In order to find our entries, let’s first look at what the market’s doing right now, and whether we’ve actually topped out. Here’s a glimpse at the daily index charts off the March 2009 lows:

The NASDAQ, Dow and S&P indexes have uptrends that are still intact. The green lines, the blue line and the 50-day moving average are your guides. As of this moment in time we see no top in the market.

That said, if we see a quick run sometime next week to a retest of the highs and then a pullback off of that retest, those developments will create a double top and I would then be more apt to want to call a short term top at that time.

Why does the presence of a double top cause us to be more likely to change our position on the market? Because the double top is one of the most common early warning alert system patterns telling you a “Change in Trend” may be near.

The Two Ways to Buy a Stock

So now that the indexes are pulling back, but remain in a clearly defined uptrend above their uptrend lines and 50-day moving averages, we want to focus on stocks that are in the same position and have simply pulled back off of their highs to those support levels. This is called trading in tandem with the market.

Now, there are two ways to buy stocks. The first way is to find a stock that has formed a base and buy it when it breaks into new highs above the base. This is called buying a traditional breakout. Here’s a look at a recent breakout:

As you can see from the chart, after breaking out, the stock quickly turned tail to retest what was resistance (now should be support), and actually closed under support or back in the base. If you had bought them with a stop loss, chances are after a few days of feeling good you were stopped out.

Now let’s look at the second way:

As you can see here, this issue broke out. But most breakouts consolidate their gains and retest the area that was once resistance. So rather than chase the stock, we patiently wait for it to come to us.

In this case, the pink line represents the stock’s pullback off of its highs back to what was once resistance -– and is now support. Our buy point is a break above the pink line.

A classic buy support and sell resistance trade. That’s a lot better than chasing a stock only to get stopped out as the stock retests support and then takes off without you.

So what does that mean for us today? It means that since the markets have pulled back to near short-term support, now is the time to be prepared to take advantage of these opportunities — opportunities to buy stocks in confirmed uptrends at a risk-adverse place.

Sincerely,
David Grandey

Source: Buying Stocks Safely Using Alternative Entry Points

• Over $50 billion in product sales last year included some form of nanotechnology.

• The National Science Foundation’s asserts the nanotechnology market will top $1 trillion by 2015. You don’t need me to tell you, but I will… Few industries, if any, can boast such strong prospects.

My problem was that time and again all I saw was gobs of money pouring into research without a penny in real profits.

Worse yet, whenever I did find a compelling technology – one capable of actually making money – it was typically buried as a tiny operation beneath a megacap. Even if the technology gained traction in the marketplace, its investment potential would be largely muted.

Nevertheless, the inquiry compelled me to do more digging. And I’m not afraid to admit that I spoke too soon. I found a pure-play nanotechnology stock with plenty of potential and a healthy stream of real profits.

Nanotechnology’s Profitable Niche – Spintronics

Nanotechnology – the control of matter on an atomic and molecular scale – has only one unmistakably profitable niche, spin electronics (or spintronics for short).

Don’t worry. If you haven’t had a physics class in years, I’ll keep the geek-speak to a minimum. Here’s what’s important to know…

Seventy years ago, physicists discovered that an electron has two main components: a negative charge and a spin. Since that time, however, electronics have only tapped the potential of the former – an electron’s negative charge – to power devices.

They’ve ignored the spin, until now. Enter spintronics.

The Simple Goal of Spintronics

The goal of Spintronics is simple – to acquire, store and transfer information using the spin state of electrons rather than their charge. A nanometer-sized semiconductor is the engine that makes it work.

Exactly how big (or small) are these semiconductors? Some can be…

• Less than one ten-thousandth the thickness of tissue paper.
• One million times thinner than a penny.
• 25,000 times thinner than household aluminum foil.
• 5,000 times thinner than the aluminum lining of potato chip bags.
• One-tenth the weight of a typical housefly.
• A typical coffee cup could hold approximately 700,000 sensors.
• An Altoids box could hold more than 500,000 sensors, neatly stacked.

And some of the newest products are fast becoming even smaller.

The upshot is much faster data processing speeds; less energy consumption or even non-volatility (storing data without power); more degrees of freedom; and increased storage density (up to 100 times, or more).

NVE Corporation – The Leader in Spintronics

Given the advantages, many researchers expect spintronics – specifically, magnetoresistive random access memory (MRAM) – to be the next big thing in computing and nanotech stocks in the coming decades.

Top physicist Johan Akerman expects the technology to become the “universal memory” on its ability to combine “all the strengths and none of the weaknesses of existing memory types.”

Albert Fert, the co-recipient of the Nobel Prize for Physics in 2007, concurs, saying that MRAM and its offshoots will likely be the “universal” memory of the future.

No surprise, R&D cash is pouring into spintronics, especially from tech giants Intel and IBM. They’ve set up research shops at many of California’s premier universities.

So how can we tap into this up-and-coming market, estimated to be worth $13 billion (or more)?

Consider NVE Corporation (Nasdaq: NVEC).

• The Eden Prairie, Minnesota-based company is the leading research and developer of spintronics devices. Granted, it’s the smallest company in the space. But it possesses an unparalleled amount of intellectual property – 50 U.S. patents and over 100 worldwide, most of them related to MRAM.
• This vast store of knowledge helps the company develop new products and attract even more contract research (150% more in the most recent quarter). But most importantly, it helps box out the competition.
• You see, NVE Corp.’s patents are so expansive and valuable that competitors will eventually need to license NVE’s key technologies to get their own products to market.

