thank you. Sounds like a solid pick short and long term

[chalupa]

Dwest718,

What kind of TA software do you use? Those are great charts in my opinion

WSCI sounds really interresting. I'll check it out.  Thank you for the tip!

[dwest718]

Just standard sharp charts on stockcharts.com.  Go to the home page and type in the symbol you want and press enter and there you go.  Then go down to the bottom once you set everything how you want it and press add annotations and you can add w/e you want to the chart you just set up.  Hope that helps!

[dwest718]

Could I get some commentary here from one of the more senior members in our midst.  How about Melf or Setra... could I get your opinions on this stock?  I know the whole situation with Wise kind of put a damper on things but does anyone have anything to say about what I think?

[Melf Elf]

Could I get some commentary here from one of the more senior members in our midst.  How about Melf or Setra... could I get your opinions on this stock? 

dwest,

In my last post on WSCI, I liked the fact that it had found support at the top of the Kumo (Cloud), and that it had closed back above the Symmetrical Triangle.

Because of the false breakout on October 18, and the drop back below the Symmetrical Triangle, we've got a "Pattern Morph," which means that the pattern changed into something else.

The pattern "morphed" into a Bearish Rising Wedge, which you've drawn on your chart.  Rising highs and rising lows.  That doesn't mean that the pattern "has to have" a bearish resolution, but the pattern generally is bearish.  If WSCI closes above the top of the pattern, that would look alot better.

What else have we got for clues?

Thursday's candle wasn't good.  It's a Bearish Inverted Hangman.  The stock rallied intraday, but closed near the low of the day, and the upper wick is twice as much as the "real body."  That's the black part of the candle, which represents the open and the close.

Friday's candle wasn't any good either.  It's a Bearish Engulfing Pattern.  Friday's open was above Thursday's "real body," and the close was below Thursday's "real body."

Those two candles at least suggest that players aren't willing to hold the stock into earnings.

MACD doesn't look good.

1. It had a negative divergence at the October 18 high (it made a "lower low," which is a non-confirmation of the new high in the stock.

2. It broke below the October 13 low.

3. Going into earnings, MACD is "out of position," so to speak, back-testing the signal line from below it.  Often when MACD ticks down from this position, the stock can take at least a short-term hit, like AAPL and DNDN did, if you read those posts.

Summary: strictly based on those technical factors, I'd have to say that as of Friday's close, WSCI looks more unfavorable than favorable.

That said, we all know that earnings and news can be a "wild card" of sorts, and that the market will trade on its perception of the earnings report.  I think it's Stocky who gets out of stocks before earnings, which I've come to think is a real good strategy.  lol.

Here's something that I would look for: The top of your Bearish Rising Wedge comes in on Monday, October 31 at 4.548.  If earnings are out before the bell, and you see that the stock is called higher, near that price, watch to see if volume comes in.  If it opens at 4.55, let's say, and volume is coming in, and the stock stays in the 4.50s, then starts moving higher, above the opening price, you've got a good chance of a "gap and go" rally, and the stock could have a strong day.

If, however, WSCI gaps up near that 4.548 and looks weak right after that...no volume...price begins to slide to the downside, you could be looking at a "Gap To Crap," and the stock could tank for the rest of the day.

Naturally, if you can assess that the quality of earnings is really great, that will help alot, since that would  increase the chances of a "Gap And Go" rally.

Good luck, dwest.  I would love nothing more than to see those of you who still are long WSCI make some nice $$$.  I applaud you for your nice chart and efforts on WSCI.

[Melf Elf]

I know the whole situation with Wise kind of put a damper on things but does anyone have anything to say about what I think?

Yes.  If I ever find out that you are a FOURTH screen name for "Wiseman," I will kick your butt.   

[dwest718]

Thanks melf... I have to admit I didn't look too carefully at MACD but at the same time it kind of seems like if the stock does jump up tomorrow or Tuesday, it will cross zero again (positive divergence) and we could possibly have another big jump.  I also didn't recognize the bearish engulfing on Friday.  That puts even more weight on a flat to positive earnings report which makes me do one of these  .  Also, thanks for the TA in general.  I know a little bit but I really need to do some reading and learn a lot more.  The market and information is ever expanding... kinda scary actually.  Anyways, hoping my Haloween doesn't turn out to be a spookfest... earnings AH tomorrow might change my costume up tomorrow night .

