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Kate Stalter
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Kate Stalter is a columnist for RealMoney.com, MoneyShow.com and Morningstar Advisor. Stalter currently hosts “The Small Cap Roundup” on TFNN.com, every Tuesday and Thursday at 11 a.m. Eastern. She serves as editor of the “Low-Priced Leaders” newsletter, also at TFNN. From 2001 until 2010, she... More
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  • 17 (!) Growth Stocks with Bullish Charts 0 comments
    Dec 5, 2011 9:53 AM | about stocks: MNK, SWI, MA, HITK, SPPI, JAZZ, CMG, BWLD, ALXN, MNST, LKQ, UA, ATHN, RGLD, FTNT, ISRG, STMP, BIDU, PCLN, AAPL, GOOG, GRPN, LNKD, FIO

    There’s plenty of potential to see from the recent market pullback and subsequent rally, says Gennady Kupershteyn. He tells MoneyShow.com’s Kate Stalter about growth stocks setting up in good chart bases, and also discusses some big caps and recent IPOs worth watching.

    Kate Stalter: I’m on the phone today with Gennady Kupershteyn. He’s a coach of other investors, he publishes the Capitalist Bull newsletter, and also is an investor himself.

    Gennady, the last time you and I talked here for MoneyShow, it was back in August. The market was already in a correction. There’s obviously been non-stop volatility since then. How are you looking at the market these days, and what kind of stocks are you eyeing?

    Gennady Kupershteyn: I actually like the market quite a bit here. Compared to August, where I really believed that we could crash majorly the way we were setting things up.

    The move that we saw from the beginning of October into November, that big move up, that created a lot of volume to the upside on stocks that were setting up short. They ended up moving the right side of their bases, rather than continuing their short setups, and you had a lot of newer leadership start to reassert itself.

    Now, that move that we saw off the bottom there is actually well within precedent of the end of a bear market or major correction, which is the way I’m looking at the correction we had from about April through October.

    This most recent pullback is extremely positive because stocks like Questcor (QCOR), SolarWinds (SWI), MasterCard (MA), Hi-Tech Pharmacal (HITK), and Spectrum Pharmaceuticals (SPPI), who were early leaders in this particular rally that we saw at the beginning of October, they’ve held up amazingly well. Some of them are already bouncing off their moving averages and going into new highs on really good volume.

    The other interesting thing we’ve seen is where we tested the lows in October, the VIX did not make a new high, which again was a strong indication that fear, even though we got close to it, was starting to subside in the market.

    And this most recent pullback that we saw from the end of October to the middle of November, the VIX moved sideways and actually kind of came down and drastically has dropped in the last few days. That continues to show that fear is starting to subside.

    Unfortunately, we still have all the uncertainty with the EU and Asia and the US, but frankly, that happens at the beginning of every bull market. What it does, is it shakes out the longs, it shakes out the shorts, until you get to the point where nobody wants to believe any trend that develops in the market.

    The nice thing right now is there are a lot of stocks with strong fundamentals that are either in the process of setting up their bases or have now completed their bases, and they’re basically just waiting for the market to launch higher.

    Kate Stalter: Now, at the beginning of this conversation, you did mention some of the leading stocks that have been holding up well. Any additional ones that may be setting up in bases at the moment?

    Gennady Kupershteyn: Oh, absolutely. You have Jazz Pharmaceuticals (JAZZ), Chipotle Mexican Grill (CMG), Buffalo Wild Wings (BWLD), Alexion Pharmaceuticals (ALXN), Hansen Natural (HANS),LKQ (LKQX)—which actually broke out recently, and I think it was a little too quick—Under Armour (UA),Athenahealth (ATHN), Royal Gold (RGLD), Fortinet (FTNT), Intuitive Surgical (ISRG), Stamps.com (STMP)…the list goes on and on.

    In fact, stocks like Baidu (BIDU) and Priceline (PCLN), who I thought may have topped for good, includingApple (AAPL), they’re starting to round up their patterns and starting to look really good here again.

    My belief is that at some point over the next few months, these large-cap stocks are going to reassert themselves, and I’m pretty sure, based on history, the Nasdaq’s going to go through 3,000. And if the rest of these stocks start to move, especially the big guys like Google (GOOG) and Apple, I have a feeling we’re going to see Nasdaq 4,000 before the next bull market is over.

    Kate Stalter: That’s a nice prediction, there!

    Gennady Kupershteyn: That is a nice prediction, and I’ll tell you, my precedent is using the 1970s and I’m going well, well within that precedent. And, as I stated earlier, the move off the bottom and the pullback we just saw, that’s pretty much how most bull markets begin.

    So if the reader or whoever’s listening to his audio cast goes back and studies August 2006, September 2009…you could even go back to August 2004, you’ll see very similar action in the indexes where they shoot up off the bottom, then they scare everybody, and then they resume their trend. But at that point, nobody believes it, and you get that proverbial wall of worry.

    Kate Stalter: Let’s talk a little bit about some of the new stocks that are coming onto the market. Last time we did chat a bit about IPOs. We’ve had Groupon (GRPN) since then; there’s some anticipation about Zynga coming up this month. What’s your thought on some of the IPOs out there these days?

    Gennady Kupershteyn: They need time. Unfortunately, it seems that the hype around some of these social-networking IPOs, which I did believe could become the Internet stocks from 1999 of the current bull market. Right now, they’re kind of being sold off, distributed, they’re not really in any kind of setups.

    I really like Fusion-io (FIO). I think FIO has a phenomenal technology, storage technology. And that group you pretty much watch everybody get taken over. It ran up quite a lot and right now, it’s getting a little volatile and sloppy, but I would continue to keep an eye on FIO if it ever manages to tighten up.

    And I would also watch LinkedIn (LNKD) and Groupon. I wouldn’t be a buyer of those stocks.

    There’s just so many other names right now that are well-established companies, they have histories of earnings, they have earnings estimates that are already there and rising. For example, you got Hansen Natural and Under Armour and Alexion and Chipotle Mexican Grill. Those are the stocks I would have the investors focus on right now.

    Kate Stalter: Well, speaking of what to focus on, I want to just wrap up today, Gennady, by asking: You coach and mentor other investors as part of your work at Capitalist Bull. What are some of the biggest mistakes that you see some of the newer investors making?

    Gennady Kupershteyn: Strategy chasing. It’s the equivalent of performance chasing.

    What ends up happening is most investors want to be able to read a book or have a mentor or coach to give them a strategy that’ll work day in, day out. Even with many day-trading systems, you’re not going to make money every single day.

    So, when you get a system like mine, which is a breakout, breakdown system, and it tends to follow a trend, you’ve got to be willing to sit in cash and kind of fiddle your thumbs and do research.

    Most investors don’t want to do that. They want to be able to be active at all times and be doing something, and what they end up doing is, they’ll come in for coaching and the market won’t be there for the type of trading I’m trying to teach them, or somebody else is trying to teach them, but there might be another strategy out there that the market might be conducive to at this moment and they’re going after that.

    And the reality is: Most investors have to realize they need to pick a system that they know works, they know somebody that does it successfully—actually, a lot of people should be able to do it successfully—and then they have to realize it’s going to take years, especially if your timeframe for investment is long-term.

    So, you’re looking to swing trade or position trade, it’s going to take you a few years to get good at it, because you really have to be able to live through the various market cycles and trends within those cycles.

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