Monday, August 11, 2008

I let Tobinator SCOOP me, well not really

but I made sure his Quarterly Newsletter made it out in e-mail before I publish this article I wrote for his Newsletter. It should contain some of the elements we have covered here, and provide a good review below, with the chart above.

Challenger (Amex - CHQ): is a Canadian Energy Company, whose Primary
Play is in Trinidad in a JV with Canadian Superior Energy [ SNG [Amex also ].
Personally I have followed SNG for some time, since the 1’s & 2’s, but I could
never get a handle on how the stock moved. Interestingly CHALLENGER is
an easier stock to trade, if that what you want to do. The warrants make an
interesting trading proposition as they are STRIKE @ $4.40 and run until
March 6, 2010, and at $1.60 ea, they are evaluated as UNDER VALUED.
What makes the stock soooo interesting to me is a Breakout from a Quad
TOP formation with a projected eventual objective of $11.25.
This is primarily a Nat Gas play [the primary play motivating the stock now ] in
the prolific Caribbean Basin, and this is the first well that has been ‘brought-in’
in this particular section. What makes it of individual interest is that the well is
flowing more gas than predicted and will be coming into production by their
estimates within 60 days.
CHQ has interest in the oil and gas patch off Nova Scotia and around Sable
Island, but that is not the clincher, nor are their interests in Western Canada.
You can find mucho activity about it on the Yahoo boards, Investor Village,
Stockhouse, and probably Agora. While that is NOT where I’d start my DD, it
is a place to get an idea of whom the players are, and get up to speed on
developments surrounding the company.
Oh yes I have an upside objective for Nat Gas which is a screamer, and is
multiples of its current price, which makes this stock even more interesting.

Trinidad has the largest Nat Gas refinery and LNG operations in the
America’s and is a stable jurisdiction oriented to protecting that economic
asset, so I do not expect any upset from that quarter.
The chart below provides me with two formations glaring right back at me.
1/ First and obvious is the Breakout from a Quadruple Top. I love quads they
take years to unwind, and run and run and run. This formation has the least
number of failures to perform of any I have ever watched.
2/ Second and almost as obvious is a Symmetrical Triangle forming RIGHT
OFF THE QUAD ! ! ! Usually they resolve in the direction of the TREND.
Right now doing a Vertical Count, I’d say it could give a $3.00 pop from the
point of its breakout,
For me, it’s the Technicals that are compelling here, clearly illustrating a great
deal of buying pressure,that is a direct result of its fundamentals. The stock,
since QUADS could take awhile to work out, might be like MCF was, a clear
keeper to the top, whereas I think the warrants would offer a great trading
play up and down, up and down.
For you who’d like to see my trading take on how to run it, you can contact
me, Denaliguide, also on MSN. Credits to
for their chart. For the record, both myself and associates have positions in this stock and warrants.


The QUEST, Sophistication thru Simplicity


The quest for profits is fraught with danger. Emotions. Treacherous Markets. Hidden Agendas. New Players. Changing dynamics.

What sets the Successful Questors aside from the rest? Inside Information. Huge Capital. Financial Agility. Nerves of Steel.

My answer is that it is a mixed bag, some, all, none of each. That is a very strong “I DON’T KNOW !!”

What do I know. I know for every long side of a transaction, there is a short side. Normally, there are not many ties in the marketplace, and also the HOUSE gets a piece of the action.

Whereas when someone says: “ It was a BAD WEEK in the MARKETS”, I can only assume they meant for their mindset. Were they short? Were they long? What was the counter party to their transaction -> I bet that Counter Party had a GOOD WEEK in the MARKETS.

THEREFORE it depends on your viewpoint. Did we get our viewpoint from market dynamics, and try to fit IT TO THE MARKET, or did we HAVE a VIEWPoint and try to MAKE THE MARKET FIT that viewpoint? ?? Which approach HURT more?

I know I HATE getting whipped in and out of my stops. BUT that is way less painful that enduring a position that goes south on me and stays there ! ! !

Ricard Wycoff once said it was much more important to heed what the market was saying about others, than to heed what others were saying about the market.


The below is what I consider objective, from Stockcharts this morning. This is not to suggest, that I think it is the ONLY way. No ! ! However we know this to be objective information. It is mathematical and physics, and must obey all the laws of those disciplines. Therefore, I would be inclined to depend upon it, and my findings concering it, rather than the subjective ramblings of any writers, myself included.

P&F Quadruple Top Alerts (NYSE) Create your own scans
8 Aug 2008
Symbol Name Exch Open High Low Close Volume
CKR Cke Restaurants, Inc. NYSE 13.000 13.800 12.920 13.660 1139524
IHI iShares Dow Jones U.S. Medical Devices NYSE 61.420 62.470 60.993 62.436 172733
MDT Medtronic, Inc. NYSE 52.330 53.830 52.180 53.740 7336946
TMO Thermo Fisher Scientific Inc. NYSE 59.960 61.150 59.760 61.000 2731644
UFI Unifi, Inc. NYSE 3.400 3.490 3.180 3.300 780502

What does it really tell us> ? ? It tell us that these stock broke upward out of a trading range however long, bounded by three previously unsuccessful tries to breach the upper boundary of that trading range. That’s ALL it tells us. We can learn and infer far more, but that’s ALL it tells us, but that is IRREFUTABLE, alth subject to retraction and reversal.

Now ask yourself, what of the subjective market writings that we read daily is NOT subject to retraction and reversal? Also how do we vett or verify that information?
WE KNOW THIS INFORMATION to be perfectly VETTED and it is information on hand at this instant.

Look at the chart of CKR on the previous post. Do your own homework [ DYOH] and then do your own due diligence [ DYODD ]. There are many methods out there. Pick any two or three that you can cross reference and cross correlate, and DYOH, DYODD.

Oh yes, tis nice to talk with other passengers when we are on a boat, at the rail, but if too many crowd onto the same side of the boat, well you tell me what happens ? ? ?