MLR - PMP 1/9/14

Published : January 9 2014 at 8:39 ET

The major market averages were mixed but the uptrend remains intact as the NASDAQ Composite has taken the lead among the leading indexes. A literal blizzard of pocket pivots and other buy points have emerged since the start of the year as we have reported in our real-time reports, and one would have to conclude that this is highly constructive for the continuation of the market rally 2014.

Leaders issuing buy signals yesterday include the following:

Finisar (FNSR) had a pocket pivot. Its earnings skyrocketed in the latest reported quarter, up 187% and sales are also accelerating. FNSR is attempting to come up the right side of a new base.

Taser International (TASR) had a buyable gap up yesterday. It is actionable but, however, there are some caveats to consider. It's earnings and sales are looking relatively flat with earnings down in the coming quarters. The last time it gapped up was on earnings and then it went nowhere. It is also a relatively thin stock. On the upside, it is breaking out of its base, group rank 11, and it gapped up out of a constructive formation through its 50dma. Its weekly chart is quite clean with solid price momentum Yesterday's move took the stock to the top of its current base where it found resistance.

Biogen Idec (BIIB) emerged from a long period of relatively quiet downside drifting following its buyable gap-up of late November to log another pocket pivot within its base. It has managed to stay above its 50-day moving average after its recent buyable gap up. It undercut the low by 1.6% so one could have elected to stay in the position. On the other hand, since it was moving sideways, albeit constructively, one could have sold part of all of their position to make room for a potentially stronger stock.

Chinese online automobile dealer/provider BitautoHoldings (BITA) had a pocket pivot. Earnings are accelerating strongly, group rank 4. The stock has managed to obey its 50-day moving average while forming its current base.

Chinese internet security and search site Qihoo 360 Technology (QIHU) had a BGU through its 50dma after a constructive consolidation. Earnings and sales have strongly accelerated into triple digits, institutional sponsorship has increased over the last 5 quarters, group rank 4, pretax margin 34.4%. QIHU is gapping down slightly pre-open as it tests the 85 intra-day low of yesterday's BGU day.

The bio-tech/medical group had a number of pocket pivots yesterday, including:

NPS Pharmaceuticals (NPSP) - group rank 13, ROE 37.2%, earnings and sales accelerating, high volume reversal to the upside.

Isis Pharmaceuticals (ISIS) - group rank 13, earnings and sales are erratic, but it can be forgiven since it is a drug development company with 20 drugs in its pipeline. More importantly is its uptrend, albeit very erratic, as it violates its 50-day moving average regularly, so please account for this erratic action when position sizing/pyramiding.

Ligand Pharmaceuticals (LGND) - group rank 13, earnings and sales accelerating strongly, small cap.

Endo Health Solutions (ENDP) - earnings and sales are flat but group rank 8, ROE 39.3%, and the company gapped up on its prior earnings report.

Las Vegas casino operator Las Vegas Sands (LVS) - earnings and sales accelerating strongly, group rank 12, has managed to obey its 50dma for months. We initially reported on LVS' pocket pivot breakout in early December, and the stock has continued higher since then with yesterday's action constituting the first actionable continuation pocket pivot buy point in the pattern since then.

Semiconductor company Sandisk (SNDK) - a turnaround play, breaking out of a constructively flat base.

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