MLR - PMP 2/25/15

Published : February 25 2015 at 9:15 ET

Major averages rose yesterday on mixed volume, closing yet again near intraday highs. The number of quality stocks performing well has been ample expressing healthy market internals. Federal Reserve Chairwoman Yellen's testimony said rates would not rise for at least the next two Fed meetings. While Yellen said the Fed would soon drop the word “patient” from its forward guidance which normally would have caused great concern, Yellen reiterated that the Fed wasn't on automatic pilot and only wanted the flexibility to move “on a meeting-by-meeting basis", thus softening the blow with several dovish comments that suggest the Fed is in no hurry to raise rates. Yellen has always been perceived to be in the dovish camp when it comes to rate hikes. Thus markets believe that rates will only be raised once she sees ample evidence of an economy that has truly turned the corner. Of course, this could come much further down the line than expected, in which case, rate hikes would have to wait.

Semiconductor Qorvo (QRVO) had a pocket pivot yesterday. Earnings are skyrocketing, sales are accelerating, group rank 7.

Server system manufacturer Super Micro Computer (SMCI) had a pocket pivot off its 10-day moving average. Strong earnings and sales, institutional sponsorship has grown last 6 quarters, group rank 44. This is a thinner name so subject to greater volatility as it is no stranger to testing its 50dma.

Biotech United Therapeutics (UTHR) had a pocket pivot on a strong earnings report. It had traded lower during the day but then had a strong upside reversal. Internals are particularly strong with pretax margin 58.9%, ROE 46.6%, group rank 1. Its latest drug Orenitram that treats high blood pressure has all star potential as sales have been particular strong and should continue to accelerate strongly should it pass further regulatory hurdles.

Solar stocks were on fire yesterday with First Solar (FSLR) and Sunpower (SPWR) gapping on huge volume. The two companies announced the formation of a joint Yieldco that could eventually be spun off as an IPO. Both companies also announced earnings yesterday after the close, and both are looking to open up slightly after yesterday's huge-volume gap-up moves. In this market, unorthodox gap-ups like these have been able to move higher, as evidenced by such BGU's in names like Twitter (TWTR), Netflix (NFLX), and (AMZN), to name a few. Treating the moves in FSLR and SPWR as BGUs might be feasible here with SPWR the stronger of the two given that it a) closed near the peak of its daily trading range, and b) has cleared its 200-day moving average.

This information is provided by Virtue of Selfish Investing, LLC (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, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.