Bally Total Fitness (BFT)

Company

"Bally Total Fitness is the largest and only nationwide commercial operator of fitness centers in the U.S., with nearly 390 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness®, Pinnacle Fitness®, Bally Sports Clubs® and Sports Clubs of Canada® brands. Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers." (company website)

Buy

13-Mar-06. Bally has been on a tear for the past several months (see sidebar) and has been drawing back from a new 52-week high in February. It is now oversold (StochRSI). After touching up with the 50-day moving average, it should be poised for further advances.

• Price momentum (PPO) — slowed sharply since new high
• Trend (ADX) — weakened, but stabilizing, although having selling pressure (-DI) above buying pressure (+DI) is a yellow flag
• Money flow (CMF) — slightly negative after a long period of strong positive
• Relative strength (RSI) — a little weak
• Volume — has dropped off since new high

This looks pretty weak, and it is definitely an "early buy" into the oversold condition.

Sell

15-Mar-06. Bally Total Fitness may not be too fit as a company. They announced today that they would miss tomorrow's deadline for last year's annual report. Astonishingly, they chose to announce also that the CEO was being awarded a bonus of $700K, with another $200K to be given when the report is finished. Standard and Poor's has BFT debt on watch. When the stock recovered a bit today I bailed at a small loss. It is never a good sign when a company misses a filing deadline.