The IBD kind stocks with earnings momentum are having breakouts | stockbee

6/08/2009

The IBD kind stocks with earnings momentum are having breakouts


Market Monitor  




TypeIndicatorValue
Daily# of Stocks Up >4% on high volume222
Daily# of stocks down >4% on high volume   145
Primary# of stocks up >25% in a quarter3362  
Primary# of stocks down >25% in a quarter241
Secondary#of stocks up >50% in a month38
Secondary#of stocks down >50% in a month2
Secondary#of stocks up >25% in a month276
Secondary#of stocks down >25% in a month25
Primary fast   MM 34/13 + 2960
Primary Fast   MM 34/13 - 605

  • The readings on Market Monitor continue to indicate a market with excellent breadth, but at levels where a dip is possibility. 
  • In recent weeks there has been a distinct shift in kind of stocks breaking out. In the first phase of rebound stocks with value characters were breaking out. Due to a big drop in market, many stocks were at compelling valuation levels and they were the first one to bounce back. Along with them turnaround prospect stocks had big bounces. 
  • In recent weeks the focus seems to be shifting to the growth stocks. The IBD kind stocks with earnings momentum are having breakouts and are following through on the breakouts. Growth stocks leading a move is always a good sign. 
  • We will soon be in pre announcement season and market will shift its focus to next earnings season. In last earnings season stocks which beat expectations were very well rewarded . often gapping up 10 to 20% on earnings day and following through for next couple of weeks. Most of them have since gone sideways or had mild pullback. Some of these will start having pre earnings  announcement drift.  
  • So in terms of trade opportunities we have lot of stocks which are setting up for next up leg. These are the stocks which are  showing up in our various methods scans currently. 
  • During the last one month there were 684 stocks which had Episodic Pivots . If we eliminate stocks with less than 5 million dollar volume out of that we get around 325 stocks. To get these stocks just use the Episodic Pivots Month scan detailed in the Episodic Pivots  method.  Episodic Pivots (EP) also offers opportunity to enter later after a pullback. To find out such opportunities you need to monitor Episodic Pivots for a month or so. Many time a stock will have a big move of 40 to 100% post EP in 5 to 10 days and then it will retrace 30 to 40% and then there will be second move of 20 to 40%. If you use some elbow grease and go through the 325 stocks daily you can find lot of pullback opportunities and enter in anticipation of a breakout. Or you can use our standard breakout scan and select stocks out of the list. If you run the scan today on EP month universe you get 34 stocks. Out of that most of the best breakouts are already our current open positions. 
  • If you do not take in to consideration the positions opened in last few days then  in our  currently open positions we have following profits:
    • GMCR:43%
    • STEC:36%
    • BPI: 26%
    • GIII: 37%
    • PMI:22% 
  • So currently there are abundance of stocks with 20 and 50% plus profit potential. In such a environment if a open position  is moving slowly, it is better to move out of it and get in to a new Episodic Pivot with better prospect. That is why I closed some of the positions with small profit or small loss and moved in to new better prospects.  





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