Here’s Monday’s Names…
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The markets
were fairly volatile in the session as it was option’s expiration
Friday, however later in the day the broader markets did a nice 180 to close
higher for the week. The Nasdaq Composite closed higher 1.1% with the help of
the semiconductors,
and the Dow Jones Industrials
got help from Coca-Cola (KO)
after it was upgraded by UBS Warburg to a Buy from a Hold.
Yesterday we got a scare with Taro
Pharmaceuticals (TARO)
as it experienced a distribution day. In today’s session it found support at its
50–day
moving average and did an about face to close higher. As intermediate–term
traders it is important that we monitor the price action of stocks (which meet
all of our criteria) around the 50–day
average. The 50–day
moving average is monitored by many if not all money managers and institutions.
Why? Well it acts as a key support/resistance level for the price action of
stocks. For example if TARO were to have closed below the 50–day
average we would have to see it it would hold support at the bottom of its base
and thus cause us to reevaluate the company as a potential trade. We will
continue to monitor TARO’s price action in the coming days. Â
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Stocks Breaking
out on High Volume with a Relative Strength of 80 or Better:
| Company Name |
Symbol | Relative Strength |
Price | Average Volume |
Today’s Volume |
| NONE |
Stocks Building
A Base With A Minimum Relative Strength of 80.
| Company Name |
Symbol | Relative Strength |
Price | Average Volume |
Today’s Volume |
| Krispy Kreme Doughnuts |
(KKD) | 93 | 37.50 | 901,800 | 527,700 |
| King Pharmaceuticals |
(KG) | 84 | 42.60 | 1,398,600 | 943,600 |
| Concord EFT |
(CEFT) | 86 | 27.39 | 5,791,000 | 2,603,900 |
Stocks forming a
Handle
| Company Name |
Symbol | Relative Strength |
Price | Average Volume |
Today’s Volume |
| Pharmaceutical Resources |
(PRX) | 99 | 37.48 | 578,300 | 302,000 |
| Taro Pharmaceutical |
(TARO) | 98 | 41.50 | 712,100 | 868,500 |
Looking at the leading sectors for the
session, the Oil Services Index ($OSX.X)
closed 2.8% higher.
The Biotechnology Index ($BTK.X)
tacked on 2.3%.
And the Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)
gained 1.4%.
Losing ground was the Gold and Silver
Index ($XAU.X)
which fell 2.4%.
The Transportation Index ($TRX.X)
slid 1.5%.
And the GSTI Internet Index ($GIN.X)
closed off 1.4%.
Remember that all securities are
risky. In any trade, you should always reduce your risk by adjusting position
size and placing open protective stops where you will sell your long or
cover your short in case the market turns against you. For an introduction to
combining price stops with position sizing, see our lesson, Risky
Business.