More Breakouts
The market goes down, the breakouts
hold up. The market goes up, the base builders break out.
Ryland
(
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PowerRating), on our base-building radar Thursday, broke out Friday from a 13-week
cup-with-handle base on triple average volume. Note the proper downward drift of
the handle on light volume and tightening price bars prior to the breakout. The
relative strength line confirmed price by moving into new high ground. Classic.
Serologicals
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PowerRating) sprang out of a 13-week cup-with-high-handle on triple normal
volume. Again, the handle put in a downward drifting handle on volatility and
volume contractions. That handle profile indicates final but not-overwhelming
selling by weak holders, a constructive development as it gets those sellers out
of the way by the time big demand comes to market. Small market supply relative to big market demand equals price expansion.
One
of our earlier breakouts, Loews
(
LTR |
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PowerRating), vaulted higher on nearly four times
its usual trade.
Those
of you who took a deep breath and didn’t let Pharmaceutical Development Products
(
PPD |
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PowerRating) shake you out must be happy. The stock has snapped back nicely the
past two days. To reel in a big winner, you’ve got to hold the line unless the
stock hits your stop.
