This Week’s Intermediate-Term Report
Personally
speaking nothing much has changed in my eyes, but that didn’t stop the ETFs and
their cash brethren from establishing further gains on the week. On
the week, the major indices as represented by the S&P500 and Nasdaq Composite
rose a modest .25%, to a more robust 2% increase. This action also established
yet again, fresh 52-week highs within the market’s ‘confirmed rally.’
My opinion isn’t going to keep the
averages from proceeding wherever it is that they want to go, on any given day,
or any given week for that matter. The important thing to remember is to keep
the opinion in check, and trade ‘what is.’ As you might know, after raising the
horns full tilt two weeks ago off key price supports, last week I stressed
caution, making sure one’s horns were more pointed towards terra firma than for
the stars above. In hindsight I have no regrets for my approach to the past
week. It seemed to serve myself, as well as many of our members at TM quite
well. Although the indices did gain ground, it was, and has increasingly become
much more difficult to find the high-probability trade when it comes to growth
stock breakouts. There were quite a few trades to be taken, but most of these
gains were for the nimble, and those that were played were quite often done off
the intraday charts–rather than the ideal daily or weekly breakout triggers.
With higher highs, volatility levels
still at historically ‘cheap’ levels, and the media ‘beating the drums’ for ‘MOOORe’
upside–I’m still looking at the same approach to trade come Monday. The
environment is still conducive to our style of growth stock trading, and you
should still stay prepared to trade the solid setups that appear–but stay
vigilant as we are seeing more growth issues do more than the usual ‘corrective
action’ that typifies a broad based healthy market. This might just be a case of
a few rotten apples at this time, but it is a fact that triggers this week were
considerably less kind than in weeks past. As growth stock traders, we
anticipate that our triggers out of the leading stocks should be something more
than ‘just a daytrade’ or scalp. If you do see the edge setting up before you,
by all means take it, but the caution flag continues to be raised. If an
available and proper trigger is there for the taking, I would suggest to do it
in a ‘lighter and tighter’ style of trade, as the chances for breakdowns
increase after the market’s latest top in our otherwise confirmed rally.
Accumulation and distribution statistics for the last three weeks, as well as
price in our major indices don’t suggest my approach, but caution and proper
money management has served us well thus far, so why stop now–in my opinion
there’s no better way to celebrate a benchmark like Nasdaq 2000.
Within our own list of potential and
ongoing prospects there was one casualty. American Healthways (AMHC),
already on the ‘due diligence’ list, did in the end require just that. An
official stop loss of 7% thru the price trigger was elected, although outside of
the halls of IBD, one might have taken the hint, a little bit sooner. Three
other issues from our handle and basing lists also hit their respective triggers
out of classic breakout patterns. All three have already been put on our ‘due
diligence’ list as the action has been less than remarkable. Two of the three
issues didn’t even make the ‘above average’ volume benchmark for breakouts to
signal a proper trigger. That in of itself is another sign of a
less-than-perfect environment, but for posterity’s sake, we’ll continue to keep
as real as the market is human. On that note, let’s continue to prepare as best as possible for
more quality triggers, but also make sure that our ongoing positions are managed
properly. That way we can keep that which is ours while we continue to wait for
the next high-probability move within the market’s, otherwise ‘confirmed rally.’
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 within the
‘confirmed rally.’ With the most recent voyage back to the crest of the wave,
I’m personally showing less provisions than at the most recent leg of our recent
journey up. For myself, that means that although there still might be a little
bit of good sailing, it’s probably time to concern oneself with battening down
the hatches with proper money management as we look to enter yet another ebb
within the market’s perfect storm.
