Stocks 100% above 200 day moving average

From Ask Bill O'Neil

"If a stock is 100% over its 200-day moving average, when would this be considered a valid sell signal?

As a general rule, some stocks may be sold when they are 70% to 100% or more above their 200-day moving average line. In this situation, however, the right time to sell depends a lot on the market environment. If you own a stock that is 100% or more above its 200-day (or even 50-day) moving average, you must ask yourself first and foremost: "Where are we in the bull cycle, and where is the stock within its pattern?" For example, if a stock breaks out of its first-stage base on huge volume and runs like mad for three weeks, then finds itself 150% above its 200-day moving average, this is viewed more as a sign of strength early in the move. Therefore, you would probably want to play this one out. If a stock has broken out of its third or fourth base and is also 150% above its 200-day moving average while the market has been in a bull move for nine months or more, it might be a good idea to consider booking some profits. Such rules should always be employed within the context of where you are in a stock's and the market's move. From late 1999 to March 2000, dozens of leading tech stocks went into climax runs, one of the most reliable topping signals. So selling at that time was the correct move. The current market is a lot different. Hundreds of quality stocks have broken out to new 52-week and all-time highs. But as always, continue to pay attention to the action of both the market and the leading stocks. Be on the lookout for the presence of additional sell signals.

Sometime back IBD had a article saying their studies of past leaders indicate that they tend to top on an average 110% above 200 day MA. So the sell above 100% of 200 day MA is not automatic rule, but when you see lot of stocks in a sector 100% above 200 day MA, most of the time, there is a high probability of correction. Shipping sector in October had this kind of action and also a churn at top of the range. A high volume churn at top of range is another topping signal IBD talks about a lot. So when a stock you are holding is 100% above 200 day MA, you need to move stops quickly to lock in profit and watch for other topping signals.

The best guide to when to sell is on IBD site:

When To Sell Stocks To Take Profits

CALM Earnings

CALM : second-quarter net income jumped to $40.2 million, or $1.69 a share, from $6.4 million, or 27 cents a share, a year earlier. The Jackson, Miss., egg producer said revenue for the quarter ended Dec. 1 rose 62% to $223.7 million from $137.7 million a year earlier, due to strong demand for fresh eggs at the retail and food service levels, as well as for eggs used for liquid, frozen and dried egg products. Shares of Cal-Maine Foods closed down 32 cents at $25.85 on Thursday.

This looks like blowout earnings. But stocks has been rallying for sometime and can go either way. Keep on your radar. This is morning earnings release. Egg prices tend to be volatile and this stock has very high short interest . 37% of float is short. Float is 14 million.

Related post: How to trade earnings

When are stocks vulnerable to correction

Yesterday I said solar energy sector and fertiliser sector stocks are vulnerable to correction at these level. Similarly I had warned about shipping sector before it topped. One of the easiest way to figure out which stock is vulnerable to correction is to look at "Price vs 200 Moving Average" . When the stock is up 100% or more from 200 moving average (which on Telechart sort means value of 200 plus) , it is vulnerable to correction.

IBD studis of top performing stocks show that they top at around 110% from the 200 day MA. From time to time IBD talks about this sell rule.

If you sort the All Stocks list by "Price vs 200 Moving Average" , you will notice most of the stocks with 190 plus readings are solar and fertiliser stocks.

Stocks up 100% plus from 200 day MA

CSIQ,Canadian Solar Inc (Google  Yahoo  Earnings  Chart) 
EMKR,Emcore Corporation (Google  Yahoo  Earnings  Chart) 
FSIN,Fushi Intl Inc (Google  Yahoo  Earnings  Chart) 
FSLR,First Solar Inc (Google  Yahoo  Earnings  Chart) 
JASO,Ja Solar Hldgs Co Ads (Google  Yahoo  Earnings  Chart) 
LUNA,Luna Innovations Inc (Google  Yahoo  Earnings  Chart) 
MOS,Mosaic Company (Google  Yahoo  Earnings  Chart) 
MTL,Mechel Steel Group OAO ADS (Google  Yahoo  Earnings  Chart) 
QSC,Questcor Pharmaceuticals (Google  Yahoo  Earnings  Chart) 
RICK,Rick's Caberet Intl (Google  Yahoo  Earnings  Chart) 
RIGL,Rigel Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
SOLF,Solarfun Power Holdings Co Ltd (Google  Yahoo  Earnings  Chart) 
SPIR,Spire Corp (Google  Yahoo  Earnings  Chart) 
STP,Suntech Power Holdings Co Ltd (Google  Yahoo  Earnings  Chart) 
ZIXI,Zix Corporation (Google  Yahoo  Earnings  Chart) 

Another thing which signals likelihood of correction in a stock is climax move. Moves of 50% plus in a month on a stock which already has been rallying, typically lead to correction in the stock in next small time frame.

Stocks up 50% plus in a month

ARTW,Art's-Way Manufacturing (Google  Yahoo  Earnings  Chart) 
ASTI,Ascent Solar Technologies Inc (Google  Yahoo  Earnings  Chart) 
ASTIZ,Ascent Solar Technologies` Inc. (Google  Yahoo  Earnings  Chart) 
AVR,Aventine Renewable Energy Holdings Inc (Google  Yahoo  Earnings  Chart) 
BMTI,BioMimetic Therapeutics Inc (Google  Yahoo  Earnings  Chart) 
BRKR,Bruker Biosciences Corp (Google  Yahoo  Earnings  Chart) 
CHNR,ChinaNatural Resources (Google  Yahoo  Earnings  Chart) 
CSIQ,Canadian Solar Inc (Google  Yahoo  Earnings  Chart) 
CSUN,China Sunergy Co Ltd (Google  Yahoo  Earnings  Chart) 
CTDC,China Technology Development Group Corp (Google  Yahoo  Earnings  Chart) 
ECHO,Electronic Clearing House (Google  Yahoo  Earnings  Chart) 
EMKR,Emcore Corporation (Google  Yahoo  Earnings  Chart) 
ESLR,Evergreen Solar Inc (Google  Yahoo  Earnings  Chart) 
FSIN,Fushi Intl Inc (Google  Yahoo  Earnings  Chart) 
HES,Hess Corp (Google  Yahoo  Earnings  Chart) 
HOKU,Hoku Scientific Inc (Google  Yahoo  Earnings  Chart) 
HRBN,Harbin Electric Inc. (Google  Yahoo  Earnings  Chart) 
IRW,Ibt Bancorp Inc (Google  Yahoo  Earnings  Chart) 
JASO,Ja Solar Hldgs Co Ads (Google  Yahoo  Earnings  Chart) 
JRCC,James River Coal Company (Google  Yahoo  Earnings  Chart) 
LDK,LDK Solar Co Ltd (Google  Yahoo  Earnings  Chart) 
LEAP,Leap Wireless International Inc (Google  Yahoo  Earnings  Chart) 
MELI,Mercadolibre Inc. (Google  Yahoo  Earnings  Chart) 
NEXT,Nextest Systems Inc (Google  Yahoo  Earnings  Chart) 
PFB,Pff Bancorp Inc (Google  Yahoo  Earnings  Chart) 
PTT,Vcg Holding Copr (Google  Yahoo  Earnings  Chart) 
RICK,Rick's Caberet Intl (Google  Yahoo  Earnings  Chart) 
RIGL,Rigel Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
RZ,Raser Technologies Inc (Google  Yahoo  Earnings  Chart) 
SDTH,Shengdatech Inc (Google  Yahoo  Earnings  Chart) 
SOLF,Solarfun Power Holdings Co Ltd (Google  Yahoo  Earnings  Chart) 
SPIR,Spire Corp (Google  Yahoo  Earnings  Chart) 
SVNT,Savient Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
TSL,Trina Solar Ltd. (Google  Yahoo  Earnings  Chart) 
ULBI,Ultralife Batteries Inc (Google  Yahoo  Earnings  Chart) 
USBE,US Bioenergy Corp (Google  Yahoo  Earnings  Chart) 
VSE,VeraSun Energy Corp (Google  Yahoo  Earnings  Chart) 
YGE,Yingli Green Energy Hlds Co (Google  Yahoo  Earnings  Chart) 

Market Roundup

Market Monitor: Bearish
Market has been in year end rally mode for last 5 days of selling. This momentum has probability of lasting for couple of weeks. A 300 plus down day will again put us back in cautious mode. However the stocks up 50% plus in a month reading are already in 20 plus territory, which indicate a possibility of a correction in next shorter time frame.

