This Week’s Intermediate-Term Report
‘Oh
Yahoo!!’…and I mean that quite seriously, although the pun was intended.
The Nasdaq Composite might not be totally out of the
woods as the past week’s activity did have our tech and growth heavy index off
11.9% from its January highs, and the fact that it is still technically in a
downtrend channel off these same levels–but, with a solid ‘rally attempt day’
in Thursday’s session off its triple pivot bottom and individual growth stocks
suddenly turning the proverbial corner within constructive, high-level weekly
bases–this cautious bull is staying very much ready.
While lower prices in our major
index friends were seen during the first part of the week, many growth stock
names were actually demonstrating solid relative strength within their
established bases. This fact coupled with a solid ‘rally attempt’ on
institutional volume in Thursday’s trade has our list of trade candidates
looking as solid as it has in a long while. As mentioned, we are not totally out
of the woods. The bears still remain in control technically, due to the
established downtrend–but, with what O’Neil states is a ‘rally attempt day’ in
place, and our stocks starting to quickly set up near triggers–growth stock
investors should be prepared to trade. If the rally attempt is for real, the
market should say so with conviction this week in the form of a 1% or greater
rally, on heavier volume. This is the Follow-Thru-Day or FTD that many growth
stock investors look for in conjunction with their growth stocks, thereby
establishing a healthy market environment for which to trade in.
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. When the time comes that the indices
are ‘precariously’ testing levels of support once again, as they always do–many
of the stocks we watch, will actually be breaking out to fresh highs, or ready
to, 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.’
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 | 12 Month RS |
Price | Pivot +.10 |
Technical Perspective |
| Amdocs | ( DOX | Quote | Chart | News | PowerRating) |
74 | 27.30 | 29.84 | 2-month lateral base |
| Hovnanian | ( HOV | Quote | Chart | News | PowerRating) |
76 | 86.56 | 92.70 | 4-Month Cup w/ handle entry |
| Bankrate Inc | ( RATE | Quote | Chart | News | PowerRating) |
89 | 16.90 | 19.95 | 6-month Cup b/o |
| Kroll | ( KROL | Quote | Chart | News | PowerRating) |
33 | 25.30 | 27.45 | 2.5-Month high level base |
| Michaels Stores | ( MIK | Quote | Chart | News | PowerRating) |
65 | 47.28 | 49.62 | 4-Month Cup w/handle triggers |
| Amerigroup | ( AGP | Quote | Chart | News | PowerRating) |
42 | 43.55 | 44.28 | 5-Month Cup w/handle triggers |
| UCBH Holdings | ( UCBH | Quote | Chart | News | PowerRating) |
64 | 39.10 | 41.60 | 2-month lateral base |
| Applied Signal | ( APSG | Quote | Chart | News | PowerRating) |
72 | 25.90 | 28.64 | 2-Month lateral base |
| Cognex | ( CGNX | Quote | Chart | News | PowerRating) |
65 | 32.40 | 35.15 | 2-Month lateral base |
| Electronic Arts | ( ERTS | Quote | Chart | News | PowerRating) |
65 | 51.78 | 52.98 | 5-Month high level base |
| Medicines Company | ( MDCO | Quote | Chart | News | PowerRating) |
72 | 31.68 | 33.06 – 33.24 | 2-Month Cup and handle |
| Nii Holdings | ( NIHD | Quote | Chart | News | PowerRating) |
95 | 33.90 | 37.10 | 2-Month high level base |
| National Semiconductor | ( NSM | Quote | Chart | News | PowerRating) |
85 | 42.65 | 45.34 | 4-Month high level base |
| Sylvan Learning | ( SLVN | Quote | Chart | News | PowerRating) |
71 | 31.98 | 32.88 | 4-Month high level base |
| Yahoo | ( YHOO | Quote | Chart | News | PowerRating) |
73 | 47.13 | 50.51 | 2.5 Month high level base |
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 Building A Base
| Company Name |
Symbol | 12 Month RS |
Price | Technical condition |
Average Volume in 000’s |
Pivot |
| Marvell Technology | ( MRVL | Quote | Chart | News | PowerRating) |
70 | 42.67 | 4.5-Month high level lateral base | 2,512 | 46.73 |
| Safenet | ( SFNT | Quote | Chart | News | PowerRating) |
72 | 38.69 | 10-Week lateral High-Level Base | 306 | 41.90 |
| Abaxis | ( ABAX | Quote | Chart | News | PowerRating) |
96 | 19.93 | 9-Week high level base | 364 | 23.55 |
| Celgene | ( CELG | Quote | Chart | News | PowerRating) |
64 | 46.47 | 6-Month lateral base | 1,498 | 48.98 |
| Cal-Maine Foods | ( CALM | Quote | Chart | News | PowerRating) |
40.05 | 40.05 | 3-Month high level base | 513 | 45.70 |
| Stet Hellas Telecom | ( STHLY | Quote | Chart | News | PowerRating) |
86 | 17.49 | 2-Month high level base | 261 | 20.06 |
Stocks Forming A Handle
| Company Name |
Symbol | 12 Month RS |
Price | Technical condition |
Average Volume in 000’s |
Pivot |
| Guitar Center | ( GTRC | Quote | Chart | News | PowerRating) |
60 | 35.30 | 5-Month Cup and handle | 278 | 37-37.20 |
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Recent Breakouts From “Base & Handle”
Lists
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 |
| Centex | ( CTX | Quote | Chart | News | PowerRating) |
80 | 53.77 | 3,200 | 29.90 and 39.76 | 58.40 |
| Countrywide Financial | ( CFC | Quote | Chart | News | PowerRating) |
83 | 92 | 2,666 | 59.16 | 97.30 |
| Whole Foods Market | ( WFMI | Quote | Chart | News | PowerRating) |
65 | 74.50 | 687 | 56.34 | 79.24 |
| Zebra Technologies | ( ZBRA | Quote | Chart | News | PowerRating) |
66 | 69.03 | 348 | 56.18 | 72.84 |
| St. Jude Medical | ( STJ | Quote | Chart | News | PowerRating) |
64 | 71.61 | 1,659 | 58.89 | 79.03 |
| Serologicals | ( SERO | Quote | Chart | News | PowerRating) |
77 | 19.32 | 489 | 19.07/19.39 | 21.17 |
| NII Holdings | ( NIHD | Quote | Chart | News | PowerRating) |
95 | 33.90 | 1,100 | 26.90 | 37 |
| Mobile Telesys | ( MBT | Quote | Chart | News | PowerRating) |
92 | 121.76 | 255 | 87.60 | 123.52 |
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 |