Internet service provider Earthlink Inc. (ELNK) recently turned a first-quarter profit that beat expectations as the company upped its full-year forecast. The Atlanta, Ga.,based company reported a first-quarter profit of $54.4 million, or 49 cents a share, compared with a loss of $30 million, or 24 cents a share, in the year-ago quarter. Results beat Wall Street's expectations for a profit of 33 cents a share.

As aforementioned Earthlink also upped its full-year outlook. The company now expects net income in a range of $153 million to $163 million, which is in line with analysts' estimates. Earthlink also expects annual adjusted earnings before interest, taxes, depreciation and amortization (or EBITDA) to fall between $245 million and $260 million.

With a FusionIQ Master Technical Score of 80 and close to 19.00 % of its float short ELNK looks like it not only has solid earnings momentum behind it but it also has price momentum.  The point and figure target of $ 14.50 offers good potential reward.

Gardner Denver Inc (GDI) scored a recent high volume breakaway gap on the heels of a very strong quarter where the company also raised full year guidance.  The stock has a FusionIQ Master score of 89 and also recently scored a new FusionIQ timing BUY signal.  The point and figure target on the recent breakout is $ 62.00.  Below are the fundamental highlights from the quarter for reference.

Compared to the first quarter of 2007:

Given the recent large price spike a pullback would probably offer a better entry level.

Contract electronics maker Celestica Inc (CLS) scored a FusionIQ breakout as it said on Thursday it returned to a first-quarter profit.  The company, which makes consumer electronics such as Microsoft Corp's (MSFT) Xbox 360 video-game console, said it earned $29.8 million, or 13 cents a share, in the three months that ended March 31, compared with a loss of $34.3 million, or 15 cents a share, in the same period a year earlier.  With and upside point and figure target of $ 16.00, pullbacks offer attractive entry points.

The following stocks Flir Systems (FLIR), Red Robin Gourmet Burgers (RRGB) and World Acceptance Corp (WRLD) all have sizeable short interests relative to their floats (14.71 %, 47.00 % and 25.85 %, respectively) and much higher point and figure upside targets ($ 55.00, $ 57.00 and $ 60.00 respectively) that make them attractive trading candidates based on excess liquidity that is likely to propel prices higher very quickly.

Two quick things on today’s FORD news

First of all our system put a new buy on F on 4/7/08 after multiple sell signals (see chart below) usually a signal of a change in the underlying strength of a name…

Second; our system is not just made of technical indicators, it “Fuses” technical and Fundamental matrix to help guide you in your investment decisions.  An example is the ESP (Earnings Surprise Prediction): The ESP is a score that attempts to take analysts that have been more accurate in the past and with different weightings score the possibility for a beat or miss on earnings…a score of 50 is Neutral (in line)… under a 50, a better chance for  a miss…over a 50, we expect a beat…

Ford’s ESP score for this quarter was 100 . This tells us that a big upside surprise is expected, although no-one knew the number would be as good as it was.

We have been saying our recent research publications that the market is pretty neutral here as it looks to be trying to form a possible intermediate term bottom.  Today we look at the three main market ETF's, the QQQQ's, the SPY's and the DIA's and not surprisingly all three currently have FusionIQ neutral timing signals.  So neutrality still rules and investors/traders should keep exposure levels in line with the current market directionless until more FusionIQ BUY signals appear on the BIG Three ETF's.

Dime Community Bank Shares (DCOM) yesterday registered both a FusionIQ short squeeze (approximately 12.00 % of its DCOM's float is short) and a breakout (shares traded up yesterday on over 3x its 21-day average volume).  It appears that many of the smaller banks are doing well since they likely have no mortgage exposure and therefore offer less risk potential to investors.    With a point and figure target of $ 25.50 DCOM shares offer good return potential from present levels. 

Contrary too popular opinion the transports are holding up quite well in the face of soaring crude oil prices.  In particular the rails have been the standouts within the transports.  Those in the know suggest the  reason the rails are doing well in the face of rising crude is because business is booming as the rails are benefit from moving all the coal across the country that is being so aggressively mined.  Below we have attached a table of some select rails with their respective FusionIQ Master Technical Scores. The high scores suggest the rails still offer attractive potential here.

As seen in the attached chart below HAS has now broken out to all new highs on very bullish volume and institutional sponsorship.  The objective point and figure target for HAS is $ 62.00 and offers good return potential to investors should it bear accurate.