As Tuesday was half trading day and volume was very low, there are not many stocks in scans. Thin volume conditions will likely continue. Corrections have a nasty habit of showing up post holidays and in such thin environment it can wipe out profit quickly. Stocks like CSIQ, RICK, FSLR, MOS, JASO, MTL, SVNT, SDTH, etc are vulnerable to nasty correction at this level. If you are holding stocks up 50% plus in a month, be careful. Such momentum has a history of nasty reversals. Especially if the stock is also up 100% plus in last 260 days and is now up 50% plus in a month, in most cases it indicates climax.
Following stocks are up 50% plus in a month.



ANGN,Angeion Corp (Google Yahoo Earnings Chart)
ARTW,Art's-Way Manufacturing (Google Yahoo Earnings Chart)
ASTI,Ascent Solar Technologies Inc (Google Yahoo Earnings Chart)
ASTIZ,Ascent Solar Technologies` Inc. (Google Yahoo Earnings Chart)
ATVI,Activision Inc (Google Yahoo Earnings Chart)
BMTI,BioMimetic Therapeutics Inc (Google Yahoo Earnings Chart)
CDTI,Clean Diesel Technologies Inc (Google Yahoo Earnings Chart)
CSIQ,Canadian Solar Inc (Google Yahoo Earnings Chart)
CSUN,China Sunergy Co Ltd (Google Yahoo Earnings Chart)
ECHO,Electronic Clearing House (Google Yahoo Earnings Chart)
EMKR,Emcore Corporation (Google Yahoo Earnings Chart)
FSIN,Fushi Intl Inc (Google Yahoo Earnings Chart)
GNSS,Genesis Microchip Inc Delaware (Google Yahoo Earnings Chart)
GPRE,Green Plains Renewable Energy (Google Yahoo Earnings Chart)
HRBN,Harbin Electric Inc. (Google Yahoo Earnings Chart)
IRW,Ibt Bancorp Inc (Google Yahoo Earnings Chart)
JRCC,James River Coal Company (Google Yahoo Earnings Chart)
LDK,LDK Solar Co Ltd (Google Yahoo Earnings Chart)
LEAP,Leap Wireless International Inc (Google Yahoo Earnings Chart)
LNN,Lindsay Manufacturing Co (Google Yahoo Earnings Chart)
NEXT,Nextest Systems Inc (Google Yahoo Earnings Chart)
PFB,Pff Bancorp Inc (Google Yahoo Earnings Chart)
PRKR,Parkervision Inc (Google Yahoo Earnings Chart)
RICK,Rick's Caberet Intl (Google Yahoo Earnings Chart)
RIGL,Rigel Pharmaceuticals Inc (Google Yahoo Earnings Chart)
SDTH,Shengdatech Inc (Google Yahoo Earnings Chart)
SOLF,Solarfun Power Holdings Co Ltd (Google Yahoo Earnings Chart)
SPIR,Spire Corp (Google Yahoo Earnings Chart)
SVNT,Savient Pharmaceuticals Inc (Google Yahoo Earnings Chart)
TIVO,Tivo Inc (Google Yahoo Earnings Chart)
TWP,Trex Co Inc (Google Yahoo Earnings Chart)
USBE,US Bioenergy Corp (Google Yahoo Earnings Chart)
VSE,VeraSun Energy Corp (Google Yahoo Earnings Chart)
VSL,Videsh Sanchar Nigam Ads (Google Yahoo Earnings Chart)
XIDE,Exide Tech (Google Yahoo Earnings Chart)
YGE,Yingli Green Energy Hlds Co (Google Yahoo Earnings Chart)

Happy Holidays

On my current reading list

The Last Tycoons: The Secret History of Lazard Frères & Co. by William D. Cohan

King of the Club: Richard Grasso and the Survival of the New York Stock Exchange by Charles Gasparino

Hedge Hunters: Hedge Fund Masters on the Rewards, the Risk, and the Reckoning by Katherine Burton

A Bull in China: Investing Profitably in the World's Greatest Market by Jim Rogers

The Panic of 1907: Lessons Learned from the Market's Perfect Storm by Robert F. Bruner and Sean D. Carr

The Age of Turbulence: Adventures in a New World by Alan Greenspan

The Surgeons: Life and Death in a Top Heart Center by Charles R. Morris

The Dick Davis Dividend: Straight Talk on Making Money from 40 Years on Wall Street
by Dick Davis

Active Value Investing: Making Money in Range-Bound Markets by Vitaliy N. Katsenelson

Trading Momentum

Both Double Trouble (DT) and IBD 200 are essentially momentum systems.

Double Trouble is a single factor or single variable momentum system. It uses just momentum to select trading vehicle. The underlying hypothesis is the current momentum will persist for some time. So we enter a vehicle running at "100 miles per hour" when it has "a slight pause". You are not really looking at the underlying reason for the momentum. The stop manages the risk in case of reversal of momentum. The time stop ensures one does not get stuck in the pause phase for long. Actual implementation of the method is some part strategy, some part tactics and some part artistry. You can think of many ways of trading the basis strategy of playing momentum.

IBD 200 is also a momentum system. But it is multi factor or multi variable momentum system. It uses two momentum variables: price momentum and sector momentum. In addition it uses number of financial variables. If you look at them they are broadly earnings growth, earnings quality, and earnings sustainability. Earnings growth variable is in the form of EPS ranking or EPS growth. Earnings quality is represented by sales growth and longer term earnings growth. Earnings sustainability is represented by margin and ROE. Now these "financial factors" are married with sector momentum and price momentum to arrive at top 200 stocks. The implicit hypothesis is that buy momentum but only in good quality stocks.

Now one can argue the second approach is better than the first and IBD 200 is better than DT. IBD 200 seems more logical. But in reality what happens in markets is sometimes good earnings or growth stocks do well, sometime value stock do well, sometime small caps do well, sometime large caps do well, sometime concept stock with no earnings do well. DT finds a common character amongst all these, that is momentum. Plus because it calculates momentum differently from the IBD approach a turnaround play will be in DT while it might not be in IBD 200 for long time.

Hence a combination approach ensures you do not miss out on major opportunities.

Stocks up 50% or more in a month

As of today there are 21 stocks up 50% or more in a month. All these stocks were priced above 5 dollars a month ago, so it removes low priced stocks which can make large moves in short time period.
AVR,Aventine Renewable Energy Holdings Inc (Google Yahoo Earnings Chart)
BMTI,BioMimetic Therapeutics Inc (Google Yahoo Earnings Chart)
CDTI,Clean Diesel Technologies Inc (Google Yahoo Earnings Chart)
CSIQ,Canadian Solar Inc (Google Yahoo Earnings Chart)
CSUN,China Sunergy Co Ltd (Google Yahoo Earnings Chart)
EMKR,Emcore Corporation (Google Yahoo Earnings Chart)
FSIN,Fushi Intl Inc (Google Yahoo Earnings Chart)
GNSS,Genesis Microchip Inc Delaware (Google Yahoo Earnings Chart)
HOKU,Hoku Scientific Inc (Google Yahoo Earnings Chart)
IRW,Ibt Bancorp Inc (Google Yahoo Earnings Chart)
JRCC,James River Coal Company (Google Yahoo Earnings Chart)
LDK,LDK Solar Co Ltd (Google Yahoo Earnings Chart)
RICK,Rick's Caberet Intl (Google Yahoo Earnings Chart)
RIGL,Rigel Pharmaceuticals Inc (Google Yahoo Earnings Chart)
SDTH,Shengdatech Inc (Google Yahoo Earnings Chart)
SOLF,Solarfun Power Holdings Co Ltd (Google Yahoo Earnings Chart)
SVNT,Savient Pharmaceuticals Inc (Google Yahoo Earnings Chart)
USBE,US Bioenergy Corp (Google Yahoo Earnings Chart)
USS,Us Shipping Partners (Google Yahoo Earnings Chart)
VSE,VeraSun Energy Corp (Google Yahoo Earnings Chart)
VSNT,Versant Corporation (Google Yahoo Earnings Chart)

Bulk of the stocks in this list are from the Alternative Energy sector. It has been the number one ranked sector in last few weeks. The Alternative energy sector has lot of favorable factors supporting its rally. High oil price is one, policy changes in Europe is another, and recent energy bill in USA is another.

