Rally By Association
Computer Associates
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PowerRating) is now poised to more aggressively make headway
into the gap left six months ago after it warned that sales, especially from
mainframe purchasers in Europe, would slow.
The software maker has just
recaptured its 200-day moving average and is moving out of a handle of a cup-and-handle formation, up 1.29 at 35.28. Although volume is not confirming this
breakout into the July 5 window, a critical mass of gaps, thrusts and laps are
helping define this stock as a run away candidate.Â
We recently pointed out how American Eagle
Outfitters
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PowerRating) was forming a mini-cup and handle at its high, also known
as a running cup and handle and was carrying a 3-month
relative strength rank of 94 from TradingMarkets.com’s stock scanner. The
stock went lower to test support at its 20-day moving average and is now
launching off the line in its second wide-ranging day on spiking volume to an
all-time high, up 5 7/8 to 56 11/16. Although this one is stretched beyond the
10% threshold that we feel comfortable pursuing, you may want to keep this one
on your watch list for a subsequent bounce off its 20-day.Â
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