Momentum Stocks

STEC @ $11.26 (S T E C Inc.) manufactures custom non-volatile and DRAM drives and memory cards for defense, aerospace, computer and networking markets. Earnings are expected to grow 85% this year and another 81% in 2009 to 0.67 cents a share. We originally recommended this stock on 8/3/06 at $5.95 and sold it for a 113% profit a few months later. We are revisiting the stock here by establishing half a position here and will enter the remaining half on a pull back to $9. Our stop loss will be set at $8, so adjust the size of your trade.

IPO's and New Issues

VIT @ $10.84 (Vance info Tech) is a Chinese provider of outsourced software research and development, maintenance, testing and IT services. Revenues have increased between 96% and 153% during the last four quarters. Earnings have accelerated 50%, 100%, 100% and 167% during the same time frame and are expected to grow 48% this year and another 41% in 2009. They came public in December at $9 and appear to be ready to work there way out of their first base. They are expected to report earnings before the open and we will establish a position at any level below $10. Otherwise, we will establish half a position at these levels and add on a pull back to $9.50. Our stop loss will be set at $8.

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