If you look at the stocks up 25% plus in a month, currently there are 92 stocks in my database which are up 25% plus. Again they were priced 5 plus a month ago.
ABH,AbitibiBowater Inc. (Google Yahoo Earnings Chart)
ABII,Abraxis Bioscience Inc. (Google Yahoo Earnings Chart)
AGO,Assured Guaranty Ltd (Google Yahoo Earnings Chart)
ALOY,Alloy Online Inc (Google Yahoo Earnings Chart)
ANH,Anworth Mtg Asset Corp (Google Yahoo Earnings Chart)
ARII,American Railroad Industries Inc (Google Yahoo Earnings Chart)
ARTW,Art's-Way Manufacturing (Google Yahoo Earnings Chart)
ARXT,Adams Respiratory Therapeutics Inc (Google Yahoo Earnings Chart)
ASTIZ,Ascent Solar Technologies` Inc. (Google Yahoo Earnings Chart)
ATVI,Activision Inc (Google Yahoo Earnings Chart)
AVR,Aventine Renewable Energy Holdings Inc (Google Yahoo Earnings Chart)
AXCA,Axcan Pharma Inc (Google Yahoo Earnings Chart)
AYI,Acuity Brands (Google Yahoo Earnings Chart)
BMRN,Biomarin Pharmaceuticals (Google Yahoo Earnings Chart)
BMTI,BioMimetic Therapeutics Inc (Google Yahoo Earnings Chart)
BRKR,Bruker Biosciences Corp (Google Yahoo Earnings Chart)
BTH,Blyth Inc (Google Yahoo Earnings Chart)
BWTR,Basin Water Inc (Google Yahoo Earnings Chart)
CDTI,Clean Diesel Technologies Inc (Google Yahoo Earnings Chart)
CHNR,ChinaNatural Resources (Google Yahoo Earnings Chart)
CITP,Comsys It Partners Inc (Google Yahoo Earnings Chart)
CLDN,Celadon Group Inc (Google Yahoo Earnings Chart)
CLF,Cleveland-Cliffs Inc (Google Yahoo Earnings Chart)
CMGI,CMGI Inc (Google Yahoo Earnings Chart)
CMO,Capstead Mortgage Corp (Google Yahoo Earnings Chart)
CRDC,Cardica (Google Yahoo Earnings Chart)
CSIQ,Canadian Solar Inc (Google Yahoo Earnings Chart)
CSUN,China Sunergy Co Ltd (Google Yahoo Earnings Chart)
DECK,Deckers Outdoor Corp (Google Yahoo Earnings Chart)
DRRX,Durect Corporation (Google Yahoo Earnings Chart)
EICU,Visicu Inc (Google Yahoo Earnings Chart)
EMKR,Emcore Corporation (Google Yahoo Earnings Chart)
ENZ,Enzo Biochem Inc (Google Yahoo Earnings Chart)
FCEL,Fuelcell Energy Inc (Google Yahoo Earnings Chart)
FNM,Fannie Mae (Google Yahoo Earnings Chart)
FSIN,Fushi Intl Inc (Google Yahoo Earnings Chart)
GLYT,Genlyte Group Inc (Google Yahoo Earnings Chart)
GMCR,Green Mountain Coffee Roasters (Google Yahoo Earnings Chart)
GNSS,Genesis Microchip Inc Delaware (Google Yahoo Earnings Chart)
GRO,Agria Corp (Google Yahoo Earnings Chart)
HES,Hess Corp (Google Yahoo Earnings Chart)
HINT,Hill International Inc (Google Yahoo Earnings Chart)
HOKU,Hoku Scientific Inc (Google Yahoo Earnings Chart)
HRBN,Harbin Electric Inc. (Google Yahoo Earnings Chart)
INCY,Incyte Corp (Google Yahoo Earnings Chart)
IRW,Ibt Bancorp Inc (Google Yahoo Earnings Chart)
JASO,Ja Solar Hldgs Co Ads (Google Yahoo Earnings Chart)
JCG,J Crew Group Inc (Google Yahoo Earnings Chart)
JRCC,James River Coal Company (Google Yahoo Earnings Chart)
JRT,JER Investors Trust Inc (Google Yahoo Earnings Chart)
LDK,LDK Solar Co Ltd (Google Yahoo Earnings Chart)
MASI,Masimo Corp (Google Yahoo Earnings Chart)
MEI,Methode Electronics Cl A (Google Yahoo Earnings Chart)
MELI,Mercadolibre Inc. (Google Yahoo Earnings Chart)
MGAM,Multimedia Games Inc (Google Yahoo Earnings Chart)
MGPI,Mgp Ingredients Inc (Google Yahoo Earnings Chart)
MIPI,Molecular Insight Pharmaceuticals Inc. (Google Yahoo Earnings Chart)
MNTA,Momenta Pharma (Google Yahoo Earnings Chart)
MOGN,Mgi Pharma Inc (Google Yahoo Earnings Chart)
MOS,Mosaic Company (Google Yahoo Earnings Chart)
NEXT,Nextest Systems Inc (Google Yahoo Earnings Chart)
NZ,Netezza Corporation (Google Yahoo Earnings Chart)
OME,Omega Protein Corp (Google Yahoo Earnings Chart)
OSG,Overseas Shipholding Grp (Google Yahoo Earnings Chart)
PFB,Pff Bancorp Inc (Google Yahoo Earnings Chart)
PRKR,Parkervision Inc (Google Yahoo Earnings Chart)
PWRD,Perfect World Co Ltd (Google Yahoo Earnings Chart)
RDEA,Ardea Biosciences Inc (Google Yahoo Earnings Chart)
REGN,Regeneron Pharm Inc (Google Yahoo Earnings Chart)
RICK,Rick's Caberet Intl (Google Yahoo Earnings Chart)
RIGL,Rigel Pharmaceuticals Inc (Google Yahoo Earnings Chart)
RZ,Raser Technologies Inc (Google Yahoo Earnings Chart)
SBH,Sally Beauty Holdings Inc. (Google Yahoo Earnings Chart)
SDTH,Shengdatech Inc (Google Yahoo Earnings Chart)
SEAC,Seachange Internat Inc (Google Yahoo Earnings Chart)
SOLF,Solarfun Power Holdings Co Ltd (Google Yahoo Earnings Chart)
SSYS,Stratasys Inc (Google Yahoo Earnings Chart)
STP,Suntech Power Holdings Co Ltd (Google Yahoo Earnings Chart)
SVNT,Savient Pharmaceuticals Inc (Google Yahoo Earnings Chart)
TIVO,Tivo Inc (Google Yahoo Earnings Chart)
TRLG,True Religion Apparel Inc (Google Yahoo Earnings Chart)
TT,Trane Inc (Google Yahoo Earnings Chart)
TTWO,Take-Two Intera Software (Google Yahoo Earnings Chart)
UAPH,Uap Holding Corp (Google Yahoo Earnings Chart)
USBE,US Bioenergy Corp (Google Yahoo Earnings Chart)
USS,Us Shipping Partners (Google Yahoo Earnings Chart)
VSE,VeraSun Energy Corp (Google Yahoo Earnings Chart)
VSL,Videsh Sanchar Nigam Ads (Google Yahoo Earnings Chart)
VSNT,Versant Corporation (Google Yahoo Earnings Chart)
WFR,Memc Electronic Material (Google Yahoo Earnings Chart)
XIDE,Exide Tech (Google Yahoo Earnings Chart)
YGE,Yingli Green Energy Hlds Co (Google Yahoo Earnings Chart)


One of the ways to use this information is to find new sector and stock trends. Given a catalyst, stocks breakout and move rapidly in short time frame. Such stocks then consolidate and have next set of breakouts. That is how multi month rallies start out.

So here is a simple scan for those with Telechart to find tommorrow's leaders.
Price a month ago was greater than 5
C21 >= 5

Price % change in a month is greater than 20%
For this Telechart has a pre loaded scan called "Price Percent Change 1 month"
100*(c-c21)/c21
Value for this has to be over 20

Volume greater than 100000

Capitalization greater than 100 million
This ensures the more speculative stocks get eliminated.

