Setting the Tone for 2008
Dear Bottarelli Research Member,
We’ll officially kick off the 2008 small-cap investing year next week with your first new small-cap pick of the year. But in the meantime, let me take a quick moment to address some of our current positions and the status of the major market averages. As of today’s close, the Dow gave up 260 points. All told, that’s a loss of over 400 points in the first three trading day of 2008. Make no mistake about it — the markets are now approaching oversold territory.
As I told my options traders this afternoon, the Dow is now threatening to penetrate the 12,800 level, and this level represents the floor that sparked the latest 1,000 point move from 12,800 up to 13,800 in less than a month. If the 12,800 level once again acts as support, I feel that a move back up to the crossing of the 50-day and the 200-day moving averages at 13,400 is solidly in the cards.
A similar pattern is found on the Russell 2000 small-cap chart. As you can see, the RUT is currently sitting underneath the 740 level that acted as a strong support point back in August, November, and December of 2007. If the RUT can hammer out another bottom at these levels, we could be in for a nice series of upside moves over the next 3-6 months, and this will definitely benefit all of our current small-cap holdings.
But here’s the thing: Even if the RUT does not establish a support level soon, our picks will continue to offer strong returns. Despite the weak market, for example, Solarfun Power Holdings (SOLF – NASDAQ) was closed out for a 229.42% gain. Just check out this chart!
And to replace SOLF, we entered Evergreen Solar (ESLR – NASDAQ) on November 19th 2007. Their patented string ribbon solar technology has already pushed this position up 42.39% from our original entry point. Hold for more gains.
Even more recent was our recommendation of Aixtron (AIXG – NASDAQ) from December 3rd 2007. Despite the broad-based market weakness, this compound and organic semiconductor play just hit a new 52-week high, giving us a 21.87% gain in just over one month. Hold for more gains.
And don’t look now, but our position in Origin Agritech Limited (SEED – NASDAQ) is coming back from the dead! If you recall, SEED is the Chinese hybrid seed producer that we entered on October 16th 2007 for $10.19. Ever since entering the play, SEED has been moving down, but today, the stock made an aggressive push to the upside. Check it out:
As you can see from these four examples, every one of our small-cap picks has the ability to hand you dynamite returns despite the strength (or weakness) of the overall markets. So as we move into 2008, gear up for another wonderful year of Bottarelli Research Small Cap investing, because an exciting new chapter will officially begin next week.
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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