The fabric I used for the experiment was this. Slinky and drapey, and with a substantial one-way stretch (from 10" to 15").
Now, I don't have this cute little plastic case for mine, I bought the foot and cam separately. If you're looking for the same thing, it is the #22 cam (which looks like an inverted #8) and an overedge foot. That's all it is! (This same combo is great for finishing seams with a real overedge stitch that looks almost like serging.)
I used a Schmetz stretch needle and Guttermann 100% polyester thread. And here are the results. This stitched perfectly, no skipped stitches, no puckering, and I can stretch the seam without breaking any stitches.
So there you go! Some more gadgets to find for your Singer Slant-O-Matic!
Now for hemming that stretchy knit. My new best friend is Wonder Tape. You don't want to try to press up or pin up this hem, but of course you want it to stay in place without shifting. So you use this helpful product.
I did NOT have a stretch twin needle, just a universal. Results might be even better with a stretch needle, though. Anyway, between the Wonder Tape and the paper backing, there was no shifting or puckering of the fabric.
PS... yours truly just remembered that the 401 takes two separate needles, so if you don't have a stretch twin needle you can use two stretch needles in there instead. Duh!