Now if you add all these conditions together in Easyscan, you get a list of stocks up 20% plus in a month.
There are many ways you can slice and dice this list:

1. Sort by Price Growth Rate 1 year or Percent Change 26 weeks. The one at top are already in rally mode and stock with high relative strength. Those with lower values are just starting out rallies or dead cat bounces.
2. Sort by Price 1 year range. You can then look at those near top of range and those at bottom. A stock within 40 plus range is a good bet for follow through or pullback buy. Those below 40 are probably dead cat bounce or good for value investors.
   

Stocks at both end of range spectrum make 25% or 50% moves. Buying both 52 week low and high can get you a 25% plus move on a shorter time frame.

Now to take this further you can look at how many 2%, 4%, 6% , 8%, or 10% plus moves the stock had in its 20% plus moves. Where did they happen and what do they indicate about continuation of possible short term momentum.

Studying stocks categorized by % growth on various time frames can give you a very good insight in to behavior of stocks and momentum on various time frames. Some time frames to study are:

1. Stocks up 100% plus in a year
2. Stocks up 300% plus in a year
3. Stocks up 1000% plus in a year
4. Stocks up 25% plus in a quarter
5. Stocks down 25% plus in a quarter
6. Stocks up 25% plus in a month
7. Stocks down 25% plus in a month

Very soon we will be in the earnings season

Very soon we will be in the earnings season. As all of you know I have written extensively on this topic and detailed what is involved in it. If you really apply yourself , you can easily find 5 to 10 very good trades during earnings season. Trades which will give you anywhere between 20 to 100% plus returns in few months post entry. This is one method if you master, it gives you dividend 4 times in a year.

The trick in this is to prepare well in advance and think through what you want to achieve . Some traps people fall in to while trading earnings are:

1 Making it very complex. I have seen spreadsheets so complex to track earnings, that I don't know what the trader is trying to achieve. When the earnings spreadsheet was up I use to get so many request for adding column or information to it that it would have easily become 100 column spreadsheet.

2 Trying group collaboration. It does not work. If you want to trade this and want to really make money, forget depending upon someone to update the databases. Do it yourself. I do this entire thing without spreadsheet, I just write earnings next to symbols on a small pad and feed selected list in watch list for next day.

3 Searching for perfect sources of information. Please understand it is what it is. For retail traders there are no easily available and timely source of information. So within the constrains one has to innovate. There is sufficient opportunity to exploit in spite of limited databases.

4 Falling in love with a stock. A stock might show 10000% growth and if it is not surprise to market, it will not react or go down.

5 Not ready both mentally and in terms of method well before the earnings season. You have to do all the thinking and planning before earnings season, if you want to trade this method. Bull market, bear market earnings trade works.


How To Trade Earnings
How to trade earnings Part2
How to trade earnings Part3
Earnings and Bulkowski
Improving odds in earnings breakout
Earnings Season- Time to be very careful...
Earnings and Dan Zanger
Earning Surprise System for $1495
Trading Earnings Breakouts
Earnings Acceleration- Long Term Impact
Trading Earnings Breakout -Part1
Trading Earnings Breakouts -Part2
Trading Earnings Breakouts -Part3

Market Monitor

• The Market Monitor spent just one day (12/10/2007) in green territory before turning red again.
• In last 5 days we have had 4 negative days and 3 of them with 300 plus readings.
• Readings on stocks down 25% plus in 65 days are at highest level in last 16 days.
• The readings on stocks up 100% plus are steadily declining.
• Yesterday saw profit taking in leaders which were holding on to gain.
• The news is bleak with talk of recession and stagflation dominating.
• However with 5 days of selling behind us a reflex rally might be a possible scenario here.
• A ideal scenario wold be more panic selling which drives reading on some of the things like stocks down 100% plus and stocks up 25% plus in 65 days to extreme levels from which sustainable bounce develops.
• But I will not be surprised if we get bounce at this level. The Feds across the world are coordinating a massive intervention in financial markets and that should provide an impetus for a "don't fight the Fed rally".
  

Pre earnings announcement drift

Pre earnings announcement drift is different from PEAD.

PEAD or Post Earnings Announcement drift anomaly was documented in academic literature for first time in 1968.

The post earnings announcement drift anomaly means the tendency for stocks to earn abnormally high returns in the three quarters following a positive earnings announcement, and to earn abnormally low returns in the three quarters following a negative earnings announcement.

The phenomenon can be explained with a number of hypotheses. The most widely accepted explanation for the effect is investor under-reaction to earnings announcements.

This was initially proposed by the information content study of R. Ball & P. Brown, 'An empirical evaluation of accounting income numbers', Journal of Accounting Research, Autumn 1968, pp. 159-178.

As most of you who have read my blog know, I have been talking about PEAD for long time and the strategies like earnings trading are basically based on this fundamental anomaly. Episodic Pivots (EP) method also uses the same logic to select earnings EP. My original post lays out the PEAD phenomenon clearly.

The key to finding an edge

The key to finding an edge is to find market anomalies. Markets are not random. For many years studies after studies have shown two anomalies which make profits

1 PEAD- Post Earning Announcement drift
2 Momentum effect


PEAD- Post Earning Announcement Drift

Each quarter when companies report their earnings, there are usually a handful of companies whose earnings are either surprisingly good, or shockingly bad. You can immediately recognize these companies by the post earnings announcement jump or plunge in their respective stock prices. So far so good. But now fast forward, say, three quarters. If you take a look at all the stocks that had negative earnings surprises, you find that on average these stocks continued to go down. Similarly, the stocks that had positive earnings surprises continued to go up, on average. In other words, the stocks with earnings surprises exhibit post earnings announcement drift, or PEAD for short. Now this is weird. Every finance professor will tell you that this isn't suppose to happen. If the stock market is efficient, what should happen is a one-time jump in the stock price when earnings are announced.

This PEAD effect was first identified in a paper published in 1968, almost 40 years ago. Generally, when research on market inefficiencies is published, people start trading against the inefficiency and the anomaly goes away. But not with PEAD. Subsequent papers have overwhelmingly found the same result. PEAD is considered one of the most robust stock market anomalies around. And, so far, nobody really knows why....

Momentum effect

There is substantial evidence that indicates that stocks that perform the best (worst) over a three to 12 month period tend to continue to perform well (poorly) over the subsequent three to 12 months. Momentum trading strategies that exploit this phenomenon have been consistently profitable in the United States and in most developed markets. Similarly, stocks with high earnings momentum outperform stocks with low earnings momentum.

Hundreds of studies have shown this behavior continues in the market years after year. Like this there are many anomalies and if you find them you will not have to worry about making money and losing your edge. I basically trade 5-6 such anomalies. Each one of them have a statistically proven edge and logic as to why they work.

But stocks also drift up coming in to earnings. You will notice this phenomenon in next 4-6 weeks as we approach the earnings season. Such drift in price coming in to earnings season is called pre earnings drift.

What drives pre earnings drift is either earnings information leakage (which was common pre Reg FD ) or due to analyst actions. Now analyst have a bad reputation on the street, but analysts earnings estimate changes are very powerful thing which often results in pre earnings drift. On companies with extensive analyst coverage, when analyst start raising or decreasing upcoming or future earnings estimate, it results in pre earning drift, if the information is not reflected in the stock price. That is why you will see stocks breaking out 4 to 6 weeks before earnings and then rallying in to earnings season.

There are ways to trade this pre earnings drift for short term traders and a well designed method to trade such drift can offer a very profitable strategy.

Invest Like a Shark

Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital Made a Fortune Investing in the Stock Market (Hardcover)
by James "RevShark" DePorre (Author), James J. Cramer (Foreword)

This shark is afraid of depth. Very afraid of depth. So James 'RevShark' DePorre swims in 6 inch deep water in this 200 page book. Superficial treatment of investing with capital S is what this book is all about.

In its subtitle the book promises to tell you , How a deaf guy with no job and limited capital made a fortune investing in the stock market. That story is known to most readers of thestreet.com. That story is 7 pages in the book, rest of the book is superficial fluff and mostly a long harangue about how Wall Street is out to get the small guy. The authors prescription to average investors to overcome that problem is to become a active trader.