Without question, this will translate into a huge earnings windfall for NVE Corp. There’s also a chance that one of the 800-pound spintronics gorillas (IBM or Intel) could takeover NVE to gain access to these patents.

Either way works for us.

Of course, I would never base a recommendation soley on a company’s takeover prospects or the potential for license agreements. Because both might never materialize.

Nanotech Stocks – NVE Corp Boasts Healthy Spintronics Business

Beyond MRAM, NVE Corp. boasts a very healthy business in spintronics-based sensors (electronic devices used to acquire information such as position and speed) and couplers (devices used to transmit data between electronic systems).

Its blue-chip customers include the Department of Defense (weapons), St. Jude Medical (NYSE:STJ) (pacemakers and defibrillators) and Starkey Labs (hearing aids) to name a few.

And here too, NVE Corp. outmaneuvers the competition:

• Its sensors and couplers are increasingly smaller, more precise and more reliable.
• In fact, last year NVE rolled out its next generation of packaged sensor systems, which are less than one-fifth the size of its predecessor.
• Furthermore, the company’s latest medical sensors are 30% more sensitive.

Add it all up and NVE Corp. operates in an untapped billion-dollar market, it has a first-mover advantage and it’s the consummate innovator in the spintronics space. All that’s left is to confirm the fundamentals. And it easily passes the toughest screens…

NVE Corp. Posts 16 Consecutive Quarters of Sales Increases

NVE Corp. has posted 16 consecutive quarters of year-over-year sales increases and 13 consecutive increases for earnings. In the most recent quarter sales leapt 23% and earnings climbed 45%.

It keeps improving its already robust gross margin, too. This quarter, margins jumped four points to 70%.

And the ever-frozen credit markets don’t matter – the company’s balance sheet is squeaky clean with no debt and $3 million in the bank.

Best of all, though, only one analyst covers the nanotech stock. So its cutting-edge technology, blistering growth and undeniable competitive advantages have largely gone undetected.

That’s the only rational explanation for the stock trading near its 52-week high, at such a modest price of roughly 18 times forward earnings.

But I don’t expect this disconnect between price and fundamentals to last much longer. In fact, the company reports earnings after the bell tomorrow.

Full disclosure: I originally recommended this stock nine weeks ago to the White Cap Report subscribers. And we’re sitting on a 44% gain right now.

Come Thursday, however, we expect that number to be much higher.

Good investing,

Louis Basenese

Source: Nanotech Stocks: Profiting From Spintronics With NVE Corp. (NVEC)

We see this played out everyday as more brokerage firms struggle to survive and unfortunately, we see folks like Madoff facing serious charges.

Here’s how you can take control of your investments:

1.    Understand what the market is doing.

That’s first and foremost. You can invest in a good stock that’s breaking out of a set-up, but if the market direction isn’t behind you, it’s like riding a bike into a fierce wind. You must understand where the market is and where it’s likely to go in the short-term. Then, invest in the best set-ups that will be helped by the market direction. It’s much easier to ride a bike with the wind at your back.

2.    Trade only the best set-ups.

Let’s take a look at NVEC, which triggered a long-side trade last week…

When a stock is moving higher, it doesn’t go straight up. Instead it rises, then has mini-downtrends where it consolidates its gains before moving higher. These mini-downtrends are where it pulls back off of its highs in an orderly manner — often to an area of key support such as its upward trend line and/or 50-day moving average.

We connect the lines of the mini-downtrend. A break above the pink line triggers a trade on the long side. For that reason, NVEC was an ideal long side set-up last week:

On Tuesday morning, NVEC triggered a trade by breaking above the pink line.

By Tuesday’s close, we were already enjoying a gain of 5%. And Wednesday morning, we locked in gains of 8.9% — a nice gain in today’s market in just over 24 hours.

This leads to step #3.

3.    Take your profits when you have them.

While on the surface, a 9% gain may not seem like much, I have to tell you that if you just did one trade like that a week, you’d significantly outperform most brokers, money managers and mutual funds. After all, most of these money handlers are nothing but “Managing To A Benchmark” cookie-cutter indexers that know how to sell but not how to manage. Have you seen what the indexes and mutual funds are down year to date? If your traditional account mimics the indexes, you know you’re working with one.

Just think about it. Let’s say you have a portfolio of $50,000. And you invest in 200 shares of NVEC at 28.22. After selling it at $30.74, you’ve made a profit of $504. Multiply that by 52 and you have a one-year profit of $26,208 or 52%! And that’s just from doing one trade like NVEC a week.

What would a one-year gain of $26,208 do for you? Well, it would easily put you well ahead of what most brokers could do for you.

Stocks may continue to go in the direction we want after we take profits. But for the time being, you are never going to go wrong ringing the register on short-term gains. For example, what if we didn’t lock in our NVEC gains at $30.74? Our gains would have been gone as the stock went right back to where it was when it originally triggered.

Now don’t get us wrong. We aren’t out to get brokers. We know a lot of them and many are very good. But the point we are trying to make is the days of handing your money over and expecting a traditional Wall Streeter to perform are over. To be successful, you have to be in control of your investments. After all, only you have your best interests at heart. As good as your conventional Wall Streeter may be, he’s not able to watch your investments as good as you can.

Source: Quicker, Safer Trades Every Week