In this weekends Barron's the magazine cites Kimberly Clark Corp. (KMB) the maker of bathroom tissue and baby diapers as Ready to Clean Up. It cites the stock as cheap according to Chuck Bath, a portfolio manager at Diamond Hill Capital Management in Columbus, Ohio.  Bath cites KMB's forward earnings multiple as cheap as it gets and goes on to say it is significantly cheaper than other consumer-products companies like Procter & Gamble (PG), which fetches a multiple of 19 times 2008 estimates.

However with soaring commodities costs, particularly for pulp and oil, KMB shares remain under pressure.  With a its low FusionIQ score (34) we are not saying Barron's is wrong but we would suggest its score is low for a reason.  So regardless of the so called bullish factors lining up the KMB's low score suggests no one in the institutional community believes the shares are ripe for a turnaround just yet.

Metallico Inc (MEA) is a recycler that is enjoying rising margins and pricing power as scrap is in demand in the U.S. and overseas, mainly India and the Middle East.  Scrap metal recycling remains robust, mainly because of strong demand from steel mills.  In fact just yesterday MEA scored a new FusionIQ timing BUY signal.  While short-term shares may be extended and in need of a pullback its point and figure target of $ 23.50 (coupled with its FusionIQ master rank of 80 and 89 technical score) suggests that pullbacks will offer investors a good entry from a risk / reward basis.

Sohu.com Inc. an Internet portal in China recently broke out on close to 2x its 21 day average volume.  With a fairly large base and almost 23.00 % of its float short SOHU shares look like they can continue to power high as a liquidity squeeze takes place.  Usage is up at its portal and the company is also benefiting from the pending Chinese Olympics.  The point and figure target for SOHU shares is $ 67.00.  Given the large price spike recently we would think some minor consolidation may occur so buying shares on pullbacks on an average cost basis makes the most sense.

Given the back drop of a very strong quarter and a FusionIQ master score of 85 and a FusionIQ technical score of 95 IBM certainly warrants a strong look here as a potential investment.

Netflix Inc. (NFLX) scored a timely FusionIQ BUY signal back in February in the mid 20's and the stock subsequently ran.  Recent activity in shares still looks like a bullish pause or consolidation before shares look to move higher.  With a Fusion IQ Master score of 86 and a FusionIQ technical score of 97 things still appear bullish for NFLX.  As we always say we love stocks that act well when most stocks don't and NFLX has weathered this corrective activity better than the majority of stocks out there.  This conviction on the part of buyers to boost shares in the face of general market weakness is bullish.  Though it sounds absurd the present point and figure target on NFLX is $ 61.00, so assuming there is some validity in this unbiased price projection there is still plenty of upside left for investors that missed the earlier FusionIQ BUY signal.

As we pointed out several months ago, commodity based groups, particularly in the energy sector had been (and still are) the markets only real source of strength.  As the attached table shows this still continues to be the case with only 2 of the top 25 ranked FusionIQ stocks (EDA and DMX) not being a commodity based company or ETF.  Investing is all about themes and the commodity theme is the only theme showing any durable trends at present.  So until this changes expect these names to continue to dominate performance and ranking tables even if they suffer minor pullbacks along the way,

We normally don’t pay attention to analyst upgrades as we tend to view them as lagging indicators.  However we do pay attention when analysts upgrade stocks that have high FusionIQ ranks.  Yesterday two names were upgraded that may bear watching over the coming days/weeks as their FusionIQ scores indicate that the analysts new bullishness may be warranted.

Fad shoemaker Crocs Inc. (CROX) continues to disappoint as the company plunged in premarket trading early Tuesday after the casual footwear company lowered its first-quarter profit forecast.  This warning prompted a downgrade and lowered outlooks from several analysts. Shares of Crocs fell $4.83, or 27.2 percent, to $12.96 in premarket trading.  Crocs slashed its first-quarter outlook, blaming slower sales and expenses related to the closure of its Canadian manufacturing plant.  

As seen in the chart below FusionIQ had numerous short-term timing sell signals including one just several weeks back when shares were trading in the mid $ 20’s.