The author calls this new approach Shark Investing. Now how does RevShark define shark investing, well tough luck finding that in this book. What you will find is general, non specific homilies like shark investors are aggressive, they are flexible, they are fast and so on and so on without getting in to details.
Consider these characteristic of Shark Investor the author highlights:

• sharks are aggressive
• sharks are opportunistic and reactive
• sharks stay in motion
• sharks plan their attacks
• sharks are patient while they stalk their prey
• sharks take advantage of emotions of crowd
• sharks don't have emotional or sentimental attachments
• shark are risk averse
• sharks have an attitude
• sharks hate deep water!! (I made that up)
  

Rhetorical flourish and flowery language is used all the time to avoid getting in to depth. Throughout this book this shark skillfully avoids getting in to deep waters. So all other approach to investing are dismissed as not suitable without providing any valid proof or coherent arguments. Value investing is dismissed as buy and hold, which shows utter lack of understanding by the author about what value investing is. Academic research is dismissed as just efficient market hypothesis . Obviously in the shallow waters this shark swims in he has never heard of things like PEADs and momentum anomalies and several other anomalies which challenged efficient market hypothesis immediately.

The funny part is after dismissing academic research as not useful to investors the author gives two examples of Shark style trading PCR and GROW, both are examples of post earnings announcement drifts, where those stocks broke out post significantly better earnings. PEAD is well documented anomaly in academic literature.

Overall in this book, there are no specific and just general superficial direction. The shark metaphor is overused, so it becomes irritating. As a trader I doubt you would find anything useful or containing any depth in this book.

As an investor you should stay away from this Shark. Why because it gives the wrong advise to investors who neither have the skills nor the tools to become active traders. The author keeps stating again and again that for average investor active investing in which you stay in motion, is a far safer approach to the stock market than the long term "buy and hold" approach that Wall Street promotes. He neither defines what it is nor shows the average investor how to do it. Without in depth understanding of what is involved in active investing, if average investors try it, the other sharper sharks will eat them alive in the market.

RevShark might know how to trade, but he does not know how to write a useful book with meaningful advise for traders or investors. This book looks like a half hearted, hurriedly put together book.

Subprime Humor

Volatile markets

• People were aggressively bearish after Fed cut and as I said that day evening on Member's blog, one should not read too much in to the Fed day action. Market was going up coming in to Fed meeting and so initial sell the reaction was a likely scenario. However the selling was broad based but on individual EP scans there were only 8 stocks with high volume surge.
  
• Yesterday morning lot of bearish bets got squeezed hard. There was lot of confusion and name calling. Whatever be the reason, the post Fed announcement period tends to be volatile.
• The bears were left scrambling by the coordinated intervention move. The morning pop was never going to be sustainable and I used that to lighten up considerably. When you get unexpected bonanza which was not in your plan, it is always good idea to book some profits. The market spent the day giving up that strength and in the process creating lot of uncertainty going forward.
• The Market Monitor is back in red on 65 days ratio. We are in risky periods for buying breakouts. But seasonal factors might keep the market in a range.2-3 days post Fed announcements generally tend to be volatile. The volatility makes buying breakout difficult task as a position with 10% profit in morning can turn to loss by evening. So light commitments and only selective trading is currently best option. When in doubt stay out. So back to capital protection mode.

IBD Custom Screen Wizard

IBD Custom Screen Wizard is one of the scanning tools offered by IBD. It is a good tool to narrow down the universe of stocks to trade if you following IBD based strategies. You can also generate a IBD 200 kind of list daily using it. If you are subscriber to it, here are some scans you will find useful.

The best of the best

Sales + Profit Margins + ROE (SMR) Rating	A
% Change in Latest Quarter's EPS vs. Same Quarter Prior Year	Greater than or equal to: 50
Annual % EPS Growth Rate of Last 3 Years	Greater than or equal to: 25
Average EPS % Change for the Last 2 Quarters	Greater than or equal to: 50
Annual % Sales Growth Rate of Last 3 Years	Greater than or equal to: 25
ROE (Latest Fiscal Year Reported)	Greater than or equal to: 25

Long Term Fundamentals

Screen Criteria	Parameters
Earnings Per Share (EPS) Rating	Greater than or equal to: 70
Relative Price Strength (RS) Rating	Greater than or equal to: 65
Annual % EPS Growth Rate of Last 3 Years	Greater than or equal to: 25
Annual % Sales Growth Rate of Last 3 Years	Greater than or equal to: 25
ROE (Latest Fiscal Year Reported)	Greater than or equal to: 17

Leading stocks from leading sectors

Screen Criteria	Parameters
Earnings Per Share (EPS) Rating	Greater than or equal to: 70
Relative Price Strength (RS) Rating	Greater than or equal to: 70
Sales + Profit Margins + ROE (SMR) Rating	A, B
% Change in Latest Quarter's EPS vs. Same Quarter Prior Year	Greater than or equal to: 50
Company's Industry Group Rank	From 1 to 39

Double EPS Growth plus price momentum

Screen Criteria	Parameters
Earnings Per Share (EPS) Rating	Greater than or equal to: 70
Relative Price Strength (RS) Rating	Greater than or equal to: 70
% Change in Latest Quarter's EPS vs. Same Quarter Prior Year	Greater than or equal to: 100

IBD 200 like list

Earnings Per Share (EPS) Rating	Greater than or equal to: 60
SmartSelect® Composite Rating	Greater than or equal to: 96

The first screen is very focused and will find the best stocks. Stocks which can make 50% kind of moves in a quarter under right circumstances is what you will find in it. It gives less than 50 candidate most of the time.

FOMC

Release Date: December 11, 2007

For immediate release

The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 4-1/4 percent.

Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today’s action, combined with the policy actions taken earlier, should help promote moderate growth over time.

Readings on core inflation have improved modestly this year, but elevated energy and commodity prices, among other factors, may put upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.

Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; William Poole; and Kevin M. Warsh. Voting against was Eric S. Rosengren, who preferred to lower the target for the federal funds rate by 50 basis points at this meeting.

In a related action, the Board of Governors unanimously approved a 25-basis-point decrease in the discount rate to 4-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, and St. Louis.

Monitoring Sectors

If we look at the IBD 197 sector list today and list the top five sector, they are:

1. Energy other
2. Mach Farm
3. Int Content
4. Med System
5. Metal Ores

Now this tells you what is moving higher currently. But what you are interested is to know six month ago what is going to move forward. That way you will be in that sector at the start of the rally.
Now if you look at the same list with the sector rank 6 month ago, here is what you get:

1. Energy other (8)
2. Mach Farm (32)
   
3. Int Content (152)
   
4. Med System (59)
   
5. Metal Ores Gold/Silver (108)

So a sector ranked 3 rd today was 152 or ranked 5 th was 108 six month ago. As a trader your objective is to capture some of that move. Once a sector reaches number one position, it is either in climax stage or about to reverse or pullback. So having that information helps only short term traders looking for quick swing trades or those contemplating shorts.

Earlier one can identify start of a sector trend better it is. That is why the approach I detailed yesterday is probably better approach. Looking at sectors making 52 week or 6 month or quarter high is another approach. If you want to use a relative strength on sectors, you should use a smaller time frame relative strength to quickly figure out sector trend change.

You will see several traders create very pretty looking, colorful spreadsheets for monitoring sectors but most of the time those pretty looking things give you perfectly useless information in terms of its usability for trading. They put enormous efforts in to it but in trading terms those efforts are wasted. One must monitor things which will make you money, everything else is waste of time and efforts.

How to make money by monitoring sectors

Sector monitoring is useful if it gets you in to sector at beginning of sector trend. By the time sectors reach at top in sector ranking lists, bulk of the move is over. So most sector rankings have that problems.

Sectors are often based on historical classification, which often mislabels new companies or subsector. e.g. Ethanol stocks were under Chemical sector in most classification , when they started rallying and had big rally some time back. Solar Sector stocks are currently under other energy in some cases and under electronics in some cases but it is a subsector by itself from trading usefulness perspective. The exchanges (CME, ICE, NYX, NDAQ and likes ) are under Diversified Investments in Telechart. Does that make sense. I can go on and on with such examples. While broad sector categories like

• Basic Materials
• Capital Goods
• Communications
• Consumer Cyclical
• Energy
• Financial
• Health Care
• Technology
• Transportation

are correct classification on a practical terms you want to isolate a subsector or more specifically a "industry" trend. Now this means having sectors classified in more smaller industry groups. That is what Bullsector does to certain extent. That is also the reason IBD has created its own sectors.

