Intermediate-Term Report
With the Nasdaq
finally leading, finishing up 1.95% and recent growth stock breakouts like
Engineered Support Systems holding strongly above their pivots, the environment
this past week did become a bit ‘EASIer.’
However, with two highly anticipated reports due out this week, and other signs
of caution still looming–this cautious bull says to remember those great words,
‘a good defense is your best offense.’
The Nasdaq Composite and the Nasdaq
100 look to be clearing key resistance after lagging the S&P500 and DJ-30’s own
failed breakout attempts–as both those indices are now back inside their
trading ranges. Growth stocks in general have also shaped up during the last
five to ten day period. As far as those that have triggered, many have moved up
to make half-way decent gains–that’s the good news. As far as bad news goes, or
news that at least should keep cautious bulls on their toes, instead of
hooves–the 20% benchmark that many traders often look for in determining the
actual health of the intermediate-term climate has still not been found in any
of our recent breakouts. Secondly, scanning my own database of stocks, it’s
still a chore to find many leading growth stocks that are ready to breakout and
lead the market higher, that is, should the market make an actual attempt to do
so in the coming week. Lastly, the volatility levels which are just off their
YTD lows are a very real concern. As the market has refused to move lower off
its May lows, more and more analysts have been justifying and accounting for
this phenomena–this cautious bull doesn’t it. As such, words of caution are
still the gospel around these parts. To rehash from last week, ‘for those stocks
that do look worthy of an initial entry, the philosophy of trading ‘light and
tight’ and taking quick, partial profits on a piece of any profitable trades is
still viewed as the most realistic way to trade breakouts for the time being.’
It is our own personal risk
tolerance levels within the market waves that ultimately dictate how well we
fare during both the great investing climates, as well as those that will be
considered less-than-perfect ‘sailing conditions. When the breakouts stop
triggering consistently–it’s time to focus your energies on existing positions.
Bottom line–as technicians, we know where we like to make adjustments, either
adding to, or decreasing our portfolio, but it doesn’t mean that the decision is
the same for every trader. While the markets are sailing high, we realize that
between the peaks, troughs do exist, and it’s always in our best interest to
stay prepared for whatever comes our way.
Swing Trade Setups: Potential
position plays that are expected to last 2 to 7 trading days, using key
technical levels for entry. These stocks do not necessarily meet all of our
stringent Intermediate Term requirements, but are demonstrating many of the same
strong criteria. Due diligence on the individual traders part is an absolute
requirement!!! Proper money management rules are emphasized in scaling out of
profitable positions, as is, the setting of prudent stop losses, on the
establishment of any positions taken. The list is not maintained on a weekly
basis as trades are considered, at time of entry, short term in nature.
| Company Name |
Symbol | 3- Month RS |
ADX/DMI |
Price | Pivot +.10 |
Technical Perspective |
| St.Judes Medical | ( STJ | Quote | Chart | News | PowerRating) |
53 | 7/down | 75 | 79 – 79.13 | 3-Month double top base w/handle |
| Valueclick | ( VCLK | Quote | Chart | News | PowerRating) |
87 | 13/up | 11.80 | 12.85 | 4-Month lateral base |
| Thor Industries | ( THO | Quote | Chart | News | PowerRating) |
93 | 14/up | 31.24 | 32.34 | 3.5 Month W pattern w/handle |
| William Lyon Homes | ( WLS | Quote | Chart | News | PowerRating) |
56 | 7/up | 92.50 | 93.85 | 3.5 Month lateral base |
| Lca-vision | ( LCAV | Quote | Chart | News | PowerRating) |
92 | 21/up | 28.98 | 30.05 | 2-Month cup and handle |
| Findwhat.com | ( FWHT | Quote | Chart | News | PowerRating) |
77 | 11/up | 22.83 | 23.81 | 2-Month W pattern w/ midpoint trigger |
| Altiris | ( ATRS | Quote | Chart | News | PowerRating) |
86 | 20/up | 28.34 | 30 | 4.5-month W Reversal bottom w/ midpoint trigger |
| Doral Financial | ( DRL | Quote | Chart | News | PowerRating) |
59 | 11/up | 34.65 | 35.78 | 11-Month Ascending Triangle |
| Electronics For Imaging | ( EFII | Quote | Chart | News | PowerRating) |
70 | 16/down | 27.72 | 28.10 or 28.91 | 5-Month cup and handle |
^next^
IT Watch List Action:
As always, the search goes on for top stocks meeting our fundamental and
technical criteria, but issues may still show ‘flaws.’ The most common ‘flaw’
being ROE, according to strict IBD-style investing . Always do your own
homework before entering a trade .Stocks forming bases or handles are monitored, and put on
our watchlist, and then moved to our position list of recent breakouts, on price
triggers above resistance pivots.
Stocks Forming Handle Or Basing Patterns
| Company Name |
Symbol | 12 Month RS |
Price | Technical condition |
Average Volume in 000’s |
Pivot |
| Omnicare | ( OCR | Quote | Chart | News | PowerRating) |
59 | 42.50 | 4-Month cup w/10% handle | 770 | 44.10 |
| Multimedia Games | ( MGAM | Quote | Chart | News | PowerRating) |
85 | 25.80 | 3.5-Month Cup & Handle | 852 | 27.34 |
| Gilead Sciences | ( GILD | Quote | Chart | News | PowerRating) |
68 | 64.95 | 11-Month W base w/ handle | 2,809 | 67.90 |
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Recent Breakouts
We monitor the action of Recent Breakouts as an
indicator of the market health for IT traders. When breakouts are acting well,
this is a good sign for the likelihood of further sustainable breakouts. When
breakouts are failing, IT traders should be even more cautious. Due to
additional ‘fresh’ candidates making the grade–stocks on the breakout list will
be dropped after six months or a pullback of greater than 25% from highs.
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| Company Name |
Symbol | 12 Month RS |
Price | Average Volume-50 Day in 000’s |
Pivot | 52-Week High |
| Zebra Technologies | ( ZBRA | Quote | Chart | News | PowerRating) |
89 | 85.35 | 352 | 56.18 | 85.35 |
| St. Jude Medical | ( STJ | Quote | Chart | News | PowerRating) |
74 | 75 | 1,264 | 58.89 | 79.03 |
| Whole Foods Market | ( WFMI | Quote | Chart | News | PowerRating) |
91 | 93.43 | 794 | 56.34 | 93.43 |
| Guitar Center | ( GTRC | Quote | Chart | News | PowerRating) |
87 | 45.95 | 461 | 37 – 37.20 | 47.42 |
| Engineered Support Systems | ( EASI | Quote | Chart | News | PowerRating) |
88 | 58.71 | 352 | 55.07 – 55.59 | 61.93 |
| Chicos FAS | ( CHS | Quote | Chart | News | PowerRating) |
86 | 45.66 | 1,037 | 45.32 | 47.60 |
| Cognos | ( COGN | Quote | Chart | News | PowerRating) |
68 | 35.28 | 914 | 35.39 | 36.17 |
Breakouts that may
require extra diligence. Those issues that are near pivot entries or 15%
or more, from established highs.
This list accounts for those issues that have performed strongly, but may
require position management due to deteriorating technical condition before
pivot price is reached. If an issue pull backs 36% or more from highs, the stock
will be removed from our lT lists, so we can make room for more compelling trade
candidates.
| Company Name |
Symbol | 12 Month RS |
Price | Average Volume-50 Day |
Pivot | 52-Week High |
| NA | NA | NA | NA | NA | NA | NA |