For more timely FusionIQ timing signals sign up today at https://www.fusioniqrank.com/signup.php

With a host of issues and crude at record highs the airline sector continues to take it on the chin.  While there is the temptation to look at this group as a long term bargain, the industry remains a hard business model to make money in as it is tied to economic cycles, the ebb and flow of oil prices and is still saddled with high cost structures due to large union presence.  That said we would continue to avoid this group even though the temptation maybe to put them away for the long-term.

Major Airline FusionIQ Techical Ranks 

Southwest (LUV) - 39

Delta (DAL) - 32

Continental (CAL) - 30

Northwest (NWA) - 18

Wachovia Corp. (WB) will slash its dividend and raise $7 billion in a share sale after reporting a surprising first-quarter loss on Monday of $393 million.  The first-quarter loss for the Charlotte-based bank works out to 20 cents a share. That compared with profit of $2.3 billion, or $1.20 a share, a year earlier. Excluding merger-related and restructuring charges, the bank lost $270 million, or 14 cents a share. Revenue fell 4.5 percent to $7.89 billion from $8.27 billion last year.  The results, tainted by exposure to credit markets, were worse than analysts anticipated. Analysts surveyed by Thomson Financial had expected Wachovia to earn 40 cents per share on revenue of $7.98 billion. The earnings estimates typically exclude one-time items. The nation's No. 4 bank said it will cut its dividend by 41 percent to 37.5 cents per share from 64 cents per share.

Before you think of going bottom fishing on WB shares note the low FusionIQ master score of 27, which suggests shares are likely to be out of favor for a while, if not continue to move lower.

NASDAQ FOUR HORSEMAN REVISITED - GOOG, BIDU and AAPL are weak, while RIMM bucks the trend

Back in February we highlighted NASDAQ's new four horseman; GOOG, BIDU, AAPL and RIMM.  We suggested that the former three were is big trouble as they were low ranked in FusionIQ and also were on FusionIQ timing Sell signals.  Subsequently these issues all fell really hard.  At the time only RIMM was bullish in FusionIQ and the stock has performed quit admirably during the current market weakness.  As we revisit these names now we see that FusionIQ was very accurate in its then implied prediction.  As it presently stands GOOG, BIDU and AAPL would remain avoids and if we were betting on a horse it would have to be RIMM and its FusionIQ master technical score of 94.

International Coal Group, Inc. (ICO), a coal miner in the northern and central Appalachia and the Illinois basin which we featured to subscribers last week in our Chart of the Week, scored a high volume short squeeze surge breakout again on Friday in the face of a weak tape.  Stocks trade up in poor tapes always attract us as it is on these days it would be very easy for buyers to step away.  With almost 22.00 % of the float short ICO has a big liquidity catalyst to propel shares higher and the coal sector has been red hot of late. The point and figure target for ICO shares is $ 9.25 giving investors a nice percentage return if the target is reached from present levels.

Nike Inc. (NKE), the world's largest athletic-shoe maker, rose the most in almost eight years in New York trading recently on the heels of higher international sales helping third-quarter profit exceed analysts' estimates.  Led by sales in China which surged more than 50 percent as consumers bought shoes and clothing ahead of this summer's Olympic Game.   Additionally, CEO Mark Parker shed the Bauer hockey unit and bought Umbro Plc, a maker of soccer attire, as the focused the company on six areas and lured customers with Mercurial Vapor cleats and Air Max running shoes.

Net income surged 32 percent to $463.8 million, or 92 cents a share. Revenue rose 16 percent to $4.54 billion, ahead of the $4.35 billion estimated by analysts.  

With a FusionIQ master technical score of 93 and a FusionIQ overall score of 83 (out of a possible 100) and a bullish pennant consolidation pattern, NKE shares still look rock solid here.  The current point and figure target for NKE shares is $ 83.00 – so it looks like there is still plenty of upside left for those who have not participated in the recent move.

As retailers reported sales results on Thursday, Wal-Mart Stores Inc (WMT) and Costco Wholesale Corp. (COST) were among the few winners, as shoppers stuck to basic goods. Wal-Mart raised its earnings outlook, noting that better inventory control helped to limit markdowns on merchandise. It also said that April sales should top previous expectations.  But March proved to be weak for most others, including J.C. Penney Co. (JCP), Gap Inc. (GPS), and Limited Brands Inc. (LTD).  All of them reported sharp drops in sales. Record gas prices, rising food costs, a weaker job market, slumping home prices and an early, frigid Easter were cited as the culprits. 

