It’s All Relative
Leaders outperform their peers in terms of earnings performance as well as price performance. Add to that combo the ability
to beat Wall Street estimates and a healthy chart pattern, and you could be onto
something.
First Data
(
FDC |
Quote |
Chart |
News |
PowerRating), a provider of
electronic networks used for most credit card purchases in the U.S., reported
earnings of 47 cents per share for the first quarter vs. 39 cents a year ago.
That’s a 20.5% increase. A bit below the 25% that I’d like to see in a healthy
economy. But as Gary Kaltbaum will point out in our all-day trading workshops in Atlanta, Dallas and Phoenix, we’re in a time of slowing earnings growth. So by my book, the relative
fundamental performance at First Data is decent. The results came in a penny ahead of First
Call’s consensus estimate. The stock gained 3.8% Thursday on above-average
volume.
The talking heads are getting a little
ahead of themselves, noting the four-day rise in the Nasdaq and asking whether
this market could “run away” from here. Has anyone heard of overhead
resistance?
If you trade high momentum growth
stocks, remember that precious few stocks are setting up in sound bases. I also
keep an eye on the relative performance of growth vs. value. While growth has
fought value to a draw in recent sessions, the major trend still favors the
value segment as the following chart shows. Caution and a large amount cash
remain my bywords here.
All stocks, of course, are risky. On
any new trade, be sure to limit your position size and set a protective price
stop where you will sell your buy or cover your short to protect yourself
against severe losses. For an introduction to combining price stops with
position sizing, see my lesson,
Risky Business.
Gary Kaltbaum on
TradingMarketsWorld! Gary
Kaltbaum will be appearing on the Intermediate-Term Trading board Thursday,
April 19 at 8:00 ET. Be sure to take this opportunity to chat with and have your
questions answered by a leading intermediate-term trader. Click
here to take your trading to a new dimension.
Talk
about it at TradingMarkets World
Gary
Kaltbaum on TradingMarketsWorld! Gary Kaltbaum will be appearing on the
Intermediate-Term Trading board Thursday, April 19 at 8:00 ET. Be sure to take
this opportunity to chat with and have your questions answered by a leading
intermediate-term trader. Click
here to take your trading to a new dimension.