MLR - PMP 7/16/13

Published : July 16 2013 at 8:30 ET

Major averages were up fractionally on lower volume, continuing their uptrend. The S&P 500 inched up to another new closing high for its eighth straight up day, marking its longest winning streak since January.

In economic news, growth for the world's second-largest economy, China, slowed to 7.5% in the second quarter, down from 7.7% growth in the first quarter. In the U.S., retail sales rose 0.4% in June, or less than half of expectations. Slow growth means the Fed is more than likely to keep quantitative easing flowing at full tilt for a longer period.

Vipshop Holdings (VIPS), after a sharp double bottom, had a pocket pivot in yesterday's trade as it cleared its 50-day moving average as it approaches a potential breakout from a narrow double-bottom formation. Volatility in the stock has increased after its prior top so investors should so position size accordingly. On the positive side, VIPS has a lot of upside momentum, earnings and sales are skyrocketing, its group rank is strong at #16, and institutional sponsorship has grown since the company went public 5 quarters ago.

Acadia Pharmaceuticals (ACAD) broke out on a pocket move to new highs. The high volume on May 28 is exaggerated due to Russell Index rebalancing so can be adjusted. Keep in mind this is a smaller-cap biotech name with no earnings and scant sales so position size accordingly.

The solar stocks remain strong as the #1 industry group. First Solar (FSLR) appears to be trying to round out the lows of a new base as it cleared its 50-day moving average with a pocket pivot buy point. Institutional sponsorship has increased over the last 3 quarters. The price/volume action leading up to today's pocket pivot is somewhat defective, so the stock may need to back and fill for a bit before going higher, but we would expect it to hold above the 50-day moving average.

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