MLR - Premarket Pulse May 9, 2013

Published : May 9 2013 at 9:03 ET

Same story, different day: the major averages once again moved higher, this time on increasing volume. The NASDAQ Composite and S&P 500 are ascending with greater relativel strength as quantitative easing continues and a dearth of bad news prevents the general markets from being dragged down, even temporarily.

Santarus (SNTS), which produces drugs that treat gastrointestinal conditions, had another buyable gap up on strong earnings Tuesday, and yesterday drifted in to close one cent below the intra-day low of iits buyable gap-up day's intra-day trading range. We reported on its prior BGU on March 5 after it released a strong earnings report (see archives). Earnings and sales continue to accelerate strongly, and institutional sponsorship has increased over the last 6 quarters.

Actionable buy points appear to be coming mostly in the form of gap-up moves following earnings, and over recent days we've seen such moves in stocks like Electronic Arts (EA), Whole Foods Market (WFM), Fossil (FOSL), and Tesla Motors (TSLA). In some cases quality is an issue, but from a technical standpoint a buyable gap-up operates on the basis of a strict set of price and volume parameters, thus it is always a simple matter to test any gap-up move that meets the criteria of a buyable gap-up. In most cases, adhering to the basic selling rules for a buyable gap-up should keep losses to a minimum once a clear intra-day low on the buyable gap-up day can be determined. We receive many questions regarding any number of stocks showing such action on any given day, but often the "quality" issue causes us to refrain from sending a report out on these. However, members who feel they understand a stock's story well enough to test a buyable gap-up type of move on the long side can certainly do so when the correct parameters are met, as long as they understand the basic and very clear selling rules for buying into such a move.

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.