[nullzero]

I got in at 4.09 and exited around 4.30, this was around the time wiseman was pumping it so I didnt get burned on that, I got lucky must of cashed out before he decided to dump.

[Melf Elf]

Anyways, hoping my Haloween doesn't turn out to be a spookfest... earnings AH tomorrow might change my costume up tomorrow night .

dwest,

I hope that earnings AH changes your costume into $$$ RICHIE RICH $$$   

[dwest718]

So much for earnings AH... This makes me quite happy!:

http://biz.yahoo.com/bw/051031/315097.html?.v=1

60K in very short amount of time =  .... but can anyone explain to me why people are selling on this news.  A sextuple of yr end earnings appears fairly positive to me  .

Apparently I have no idea what I'm talking about... but it's looking like we might see the 200 dma today.  I just don't understand this!

[Melf Elf]

but can anyone explain to me why people are selling on this news.  A sextuple of yr end earnings appears fairly positive to me  .

Apparently I have no idea what I'm talking about... but it's looking like we might see the 200 dma today. I just don't understand this!

dwest,

The technicals didn't look good coming into earnings, as we discussed this weekend, and this also could be the "dump" playing out, given that this stock is so thinly traded.

We now know that WSCI was being pumped here, and who knows where else    Notice that the stock initially jumped higher at the open, then tanked.  The pumpers likely were selling into the morning high. 

http://ts-lc.sc8.finance.lycos.com/1123874431937?User=demo&Pswd=demo&DataType=GIF&Symbol=NASDAQ:WSCI&Interval=10&Permission=1000&Ht=400&Wd=600&Display=2&Study=&Param1=&Param2=&Param3=&FontSize=10&LocaleID=0x0409

[Livana]

I've held WSCI for over a year now... I like the steady quarterly dividends 

The stock has had a nice, slow, solid uptrend since the beginning of the year.  I was thinking of selling to free up some funds for something a little more interesting.  What's the opinion?

[Livana]

I am so mad at myself.  I saw this PR last night:
WSI Industries; New Business Announced; Sales up 24%; Net Earnings Double

Now, I've had a sell order for 3.50 for a while.  Last night, I thought I should cancel the sell order and move it up, but I didn't!  This morning, well, off course it got filled and I lost on a 30% profit! Damn...

[kslifka]

I am so mad at myself.  I saw this PR last night:
WSI Industries; New Business Announced; Sales up 24%; Net Earnings Double

Now, I've had a sell order for 3.50 for a while.  Last night, I thought I should cancel the sell order and move it up, but I didn't!  This morning, well, off course it got filled and I lost on a 30% profit! Damn...

Sorry Livana....I'm thinking about buying some here.  Can anyone convince me otherwise?? 

I like the new business focus they are looking at.

WSI Industries; New Business Announced; Sales up 24%; Net Earnings Double
Tuesday March 20, 5:30 pm ET

MINNEAPOLIS--(BUSINESS WIRE)--WSI Industries, Inc. (Nasdaq:WSCI - News) today reported net sales of $4,440,000 for the second quarter of fiscal 2007 ended February 25, 2007, an increase of 24% as compared to the year-earlier quarter of $3,574,000. The Company posted net income of $155,000 or $.06 per share for the current quarter, compared to $69,000 or $.03 per share in the second quarter of fiscal 2006.

ADVERTISEMENT
Michael J. Pudil, president and chief executive officer, commented: "Our fiscal 2007 second quarter had solid revenue growth as we experienced increased sales from virtually all markets that we serve. We are pleased to report that our second quarter had the highest level of quarterly sales in over 5 years." Pudil continued: "We are most pleased to report success with our business diversification efforts by securing business with three new customers. One will be a significant new program in the energy industry, another is in the recreational vehicle market that we now serve, and a third is in the aerospace industry. For the second half of Fiscal 07, we are expecting continued top line growth as a result of these new customers even though there is a planned reduction in business from an existing customer." Pudil concluded, "We are continuing to invest in our business and are pleased with the results to date especially in regards to our customer diversification. Everyone at WSI is proud of these accomplishments."

In keeping with its announced policy to reward its shareholders, the Company also announced today that its Board of Directors has declared a dividend of $.0375 per share. The dividend will be payable April 17, 2007 to holders of record on April 3, 2007.

WSI Industries, Inc. is a leading contract manufacturer that specializes in the machining of complex, high-precision parts for a wide range of industries, including avionics, aerospace and defense, energy, recreational vehicles, computers, small engines, marine, bioscience and instrumentation.