Below we list the FusionIQ master technical scores for the aforementioned retailers.

The Good

Wal-Mart Stores Inc. (WMT) - FusionIQ Technical Score - 91

Costco Wholesale Corp. (COST) - FusionIQ Technical Score - 86

The Bad

Gap Stores Inc. (GPS) - FusionIQ Technical Score - 63

The Ugly

Limited Brands Inc. (LTD) - FusionIQ Technical Score - 31

JC Penney Company Inc. (JCP) - FusionIQ Technical Score - 16

One of the reasons the markets have been struggling to get their footing of late is the sharp run up in crude oil.  As the attached chart below shows crude oil is now more expensive on an inflation adjusted basis than it was in the 1970's when lines at the gas pump where stretching for miles.  This is clearly a drag on the market and the economy as crude oil is pervasive in regards to the variety of economic sectors it affects.

With crude prices surging the FusionIQ Airline Group still remains under pressure as seen in the chart below.  With an average FusionIQ score for the group of only 31 (out of a possible 100) this group still remains one of the weaker groups within FusionIQ and should continue to be a large underweight status in any portfolio.  To further emphasize their current weak state 25 of the 27 airlines within the group currently have either neutral or sell FusionIQ timing signals.

The Oil and Gas drilling group is at new highs after consolidating for much of 2006 and is one of the top rated groups in FusionIQ.  As seen in the attached table almost all the issues within the group have high FusionIQ scores with the exception of PKD.  This is clearly one of the markets new leadership areas and investors should look to increase exposure to this group.

Symbol	Group	Tech
PDC	PIONEER DRILLING COMPANY	100
PDE	PRIDE INTERNATIONAL INC	100
RDC	ROWAN COMPANIES INC	100
HP	HELMERICH & PAYNE	100
ESV	ENSCO INTERNATIONAL INC	100
ATW	ATWOOD OCEANICS INC	100
ATLS	ATLAS AMERICA INC	100
DO	DIAMOND OFFSHORE	98
NBR	Nabors Industries Ltd	96
NE	Noble Corp	96
RIG	Transocean Inc	96
BRNC	Bronco Drilling Co Inc	88
PTEN	PATTERSON-UTI ENERGY INC	88
GW	GREY WOLF INC	81
PDS	Precision Drilling Trust	75
PKD	PARKER DRILLING CO	45

Grupo Simec, S.A. de C.V. (SIM) a steel producer (FusionIQ technical score 85) broke out on almost 2.5 x its 21-day average volume on Friday. Additionally it scored a FusionIQ new timing BUY signal on Thursday.  With good group momentum and a point and figure target of $ 18.50 SIM shares offer good reward potential.  Average costing into shares off the open and on pullbacks towards the $ 12.20 - $ 12.10 area looks to be a good trading strategy.

In this weekends Barron's the magazine talks about Ford (F) as a possible double in price from its current levels citing that the company has billions in excess liquidity; a new-model rollout is approaching in addition to management selling secondary assets.  While this all sounds great Ford (F) as seen in the chart below Ford (F) shares only recently made a new 52 week low and it still only has a 42 ranking on its' FusionIQ Master Score.  Now this does not mean that Barron's is wrong and FusionIQ is correct, however its low FusionIQ rating suggests that investors by and large don't have much confidence in the turnaround either yet.  The reason for investor apathy may be the latter points which Barron's suggests in its article; consumers are pinched, economic data is weak and car sales are down. 

Although we have to like any company that has a product line named Fusion - we think its premature to call Ford a double yet.  Our advice set an alert in FusionIQ to let you know Ford (F) shares are back in bullish category (ie.  a master score above 70).

There has been a lot of banter among institutional investors lately about the homebuilders potentially bottoming.  While this may be the case based on the massive amounts or short interest and improvement of news flow it may not align with the longer-term macro issues facing the builders.  However it does not mean there can’t be a strong rally given the temporary reprieve of bad news flow and the aggressive short interest.  That said we examine RYL in this blog post with some technical work. 

As seen presently RYL is testing a down trend line in tact since the 2005 peaks. 

We remain technically Neutral on RYL shares pending the breakout of this downtrend, though we do recognize the chart set up as potentially bullish (waiting confirmation of the trend line break).

For a more detailed report please go to www.fusioniqrank.com and sign up today !!