What’s Working — And What’s Not
I left the US
on Friday for a quick ski trip to
the Canadian Rockies, only to arrive back Monday evening and find that very
little had changed with the market. The indices posted a nice rally yesterday,
but lacked the volume to back it up.
I am still waiting for a 2% rally in
one of the indices on heavier volume than the previous day. This evidence of
institutional commitment would lead us to a safer environment in which to stalk
new purchases. Another point I wish to advise watching after today’s trading
is in the market’s action. I notice that the indices are all down on the day
with volume coming in much heavier than yesterday at 11:00 am EST. After the
closing bell, we’ll have to see if the market is strong enough to rebound from
a day of distribution.
When I shift my attention to possible
candidates for purchase if the market is able to confirm the latest rally
attempt, I do not see very many opportunities. On a positive note, the few
stocks that have broken out recently appear to be putting in a good showing. Flir
Systems
(
FLIR |
Quote |
Chart |
News |
PowerRating) moved through its pivot of 50.11 on 2/20 and has
since pushed higher to a 10% gain-to-date. Of course the stock lacks a few of
the fundamental traits I’d normally like in my own purchases, it is still
worth watching stocks like FLIR that are working and what is not.
MDC Holdings
(
MDC |
Quote |
Chart |
News |
PowerRating)
is attempting a breakout of its seven-month base as I write this column. The
stock’s obvious strength is in the industry group it is a part of:
Building-Residential/Commercial. Other than a nice-looking chart, the company
lacks a few of the fundamental traits I would usually require in a new purchase.
For example, quarterly earnings have been a little slow over the past two
quarters. But just as with FLIR, it is always useful to note what is working and
what is not.
The last stock that actually has me
very impressed is NVR
(
NVR |
Quote |
Chart |
News |
PowerRating). This stock
has continued to lead the homebuilding group to new heights. Following a bout of
distribution around 250, the stock has managed to push past 275 and on to almost
a 100-point gain from the breakout through 183!
If things are able to recover today
and eventually prove strong, I will be back with some stocks that I am keeping
an eye on. In the meanwhile, it will be most important to follow the overall
accumulation and distribution of the major indices.
Until Thursday,