Monday’s Intermediate-Term Report
If you owned some
‘old school’ cyclicals, or either the S&P500 (SPY) or Dow Jones (DIA)
outright–it was a great week as measured by more fresh buy side interest and
fresh 52-Week Highs. But, if you’re a
patient growth stock investor, the week marked more consolidation-type action.
For the most recent five day period the broader S&P500 cash gained 1.25% while
the tech-laden and growth oriented Nasdaq Composite amassed an essential flat
percentage performance on the week. Some might be deterred by the recent lagging
nature of the index–which growth stock investors devote most of their attention
too. But for those that realize that a market needs to digest gains in order to
proceed forth within a ‘confirmed rally’, like the one that’s been in place
since March–I think that the past five days, as well as the past two-months
bodes very well for growth stock triggers in the coming weeks.
It would have been nice if the
Nasdaq complimented the price gains of the other indices with some of its own,
but as the saying goes, ‘good things come to those who wait.’ As it stands, the
Nasdaq has put in a lateral 2.5 month consolidation, leaving the index at the
same levels that it reached two months ago. With volume statistics as measured
by institutional distribution and accumulation coming in at essentially neutral
levels for the latest 15-day period (I use a combination of price and volume to
measure my own count) we are left with a very healthy looking consolidation.
During this same period, many of the growth stocks that led the market from the
March lows are now showing the characteristics of quality, high-level weekly
bases from which breakouts, if triggered–should produce some excellent
high-probability results. My own list has growth considerably during the past
two weeks, and now within the continued healthy market climate, we need to stand
ready to trade, as our triggers are reached.
My technical take coming into Monday
is to ‘take the trade’ if the trigger is elected, and volume is running at a
healthy clip. With the Dow and S&P pushing higher with nary a pause (consider
the fact that the S&P500 has only pulled back a mere 1% during the past 20
sessions), my preference would be for these two indices to see some actual
‘backing and filling’– before and if, our price levels are met within our own
list of growth stocks. I suspect that what my actually happen is that the Nasdaq
will begin its own rally while the corrective action is occurring in these other
two market proxies. I further suspect that while volatility levels might move
higher by 5 to 10%, they will still be considered closer to historic lows than
not. There most likely will be cross currents that the media will be more than
happy to expound upon, if you let them. My attitude is that even if some mixed
signals do indeed exist, we still must be prepared to take our trades. Focus on
price, volume and triggers out of leading, fundamentally sound stocks that are
moving out of technical weekly bases–and nothing else. Keep your rules in
place, and set mind free of the extraneous noise because, if our growth stocks
do trigger, they will be doing so out after many weeks of healthy, consolidation
work–and bottom line, those are the types of bases that lend themselves to
high-probability success in trading growth stocks.
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. While the markets are sailing
high, we also realize that between the peaks, troughs do exist, and it’s always
in our best interest to stay prepared for whatever comes our way. We have to
remember, that when the next round of classic triggers does emerge out of our
leading growth stock candidates–they will be doing just that…leading. While
the indices are ‘precariously’ testing levels of support, many of the
stocks we watch, will actually be breaking out to fresh highs, from solid weekly
basing patterns. All that we can do to take advantage of the high-probability
trade is continue to keep ready, and dare to prepare for the next quality
breakout within the market’s ongoing ‘confirmed rally.’
New Category:
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.
None Today.
