Market Lab Report - Premarket Pulse 11/5/15

Published : November 5 2015 at 8:50 ET
Major averages fell mildly on mixed volume. So far the indexes have not shown any tendency to pull back more than a couple of days before pushing to higher highs, and larger-cap names that have issued buy signals over the past few weeks following earnings have continued to act well and move higher. With the Russell 2000 now joining the party as it pushes to higher highs and approaches its 200-day moving average, more smaller- to mid-cap names are starting to participate. With US Fed Chairperson Yellen saying there is a "live possibility" of a rate hike in December, CME FedWatch now places the odds of a rate hike at 56% at that next meeting.

A few new actionable names hit our screens yesterday. Keep in mind that while the number of such stocks over the last several days has been sizeable, a number of them are not moving higher despite the uptrending market. This is a yellow flag that warrants caution as not all cylinders are firing as they should. Instead, institutional money is flowing primarily into the risk-off, largest cap names as witnessed by the NASDAQ-100 being the first index to hit new highs.

Information technology hardware and software product maker CDW Corp. (CDW) had a pocket pivot yesterday on a strong earnings report. Earnings are accelerating, ROE 49.7%, institutional sponsorship has grown in every quarter since the company went public 10 quarters ago, group rank 5.

Web-based and mobile fleet management software maker Fleetmatics Group (FLTX) gapped up yesterday on a strong earnings report, then fell but then returned to its gap up price at which time this report was sent. Pretax margin 21.9%, group rank 21.

Cloud-based human capital management software maker Paycom Software (PAYC) had a buyable gap up yesterday on a strong earnings report. ROE 24.1%, Earnings and sales are soaring, institutional sponsorship has grown over the last 3 quarters, group rank 21.

Facebook (FB) is gapping up this morning after beating on earnings last night. We will be monitoring this for a possible buyable gap-up, and issue a report as appropriate.

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