Another problem with sector ranking is sometime the stocks in sector are weighted by market cap and so if smaller caps are moving, it may not get reflected. Also when you are tracking a sector you are averaging it can give you a misleading picture. For example AAPL in many sector classification is in Hardware, now when AAPL was rallying in beginning of its move, rest of the stocks in the sector were going down rapidly. So the sector ranking may not truly reflect such things as it is average. As they say averages hide more that they reveal in most cases.

So considering all these limitations, a sector tracking system should give you actionable information from trading perspective. As a trader the only reason to monitor sector is to make money from it. Fortunately there are some very good sector tracking ways readily available :

• Barchart Sector Page
• Moneycentral 10 Best Performing Industries
• IBD Industry Groups Page

The best option according to me is the IBD Industry Group Page. To use it to make money you have to study it in detail and understand the logic and thinking behind it. It has following things:

• 197 Group Rankings
• Leading Sectors Graph
• 52 week high and low
• Groups with highest % of stocks making new highs

How does one use this information. The 52 week high and low section and Groups with highest % of stocks making new highs tell you very critical information. They tell you where the next set of sector leaders are going to be coming from. In the book 24 Essential Lessons for Investment Success, William O'Neil talks about how to use that page :

The top 20% of the 197 industry groups are usually best, and I recommend avoiding the bottom 20%. IBD’s main stock tables include the stock’s Industry Group Relative Strength Rating on an A to E scale, with A being highest. A and B rated stocks are preferred. This detailed information can’t be found in any other publication.

A second and even better place to find the market’s leading industry groups is Investor’s Business Daily’s “52-Week Highs & Lows” feature on the “Industry Groups” page.

It’s organized by sectors with the most stocks making new price highs. When you’re in a positive market with numerous stocks making new highs, the top five or six sectors on this list will be your leaders. I check this list every single day so I’m always aware of what the top groups are and can spot when a brand new group shows up in the top part of this innovative list. Use of this list should increase most investors’ performance at least 10% to 20%.

The retail group popped up near the top of the list at the beginning of 1998 for the first time in several years. Any time you have 30 or 40 stocks in a sector making new highs, that’s a powerful clue you can’t afford to ignore.

Another special list entitled “Groups With The Greatest % Of Stocks Making New Highs” also provides valuable clues. It’s in a somewhat smaller box located below the “52-Week Highs & Lows” feature. (page 35)

If you daily track that list, you will see new sector trends before they hit the 197 Sector list top. For example currently the top six sectors are:

1. Medical (26)
2. Energy (13)
3. Retail (12)
4. Utility (9)
5. Finance (8)
6. Business Services (8)

That tells you in near future Medical and retail sector might move up the 197 sector ranking. Those are the sectors to focus on. Also if you look at individual 26 stocks in that Medical Group , you will see they are ranked by volume change and stocks with good EPS are boldfaced. So it also tells you which stock amongst these sectors to focus on.

How do I use this information is by looking at other stocks also likely to break from that sector. I also look at IBD 200, DT and EP scans and see if there are any medical stocks in it and if there are prefer them over others. This kind of sector monitoring is actionable. You can actually find trades using this approach.

Cantillon Effect

Bill Rempel has a very insightful post on inflation. It immediately reminded me of my post grad days, where we had to read Richard Cantillon's essays as part of economics course. Our Economics professor also dabbled in speculation and he at that time, many years ago , gave exactly the same message as Bill does.

I don’t believe that we can stop this worldwide inflation problem, and most likely our only chance to even slow it is to elect a few hundred Ron Pauls all over the world. Since this blog is “trading, investing, politics, whatever,” I want to give you the key to trading around this thing.

Find the bubbles as early as possible.

Buy them.

The trend is your friend, ’til the end, when it bends.

This is most likely your single best hope to have your personal wealth growth exceed, by a wide margin, the increase in your cost of living over time.

We were too young and green and probably too idealist to understand the importance of that message at that time.

Read the full post. Great stuff. Very sound advise.

What do funds buy and why

Originally published on Members Only site.

IBD every month has list of new buys by top 15% funds. The list was in Wednesday paper. Now if you look at this list carefully, you will see most of these had recent earnings surprise or earnings or sales acceleration.


AAPL ABAX ABB ACO AMZN ARD ATW BBD BCSI BGC BIDU BLK BOOM BPHX BTJ BUCY CCH CEDC CF CHL CMED CMG CNH CNQR CPLA CTRP DE DLB DRYS DSX DVR EDU ENS ESRX FCSX FLIR FTK GFIG GILD GLDN
========
GME GOOG GRMN GSOL HDB HMSY HOLX ININ ISRG ITU JRJC KOP LAYN LIFC LKQX MA MBT MCRS MEE MICC MORN MOS MR MTL NOK NVT OTEX PAY PCLN PCP PFWD POT RIG RIMM SDA SNDA SNP STP SYNA TBSI
========
TEF TKC UIC VIP VIVO VMW WFR

Buying after funds have bought is one way to look at it, but the better way to look at it is what do funds buy and why. You should buy when funds buy , not after they bought. If they buy on earnings surprise, you should also buy based on it. Understanding the criteria funds use to buy stocks is important.

In smaller and neglected stocks where the inefficiencies are greatest, you will find on Episodic Pivots (EP), if you look at fund ownership, it will be low and then you look at fund ownership 3 or 6 months down the line, it would have increased.

For example in June I saw a EP in GHM on earnings day, it had around 6 funds owning it. Now if you see there are 11.



Or look at LPHI, it also had earnings day EP in June, it had on all databases 0 funds ownership, now it has 10 funds owning it.



So when earnings or other catalyst comes in funds come in. You will see this again and again. Especially for neglected stocks which suddenly have earnings acceleration, everybody gets the information at the same time. So understanding why and when funds buy gives you an advantage. You don't have the resources to research and analyze like funds, but if you understand the logic they use, you have significant edge.

Another fine lesson in The Art of Chart Reading.

Credit Crunch

The art of chart reading!!!

Don't forget to " Burn your charts"

Methods and mental models

Given a same method and same set of guidelines for selecting trades and managing them, some traders go on and do very well, while some traders do very badly. Given same mix of methods discussed here or in any book some traders will go on and make high returns using them and some traders will make losses. So is the issue with method or a trader.


Now this is not an issue with trading only. In all fields involving high degree of personal skills and judgment, this is a common phenomenon. I worked for six years in advertising. It is one industry where either people understand it and are very good at it or just don't get it. The feel for producing, judging and executing good advertising is very unique skill. The methods used are common knowledge , but you will find many people spend years in the industry and never develop the ability to judge or produce good advertising. Similarly good marketers have an intuitive feel for marketing and that is why they are so much in demand. With so many marketing courses around all marketing theory and methods not being secret, why is this so. In most fields most methods are not secret but ability of people to internalize those methods and execute them is where you will find a gap.


Most people do not explore the reason for this or are not aware of the processes that go through in the mind which can help or hinder this process. If you want to improve your trading results, it is an area to explore.

A catalyst based aproach

This is a list of stocks up 25% or more on a month time frame. All the stocks were priced 5 or above at start of their move. There are 33 stocks currently in this list. When market is in confirmed rally mode the numbers is significantly higher ranging from 100 to 400.
One of the ways to improve your returns significantly is to try and identify few of these stocks at the beginning of such quick moves.If you can find 5-6 of them in a month, it can make a lot of difference to your account. For that one needs to study such stocks over a long period of time.
One of the ways to find such stocks is to use a catalyst based approach.
All such fast moves tend to have identifiable catalyst at start of their move. Catalyst based approach requires understanding of such catalyst and their ability to move stocks. That is a skill worth learning. Research has shown many catalysts have a shorter term predictive power on stock prices.