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 |
| Alliance Data | ( ADS | Quote | Chart | News | PowerRating) |
57 | 27.80 | 29.84 | 17-Week lateral base |
| Hyperion Solutions | ( HYSL | Quote | Chart | News | PowerRating) |
48 | 34.34 | 35.60 | 17-week symmetrical triangle |
| Tuesday Morning | ( TUES | Quote | Chart | News | PowerRating) |
69 | 31.76 | 32.80 or 33.81 | 10-Week cup and handle w/double pivot entry |
| Tierone | ( TONE | Quote | Chart | News | PowerRating) |
59 | 23.80 | 24.01 to 24.35 | 3.5 month cup and handle |
| Uti Worldwide | ( UTIW | Quote | Chart | News | PowerRating) |
60 | 37.13 | 38.10 to 38.50 | 10-week cup and handle |
| Shuffle Master | ( SHFL | Quote | Chart | News | PowerRating) |
66 | 31.33 | 31.75 or 32.91 | 12-week cup and handle w/ handle and 52-week cup triggers |
| Quest Diagnostics | ( DGX | Quote | Chart | News | PowerRating) |
33 | 66.35 | 69.10 to 69.35 | 4-month cup and handle |
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 |
| Sharper Image | ( SHRP | Quote | Chart | News | PowerRating) |
70 | 29.70 | 22-Week High Level base | 297 | 31.25 |
| Axcan Pharma | ( AXCA | Quote | Chart | News | PowerRating) |
28 | 13.29 | 5-Month high level base | 207 | 14.86 |
| Gevity Hr Inc | ( GVHR | Quote | Chart | News | PowerRating) |
92 | 17.53 | 3-Month lateral base | 355 | 20.05 |
| Teva Pharmaceuticals | ( TEVA | Quote | Chart | News | PowerRating) |
54 | 57.09 | 4-Month lateral base | 2,088 | 61.66 |
| Bradley Pharmaceuticals | ( BDY | Quote | Chart | News | PowerRating) |
87 | 29.80 | 7-Week high level base | 418 | 32.60 |
| Aaipharma Inc | ( AAII | Quote | Chart | News | PowerRating) |
72 | 18.93 | 15-Week High level Consolidation | 557 | 20.15 |
*Axcan Pharmaceutical
ROE at 8% is lower than typical 15% to 17% threshold that many IT investors
accept.
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 |
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) |
46 | 63.37 | 2,000 | 46.89
|
69.42 |
| Career Education |
( CECO | Quote | Chart | News | PowerRating) |
85 | 54.13 | 1,400 | 27.20 | 56.20 |
| Coach Inc. |
( COH | Quote | Chart | News | PowerRating) |
84 | 36.46 | 1,641 | 14.18 | 37.39 |
| Boston Scientific |
( BSX | Quote | Chart | News | PowerRating) |
67 | 34.55 | 8,107 | 23.83 | 36.01 |
| International Game Technology |
( IGT | Quote | Chart | News | PowerRating) |
75 | 33.43 | 2,500 | 18.71 | 34.75 |
| UCBH Holdings |
( UCBH | Quote | Chart | News | PowerRating) |
72 | 37.14 | 250 | 22.60 | 37.62 |
| Corinthian Colleges |
( COCO | Quote | Chart | News | PowerRating) |
67 | 62.95 | 873 | 43.09 | 65 |
| Nextel | ( NXTL | Quote | Chart | News | PowerRating) |
80 | 24.10 | 18,187 | 15.85 | 24.60 |
| Gtech Holdings |
( GTK | Quote | Chart | News | PowerRating) |
75 | 47.46 | 580 | 37.05 or 40.80 |
48.22 |
| Centex | ( CTX | Quote | Chart | News | PowerRating) |
78 | 97.18 | 1,215 | 59.80 & 79.52 |
101.11 |
| Countrywide Financial | ( CFC | Quote | Chart | News | PowerRating) |
80 | 102 | 2,500 | 78..84 | 108 |
| Whole Foods Market | ( WFMI | Quote | Chart | News | PowerRating) |
46 | 60 | 560 | 56.34 | 61.46 |
| Marvel Enterprises | ( MVL | Quote | Chart | News | PowerRating) |
92 | 30.35 | 972 | 26.05 | 31.95 |
| Sharper Image | ( SHRP | Quote | Chart | News | PowerRating) |
70 | 29.70 | 297 | 27.85 | 31.15 |
| Dollar General | ( DG | Quote | Chart | News | PowerRating) |
72 | 22.09 | 1,747 | 21.87 | 23.40 |
| Garmin | ( GRMN | Quote | Chart | News | PowerRating) |
76 | 51.20 | 472 | 46.85 | 54.08 |
| Zebra Technologies | ( ZBRA | Quote | Chart | News | PowerRating) |
65 | 59.82 | 403 | 56.18 | 60.77 |
| Invitrogen | ( IVGN | Quote | Chart | News | PowerRating) |
84 | 64.91 | 1,017 | 63.15 | 66.18 |
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 |
| Aeropostale | ( ARO | Quote | Chart | News | PowerRating) |
85 | 31.40 | 895 | 30.52 | 34.70 |
| Flagstar Bancorp | ( FBC | Quote | Chart | News | PowerRating) |
81 | 23.70 | 499 | 23.70 | 26.45 |
| St.Jude Medical | ( STJ | Quote | Chart | News | PowerRating) |
49 | 57.50 | 1,694 | 58.89 | 63.60 |
| Constellation Brands | ( STZ | Quote | Chart | News | PowerRating) |
45 | 31.43 | 2,500 | 31.90 to 32.10 | 32.23 |