What Are We Waiting For?
Well we got
one! Yes sir, we sure did!. Oh, sorry about that…"what
did we get?"
you are probably wondering. One of those elusive follow–through
days came in Friday! Now what do we do? Well for one continue to look for those
stocks that are showing the best fundamentals, technical and momentum
characteristics. Quite difficult,
especially since most stocks have been hit hard as of late.
I know that you have seen this in my
commentary and on the site quite a bit, but I am an advocate of confluence of
signals! We got one,
now let’s get confirmation from other indicators such as…breadth! So for now I
am looking for potential turnarounds plays, stocks building bases (as normal)
and of course,
momentum plays.
EPIQ Systems (EPIQ)
looks interesting as it scales up the right side of its 4 month cup. The
developer of financial software has a 5 year growth rate of 58% and earnings
growth over the last 4 quarters of 33%, 140%, 27% and 27%. Sales have grown 53%,
69%, 43% and 23%.
L 3 Communications (LLL)
is forming an ascending symmetrical triangle off of a runaway gap. The company
specializes in secure communication systems and has shown an earnings growth
rate of 31%, 31%,29% and 31%. Sales have been respectable also 35%, 29%, 22% and
22% over the last 4 quarters.
Among the ETFs in the green, the
iShares Australia Index (EWA)
tacked on 5.3%.
The WEBS-Singapore (EWS)
moved higher 4.5%
And the WEBS-Austria (EWO)
closed up 4.0%.
Losing ground, the WEBS-Sweden (EWD)
which fell 4.1%.
The WEBS-Hong Kong (EWH)
slid 3.6%.
And the iShares-Netherlands (EWN)
lost 2.8%.
The Select Sector SPDR Technology fund
(XLK)
is working on its descending symmetrical triangle and still looks vulnerable.
Remember that all securities are
risky. In any trade, you should always reduce your risk by adjusting position
size and placing open protective stops where you will sell your long or
cover your short in case the market turns against you. For an introduction to
combining price stops with position sizing, see Loren’s lesson, Risky
Business.
Greg