AFR,American Financial Realty Trus (Google  Yahoo  Earnings  Chart) 
AGO,Assured Guaranty Ltd (Google  Yahoo  Earnings  Chart) 
ALTH,Allos Therapeutics Inc. (Google  Yahoo  Earnings  Chart) 
CBK,Christopher & Banks Corp (Google  Yahoo  Earnings  Chart) 
CDTI,Clean Diesel Technologies Inc (Google  Yahoo  Earnings  Chart) 
CEL,Cellcom Israel LTD (Google  Yahoo  Earnings  Chart) 
CSIQ,Canadian Solar Inc (Google  Yahoo  Earnings  Chart) 
DIT,Amcon Distributing Co (Google  Yahoo  Earnings  Chart) 
DIVX,Divx Inc (Google  Yahoo  Earnings  Chart) 
DLB,Dolby Laboratories Inc (Google  Yahoo  Earnings  Chart) 
ENS,Enersys Inc (Google  Yahoo  Earnings  Chart) 
FSLR,First Solar Inc (Google  Yahoo  Earnings  Chart) 
GFLS,Greater Community Bancorp (Google  Yahoo  Earnings  Chart) 
GLYT,Genlyte Group Inc (Google  Yahoo  Earnings  Chart) 
JCG,J Crew Group Inc (Google  Yahoo  Earnings  Chart) 
LUNA,Luna Innovations Inc (Google  Yahoo  Earnings  Chart) 
MIPI,Molecular Insight Pharmaceuticals Inc. (Google  Yahoo  Earnings  Chart) 
MTG,Mgic Investments Corp (Google  Yahoo  Earnings  Chart) 
NBIX,Neurocrine Biosciences (Google  Yahoo  Earnings  Chart) 
PCLN,Priceline.com Inc (Google  Yahoo  Earnings  Chart) 
PSPT,Peoplesupport Inc (Google  Yahoo  Earnings  Chart) 
SEAC,Seachange Internat Inc (Google  Yahoo  Earnings  Chart) 
SOLF,Solarfun Power Holdings Co Ltd (Google  Yahoo  Earnings  Chart) 
STEC,Stec Inc (Google  Yahoo  Earnings  Chart) 
STP,Suntech Power Holdings Co Ltd (Google  Yahoo  Earnings  Chart) 
SYUT,Synutra International (Google  Yahoo  Earnings  Chart) 
TECUA,Tecumseh Products Cl A (Google  Yahoo  Earnings  Chart) 
TECUB,Tecumseh Products Cl B (Google  Yahoo  Earnings  Chart) 
TELOZ,Tel Offshore Trust (Google  Yahoo  Earnings  Chart) 
TGIC,Triad Guaranty Inc (Google  Yahoo  Earnings  Chart) 
USBE,US Bioenergy Corp (Google  Yahoo  Earnings  Chart) 
VVTV,Valuevision Media Inc Cl A (Google  Yahoo  Earnings  Chart) 
WCG,Wellcare Health Plans Inc (Google  Yahoo  Earnings  Chart) 


If you look at the same thing on downside , currently there are 206 stocks down 25% or more in a month. Just a few days ago this number was over 400. Tracking such stock moves on daily basis and building a model of what makes stock make such moves is what can prove rich dividends.Once you put sufficient effort in identifying such catalyst over the years, you become better at identifying such stocks at the start of a move.

Capturing 2-5 of such big moves on a regular basis on monthly time frame can make a vast difference to your returns.

S&P lagging stocks

These stocks are in bottom 10% by relative strength. Many value investors and bottom fishers like to look at such stocks. During reflex bounce, such beaten down stocks have 1-5 days rallies, which offer good profit opportunities for nimble traders.Which you would see in lot of these stock in last one week. Beaten down stocks have rallied from bottom as short sellers covered and bargain hunters picked up some of them.

A stock in this list may offer good long potential under some circumstances. Look at THC, which was at bottom of relative strength list for many weeks and in last one month has gone up 77% from the low. Buying near 52 weeks can be very profitable, if you know what to look for in a stock and understand how value and deep value players operate.

THC : Tenet Healthcare Corp with Episodic Pivot buy signals marked in blue on chart



Ambac Financial Group (Google  Yahoo  Earnings  Chart) 
Advanced Micro Devices (Google  Yahoo  Earnings  Chart) 
Brunswick Corp (Google  Yahoo  Earnings  Chart) 
Big Lots Inc (Google  Yahoo  Earnings  Chart) 
Citigroup (Google  Yahoo  Earnings  Chart) 
Cb Richard Ellis Svcs (Google  Yahoo  Earnings  Chart) 
Circuit Cty Strs Inc (Google  Yahoo  Earnings  Chart) 
Countrywide Financial (Google  Yahoo  Earnings  Chart) 
Cit Group Cl A (Google  Yahoo  Earnings  Chart) 
Capital One Financial Cp (Google  Yahoo  Earnings  Chart) 
Centex Corp (Google  Yahoo  Earnings  Chart) 
Dillard's Inc (Google  Yahoo  Earnings  Chart) 
D.R. Horton Inc (Google  Yahoo  Earnings  Chart) 
E Trade Financial Corp (Google  Yahoo  Earnings  Chart) 
First Horizon Natl (Google  Yahoo  Earnings  Chart) 
Fannie Mae (Google  Yahoo  Earnings  Chart) 
Freddie Mac (Google  Yahoo  Earnings  Chart) 
Gannett Co Inc (Google  Yahoo  Earnings  Chart) 
Harman Internat Ind Inc (Google  Yahoo  Earnings  Chart) 
Jabil Circuit Inc (Google  Yahoo  Earnings  Chart) 
J.C. Penney Company Inc (Google  Yahoo  Earnings  Chart) 
Nordstrom Inc (Google  Yahoo  Earnings  Chart) 
Kb Home (Google  Yahoo  Earnings  Chart) 
King Pharmaceuticals Inc (Google  Yahoo  Earnings  Chart) 
Lennar Corp Cl A (Google  Yahoo  Earnings  Chart) 
Liz Claiborne Inc (Google  Yahoo  Earnings  Chart) 
Lsi Corporation (Google  Yahoo  Earnings  Chart) 
Mbia Inc (Google  Yahoo  Earnings  Chart) 
Microchip Technology Inc (Google  Yahoo  Earnings  Chart) 
Moody's Corporation (Google  Yahoo  Earnings  Chart) 
Mgic Investments Corp (Google  Yahoo  Earnings  Chart) 
Micron Technology Inc (Google  Yahoo  Earnings  Chart) 
National City Corp (Google  Yahoo  Earnings  Chart) 
New York Times Co The (Google  Yahoo  Earnings  Chart) 
Office Depot Inc (Google  Yahoo  Earnings  Chart) 
Officemax Inc (Google  Yahoo  Earnings  Chart) 
Pulte Homes Inc (Google  Yahoo  Earnings  Chart) 
Qwest Cmmnctns Intl Inc (Google  Yahoo  Earnings  Chart) 
Radioshack Corp (Google  Yahoo  Earnings  Chart) 
Sears Holding Corp (Google  Yahoo  Earnings  Chart) 
Slm Corp (Google  Yahoo  Earnings  Chart) 
Sandisk Corp (Google  Yahoo  Earnings  Chart) 
Sovereign Bancorp Inc (Google  Yahoo  Earnings  Chart) 
Teradyne Inc (Google  Yahoo  Earnings  Chart) 
Tellabs Inc (Google  Yahoo  Earnings  Chart) 
Tyson Foods Inc (Google  Yahoo  Earnings  Chart) 
Unisys Corp (Google  Yahoo  Earnings  Chart) 
Washington Mutual Inc (Google  Yahoo  Earnings  Chart) 
Xl Capital Ltd (Google  Yahoo  Earnings  Chart) 
Zions Bancorporation (Google  Yahoo  Earnings  Chart) 


10 out of these 50 stocks had a 20% plus bounce from 52 week low in last one month. When market turns from oversold level or has reflex bounce, such moves are common.

S&P leading stocks

Stock in top 155 by relative strength from S&P universe. These stocks have held up well and some have prospered during the downturn.These are the kind of stocks likely to move higher as the rally progresses.

