The major market averages closed about breakeven after being down for much of the day. A number of leading stocks got hit hard, but within the context of sharp prior upside moves in many leading stocks, such pullbacks are not necessarily abnormal. Investors should simply adhere to their stops and trailing stops. News that China exports plunged 18.1% was cited as a catalyst for yesterday's early weakness in U.S. markets and serves as additional evidence that the world's second-largest economy is still having difficulties.
There was also negative news about record high margin debt which is the amount of cash investors are borrowing to invest in stocks. While very high levels of margin debt signal overly optimistic sentiment, in this environment of quantitative easing, overbought and prolonged rallies can become even more overbought, so keep a close eye on the price/volume action of your stocks and leading indices.
Biotech Alexion Pharmaceuticlas (ALXN) traded enough volume yesterday for a pocket pivot on news that the company had finalized reimbursement discussions for their one drug, Soliris, with France Earnings and sales are accelerating, pretax margin 42.9%, ROE 28.7%, group rank 2. ALXN had a buyable gap up recently on which we reported.
LED semiconductor company Veeco Instruments (VECO) had a buyable gap-up yesterday. The company is a turnaround story in the LED field, and yesterday's gap-up move took the stock out of a nine-month base. The stock is within range of the 41.87 intraday low of yesterday's BGU. VECO is expected to take annual earnings from a loss of 7 cents in 2014 to $1.33 in 2015 and then $2.03 in 2016.
Tesla Motors (TSLA) is trading lower by about 1% this morning at the time of this writing as the stock continues to lose momentum. Investors should watch for support to hold at the intraday low of the February 24th buyable gap-up at 228.45 and the 20-day moving average, currently at 228.06.