| Company Name |
Symbol | 12 Month RS |
Price | Pivot +.10 |
Technical Perspective |
| Yahoo | ( YHOO | Quote | Chart | News | PowerRating) |
80 | 42.11 | 44.87 | 10-Week high level base |
| Secure Computing | ( SCUR | Quote | Chart | News | PowerRating) |
91 | 14.90 | 15.85 | 2-Month lateral base |
| Ati Technologies | ( ATYT | Quote | Chart | News | PowerRating) |
89 | 14.64 | 16.51 to 16.60 | 4-month lateral base |
| Guitar Center | ( GTRC | Quote | Chart | News | PowerRating) |
62 | 32.42 | 33.43 | 8-Week ‘fragmented’ Cup & Handle |
| Ansys | ( ANSS | Quote | Chart | News | PowerRating) |
89 | 40.95 | 41.65 | 4-Month basing pattern–second b/o attempt |
| Netflix | ( NFLX | Quote | Chart | News | PowerRating) |
85 | 51.07 | 52.36 | 2-Month high level basing pattern w/ right side pivot entry |
| Applied Films | ( AFCO | Quote | Chart | News | PowerRating) |
71 | 32.66 | 35.30 | 4-Month Reverse H&S w/ 2year highs and neckline breach as trigger |
Watch List Action:
As always, the search goes on for top stocks meeting our fundamental and
technical criteria. 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 Building A Base
| Company Name |
Symbol | 12 Month RS |
Price | Technical condition |
Average Volume in 000’s |
Pivot |
| Quality Systems | ( QSII | Quote | Chart | News | PowerRating) |
72 | 43.54 | 4-Month Lateral base | 68 | 49.85 |
| Chicago Bridge & Iron | ( CBI | Quote | Chart | News | PowerRating) |
62 | 27.11 | 4.5 Month Lateral base | 166 | 28.60 |
| Altiris | ( ATRS | Quote | Chart | News | PowerRating) |
90 | 33.48 | 8-Week High level lateral base | 329 | 36.15 |
| Knight Trading | ( NITE | Quote | Chart | News | PowerRating) |
91 | 13.58 | 9-Week High Lateral base | 1,577 | 15.35 |
| PetroKazakhstan | ( PKZ | Quote | Chart | News | PowerRating) |
80 | 21.16 | 3-month Lateral Base | 546 | 23.35 |
| Biolase Technology | ( BLTI | Quote | Chart | News | PowerRating) |
83 | 14.45 | 7-Month Lateral base | 888 | 16.13 |
Stocks Forming A Handle
| Company Name |
Symbol | 12 Month RS |
Price | Technical condition |
Average Volume in 000’s |
Pivot |
| NA | NA | NA | NA | NA | NA | NA |
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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.
| Company Name |
Symbol | 12 Month RS |
Price | Average Volume-50 Day in 000’s |
Pivot | 52-Week High |
| Apollo Group |
( APOL | Quote | Chart | News | PowerRating) |
51 | 68.30 | 2,068 | 46.89
|
72.89 |
| Coach Inc. |
( COH | Quote | Chart | News | PowerRating) |
84 | 36.99 | 1,641 | 14.18 | 40.84 |
| Boston Scientific |
( BSX | Quote | Chart | News | PowerRating) |
60 | 35.27 | 5,592 | 23.83 | 36.47 |
| International Game Technology |
( IGT | Quote | Chart | News | PowerRating) |
80 | 36.59 | 2,627 | 18.71 | 37 |
| UCBH Holdings |
( UCBH | Quote | Chart | News | PowerRating) |
80 | 38.82 | 241 | 22.60 | 40.10 |
| Corinthian Colleges |
( COCO | Quote | Chart | News | PowerRating) |
40 | 54.35 | 913 | 43.09 | 66.94 |
| Nextel | ( NXTL | Quote | Chart | News | PowerRating) |
83 | 26 | 15,991 | 15.85 | 26.34 |
| Gtech Holdings |
( GTK | Quote | Chart | News | PowerRating) |
68 | 49.36 | 496 | 37.05 or 40.80 |
51.19 |
| Centex | ( CTX | Quote | Chart | News | PowerRating) |
85 | 110.05 | 1,239 | 59.80 & 79.52 |
113.08 |
| Countrywide Financial | ( CFC | Quote | Chart | News | PowerRating) |
81 | 77.23 | 3,057 | 59.16 | 81.81 |
| Whole Foods Market | ( WFMI | Quote | Chart | News | PowerRating) |
54 | 65.73 | 759 | 56.34 | 66.23 |
| Marvel Enterprises | ( MVL | Quote | Chart | News | PowerRating) |
90 | 29.50 | 1,032 | 26.05 | 31.95 |
| Sharper Image | ( SHRP | Quote | Chart | News | PowerRating) |
69 | 29.50 | 332 | 27.85 | 32.70 |
| Garmin | ( GRMN | Quote | Chart | News | PowerRating) |
74 | 55.02 | 590 | 46.85 | 57.84 |
| Zebra Technologies | ( ZBRA | Quote | Chart | News | PowerRating) |
67 | 62.61 | 522 | 56.18 | 64.43 |
| St. Jude Medical | ( STJ | Quote | Chart | News | PowerRating) |
44 | 60.05 | 1,616 | 58.89 | 64 |
| San Juan Basin | ( SJT | Quote | Chart | News | PowerRating) |
65 | 21.75 | 181 | 19.18 and 20.12 | 21.89 |
| Aaipharma | ( AAII | Quote | Chart | News | PowerRating) |
89 | 24.53 | 527 | 20.15 | 26.41 |
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 |