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Market Lab Report - Focus List Review for the Week Ended February 27, 2017

Published : February 20 2017 at 15:24 ET

Current VoSI Focus List

The VoSI Focus List is a compilation and reference list of stocks for which Pocket Pivot or Buyable Gap-Up Reports have been issued. It is not intended as a "buy list" or a list of immediately actionable recommendations. Stocks on the list may or may not be in proper buy positions, and investors should exercise discretion and proper judgement in determining when and where stocks on the Focus List can be purchased. The following notes are intended to assist in this process. Please note that members can enlarge the Focus List image by clicking on the body of the email and then holding the Control Key while pressing the "+" key until it is large enough to read.

General Observations:

The major market indexes, the Dow, the S&P 500 and the NASDAQ Composite, again ended the week at all-time highs. As we pointed out last weekend, we do not base our expectations for the market on measures of sentiment or alleged "complacency" or even the number of days the market has not posted a pullback of 1% or more. These are moot points, and as we wrote last week, "Markets can often continue rallying even in the face of 'extremes' in sentiment or even the number of days over which the market has not pulled back some specified percentage." Indeed, overbought often can become more overbought as the trend persists.

The market proved out point this past week by moving higher, as the NASDAQ continues its sharp upside trend and the Dow and the S&P 500 form tight bull flags. Remember that indexes don't have to pull back in order to consolidate prior gains - they can simply move tight sideways. It is best to focus on the action of individual, leading stocks and conduct one's operations on the basis of what the stocks' individual price/volume action is telling you.

Removed from the List this Week: No stocks were removed from the list this week. Argan (AGX) will likely be removed this coming week if it cannot quickly regain the 50-day moving average. This does not imply one would still be holding this stock especially in light of its weak, low volume rally off its 50-day moving average from Feb 3-10 or its first-time close below its 50-day moving average on Feb 13. On the other hand, if one still holds a partial or full position because they bought it when we first reported on this stock in early November, read below.

Focus List Stocks Expected to Report Earnings this Week:

Square (SQ) (2/22 AH (after hours). 

Notable Action

Argan (AGX) broke below its 50-day moving average on Monday and has rallied back up into the line as of Friday. We would be inclined to use this as a selling opportunity and lock in the nice profit gained since we first reported on the stock in early November. Otherwise one could wait to see if the "Ugly Duckling Principle" comes into play and AGX is able to move back above the 50-day line, so this should be monitored closely.

Amazon.com (AMZN) is on the verge of breaking out, and in fact posted a new closing high on Friday on its third five-day pocket pivot volume signature over the past five trading days.

Alibaba (BABA) is sitting right on top of its 20-dema and just above the 99.94 intraday low of its January 24th buyable gap-up. This puts the stock in a lower-risk entry here using the 99.94 price level as your selling guide.

Barracuda Networks (CUDA) is holding tight within its base and again successfully tested its 50-day line on Friday as volume dried up. This looks buyable within the base, using the 50-day line as a selling guide.

 

Facebook (FB) is holding tight along the 10-day line as volume dries up. While the stock could hold and move higher from here, a pullback to the 20-dema, just 2% lower, would provide a more opportunistic entry point should that occur. We suppose buying it here or at the 20-dema depends on whether one wants to quibble over 2%.

Fortinet (FTNT) remains within buying range of last week's buyable gap-up, and is holding very tight on the weekly chart over the past two weeks.

Mosaic (MOS) found support at its 10-day line on Friday, and is buyable here using the line as a selling guide. Remember that as a commodity-related stock, MOS will tend to trade in a wider band, therefore looking to buy on weakness such as we suggested on Friday's pullback to the 10-day line is preferred.

Netflix (NFLX) is sitting in the zone between its 10-dma and 20-dema lines as it finds consistent support along the 20-dema. This comes after failing on a pocket pivot breakout attempt the prior week. We would consider this buyable here using the 20-dema as a tight selling guide.

Nvidia (NVDA) is attempting to hold its 50-day moving average, which has served as a solid level of support for the stock throughout the huge price move it had through 2016 since we first reported on it back in April of last year at the "bargain" price of 35.80. Failure may indicate at least a near-term top for the stock.

Quantenna Communications (QTNA) found support at its 10-dmaand 20-dema lines on Friday. This comes after a strong gap-up move following earnings on Tuesday. QTNA is a thinner name, so is always best bought on constructive weakness. We like the stock here, or even on any further drifting back into the 10-day or 20-dema lines.

Square (SQ) recovered in classic Ugly Duckling Fashion on Friday after breaking to a lower-low on Thursday. The stock posted a strong-volume pocket pivot as it regained the 50-day line. Earnings, however, are due out on Wednesday, February 22nd, after hours.

U.S. Steel (X) and Zions Bancorp (ZION) are both within buying range of recent base breakouts.

Remember that members who have a question regarding any name or names on the Focus List can email us at support@virtueofselfishinvesting.com. We are always happy to answer your questions!


This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2017 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.