A Bevy of Beauties
Did I say that it might
be months before high relative strength stocks set up in valid chart patterns? Well, the market
gave us a nice batch of breakouts Wednesday — not to mention accumulation days in the New York and Nasdaq markets to validate Greenie’s half-point rate cut. In a word, encouraging.
Metro One
Telecommunications
(
MTON |
Quote |
Chart |
News |
PowerRating) jumped 16.8% out of an 11-week base on fast
trade. Pretty as a peach! The provider of directory assistance and information
services for wireless carriers will host a webcast to announce fiscal 2001 first quarter results 5 p.m. ET
Tuesday April 24.
International Game
Technology
(
IGT |
Quote |
Chart |
News |
PowerRating), which flashed on our base-building radar on April
10, gapped out of a six-month base into new high ground. Shares in the manufacturer of computerized casino gaming products and operator of proprietary
gaming systems got a boost from Harrah’s
(
HET |
Quote |
Chart |
News |
PowerRating). The company reported Q1
earnings of 38 cents vs. 25 cents a year ago and a penny ahead of First
Call/Thomson Financial’s consensus estimate. Harrah’s surged into new high
ground.
Wall Street’s discovery of new
darlings in leisure, tech and retail made for rotation out of
healthcare. Tenet Healthcare
(
THC |
Quote |
Chart |
News |
PowerRating), whose base formation had caught my eye
earlier this month, got its hair mussed. Among the retailers, Charlotte Russe
(
CHIC |
Quote |
Chart |
News |
PowerRating)
is misbehaving. Market health is decidedly improving, but never forget that it’s
a stock picker’s market.
If this rally is for real, we’ll see more high RS stocks queue up in sound bases behind Wednesday’s breakouts. So don’t worry about missing out. In a valid intermediate-term rally, more prospects will emerge. Step up your overnight screening, don’t fudge your standards and watch your pivots and stops like a hawk.
If a few get away from you, don’t chase them once they extend more than 3% past their pivots. (You can stretch that rule for price gaps.) If a stock gets away, it gets away. As Greg Kuhn once told me, you can’t kiss all the pretty girls. (Or for you lady traders out there, all the handsome boys!)
CSX
(
CSX |
Quote |
Chart |
News |
PowerRating) had a nice pop, albeit
on mediocre volume. The container group has been acting well.
Hot Topic
(
HOTT |
Quote |
Chart |
News |
PowerRating) is behaving
constructively, although I would like that relative strength line to perk up.
Activision
(
ATVI |
Quote |
Chart |
News |
PowerRating) marched out of a
tight consolidation area.
CBL
(
CBL |
Quote |
Chart |
News |
PowerRating), which made our
base-building radar Tuesday,
broke into new high ground. The RS confirmation wasn’t there, but the volume
came in strong.
Don’t forget that intermediate-term
trader Gary Kaltbaum will be hanging out on the intermediate-term message board
in TradersWorld this Thursday at 8:00 PM ET. To get there, just click the
TradersWorld tab near the top of this page, and you’ll find the link to the
message boards in the middle of the upper half of the page. I encourage you to
check out the I-T board every day. There have been a number of interesting
threads by your fellow I-T traders as well as a good mix of friendly people of
all skill levels.
Remember to limit your risk by using
stops and limiting your allocation in individual stocks. For an introduction to combining price stops
with position sizing, see my lesson,
Risky Business.