Apple Inc (Google  Yahoo  Earnings  Chart) 
Aetna Inc (Google  Yahoo  Earnings  Chart) 
Aflac Inc (Google  Yahoo  Earnings  Chart) 
Allergan Inc (Google  Yahoo  Earnings  Chart) 
Assurant Inc (Google  Yahoo  Earnings  Chart) 
American Tower Corp (Google  Yahoo  Earnings  Chart) 
Amazon.Com Inc (Google  Yahoo  Earnings  Chart) 
Aon Corp (Google  Yahoo  Earnings  Chart) 
Apache Corp (Google  Yahoo  Earnings  Chart) 
Air Products & Chemicals (Google  Yahoo  Earnings  Chart) 
Apollo Group Inc Cl A (Google  Yahoo  Earnings  Chart) 
Avon Products Inc (Google  Yahoo  Earnings  Chart) 
Allegheny Energy Inc (Google  Yahoo  Earnings  Chart) 
Best Buy Co Inc (Google  Yahoo  Earnings  Chart) 
Biogen Idec Inc (Google  Yahoo  Earnings  Chart) 
Bank Of New York Co Inc (Google  Yahoo  Earnings  Chart) 
Peabody Energy (Google  Yahoo  Earnings  Chart) 
Commerce Bancorp Inc Nj (Google  Yahoo  Earnings  Chart) 
Coca-Cola Enterprises (Google  Yahoo  Earnings  Chart) 
Constellation Energy Grp (Google  Yahoo  Earnings  Chart) 
Ciena Corporation (Google  Yahoo  Earnings  Chart) 
Colgate-Palmolive Co (Google  Yahoo  Earnings  Chart) 
Cme Group Inc (Google  Yahoo  Earnings  Chart) 
Consol Energy Inc (Google  Yahoo  Earnings  Chart) 
Costco Wholesale Corp (Google  Yahoo  Earnings  Chart) 
Dominion Resources Inc (Google  Yahoo  Earnings  Chart) 
Deere & Co (Google  Yahoo  Earnings  Chart) 
Danaher Corp (Google  Yahoo  Earnings  Chart) 
Ecolab Inc (Google  Yahoo  Earnings  Chart) 
Emerson Electric Co (Google  Yahoo  Earnings  Chart) 
Eog Resources Inc (Google  Yahoo  Earnings  Chart) 
Express Scripts Inc (Google  Yahoo  Earnings  Chart) 
Entergy Corp (Google  Yahoo  Earnings  Chart) 
Expedia Inc (Google  Yahoo  Earnings  Chart) 
Fluor Corp (New) (Google  Yahoo  Earnings  Chart) 
Fpl Group Inc (Google  Yahoo  Earnings  Chart) 
General Dynamics Corp (Google  Yahoo  Earnings  Chart) 
Genzyme Corporation (Google  Yahoo  Earnings  Chart) 
Gilead Sciences Inc (Google  Yahoo  Earnings  Chart) 
Google (Google  Yahoo  Earnings  Chart) 
Gap Inc (Google  Yahoo  Earnings  Chart) 
Goodrich Corp (Google  Yahoo  Earnings  Chart) 
Hudson City Bancorp Inc (Google  Yahoo  Earnings  Chart) 
Hess Corp (Google  Yahoo  Earnings  Chart) 
Hospira Inc (Google  Yahoo  Earnings  Chart) 
Humana Inc (Google  Yahoo  Earnings  Chart) 
Intercontinental Exchange Inc (Google  Yahoo  Earnings  Chart) 
International Game Technology (Google  Yahoo  Earnings  Chart) 
Jacobs Engineering Group (Google  Yahoo  Earnings  Chart) 
Janus Capital Group Inc (Google  Yahoo  Earnings  Chart) 
Coca-Cola Co (Google  Yahoo  Earnings  Chart) 
L-3 Communications Hldgs (Google  Yahoo  Earnings  Chart) 
Lockheed Martin Corp (Google  Yahoo  Earnings  Chart) 
Leucadia National Corp (Google  Yahoo  Earnings  Chart) 
Mcdonalds Corp (Google  Yahoo  Earnings  Chart) 
Mckesson Corp (Google  Yahoo  Earnings  Chart) 
Medco Health Solutions (Google  Yahoo  Earnings  Chart) 
Millipore Corp (Google  Yahoo  Earnings  Chart) 
Altria Group Inc (Google  Yahoo  Earnings  Chart) 
Monsanto Co (Google  Yahoo  Earnings  Chart) 
Merck & Co (Google  Yahoo  Earnings  Chart) 
Microsoft Corp (Google  Yahoo  Earnings  Chart) 
Murphy Oil Corp (Google  Yahoo  Earnings  Chart) 
Noble Energy Inc (Google  Yahoo  Earnings  Chart) 
Newmont Mining Corp (Google  Yahoo  Earnings  Chart) 
Nike Inc Cl B (Google  Yahoo  Earnings  Chart) 
National Oilwell Varco Inc (Google  Yahoo  Earnings  Chart) 
Northern Trust Corp (Google  Yahoo  Earnings  Chart) 
Nyse Euronext (Google  Yahoo  Earnings  Chart) 
Occidental Petro Cp (Google  Yahoo  Earnings  Chart) 
Pepsi Bottling Group Inc (Google  Yahoo  Earnings  Chart) 
Plum Creek Timber Reit (Google  Yahoo  Earnings  Chart) 
Precision Castparts Corp (Google  Yahoo  Earnings  Chart) 
Public Service Enterprise Group Inc (Google  Yahoo  Earnings  Chart) 
Pepsico Inc (Google  Yahoo  Earnings  Chart) 
Principal Financial Group (Google  Yahoo  Earnings  Chart) 
Procter & Gamble Co (Google  Yahoo  Earnings  Chart) 
Parker Hannifin Corp (Google  Yahoo  Earnings  Chart) 
Praxair Inc (Google  Yahoo  Earnings  Chart) 
Reynolds American Inc (Google  Yahoo  Earnings  Chart) 
Transocean Inc (Google  Yahoo  Earnings  Chart) 
Charles Schwab Corp (Google  Yahoo  Earnings  Chart) 
Sigma-Aldrich Corp (Google  Yahoo  Earnings  Chart) 
State Street Corp (Google  Yahoo  Earnings  Chart) 
Molson Coors Brewing Co (Google  Yahoo  Earnings  Chart) 
Tenet Healthcare Corp (Google  Yahoo  Earnings  Chart) 
Price T Rowe Group Inc (Google  Yahoo  Earnings  Chart) 
Textron Inc (Google  Yahoo  Earnings  Chart) 
UnitedHealth Group Inc. (Google  Yahoo  Earnings  Chart) 
Ust Inc (Google  Yahoo  Earnings  Chart) 
Varian Medical Systems Inc (Google  Yahoo  Earnings  Chart) 
Verisign Inc (Google  Yahoo  Earnings  Chart) 
Waters Corp (Google  Yahoo  Earnings  Chart) 
Memc Electronic Material (Google  Yahoo  Earnings  Chart) 
Western Union Company (Google  Yahoo  Earnings  Chart) 
Xcel Energy Inc (Google  Yahoo  Earnings  Chart) 
Yum! Brands Inc (Google  Yahoo  Earnings  Chart) 

Bottom Sectors

Office Supplies
Trucks & Other Vehicles
Regional-Southeast Banks
Savings & Loans
Credit Services
Closed-End Fund-Debt
Surety & Title Insurance
Reit-Office
Mortgage Investment
Residential Construction
Manufactured Housing
Sporting Activities
Department Stores
Home Improvement Stores
Sporting Goods Stores
Jewelry Stores
Wholesale - Other
Rental & Leasing Services
Trucking
Networking & Comm Dev
Information Technology Service
Semiconductor-Broadline
Semiconductor-Memory Chips
Printed Circuit Boards

Many of these are bouncing back due to short covering and bargain hunting.

Top Sectors

Agricultural Chemicals
Steel & Iron
Nonmetallic Mineral Mining
Personal Products
Cleaning Products
Food-Major Diversified
Farm Products
Processed & Packaged Goods
Beverages-Soft Drinks
-Tobacco-
Cigarettes
Tobacco Products - Other
Accident & Health Insurance
Reit-Healthcare Facilities
Hospitals
Farm & Construction Machinery
Education & Training Services
Diversified Electronics
Scientific & Technical Instr
Telecom Services-Foreign
-Internet-
Internet Service Providers
Internet Information Providers
Electric Utilities

A mixed picture with defensive sectors rallying.

Subprime laughs

A reader sent this link. Enjoy.