MLR - PMP 1/7/14

Published : January 7 2014 at 9:26 ET

The major averages fell on higher volume. While the number of distribution days has been piling up, 2013 saw a number of periods where such pile ups occurred only to see the market quickly find its footing then head higher, as quantitative easing on full blast helped to keep a floor under the market. Futures are up this morning, and despite yesterday's weak index action, a number of leading stocks showed positive signs, some following up on strong action or pocket pivots we have reported on in recent days.

Identity theft protection company Lifelock (LOCK) had a pocket pivot as it rounds out the lows of a potential new base. LOCK's group rank is 38, earnings have shot higher over recent quarters, institutional sponsorship has climbed higher since the company went public 4 quarters ago, and the company gapped higher on its prior earnings report on an initial show of strength.

Yelp (YELP) had a pocket pivot yesterday as it also comes up the right side of a new base. Group rank is a strong #3, and institutional sponsorship has increased since the company went public 8 quarters ago.

Global Eagle Entertainment (ENT) had a pocket pivot. ENT is a competitor of GOGO as it too provides wifi access for commercial airline passengers. Earnings are sales are greatly accelerating, group rank 15. Keep in mind ENT is a small cap stock so on the thin side.

Align Technology (ALGN) had a pocket pivot breakout from a 10-week base. The stock hit an all-time closing high yesterday on strong volume. ALGN's group rank is 21, and earnings and sales are increasing. ALGN gapped up on its prior earnings report.

Solar City (SCTY) had a buyable gap up. We have reported on SCTY's previous pocket pivots in the pattern on December 17, December 19, and January 2 that preceded yesterday' buyable gap-up move.

Chinese provider of real estate marketing Soufun (SFUN) had a subtle pocket pivot coming off a short six-day flag along the 10-day moving average. Group rank 3, pretax margin 51.4%, ROE 125%, and earnings and sales are robust.

Vacation rental online marketplace provider Homeaway (AWAY) had a pocket pivot yesterday as it pulls down along its 10-day moving average within an eight-day flag formation. AWAY's group rank is a strong #31, while institutional sponsorship has grown steadily over the last 6 quarters.

Workday (WDAY) broke out of a cup-with-handle formation yesterday on strong volume. We previously reported on WDAY when it had a pocket pivot on December 20.

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