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MLR - Premarket Pulse February 13, 2013

In a relatively quiet day, the general market closed closed mixed on somewhat higher volume with the S&P 500 once again hitting a 5-year high. The NASDAQ took a back seat once again as Apple (AAPL) again weighed on the index.

Home-building stocks, which had been pulling back over the past couple of weeks, all found support at and bounced off of their 50-day moving averages, although volume was mixed on a stock-by-stock basis. D.R. Horton (DHI) remains the strongest homebuilder following its buyable gap-up on January 29th, which we reported on at that time, and the stock moved to a higher closing high, in fact a six-year high, yesterday as the group moved up in synchrony.

Invensense (INVN), after issuing a pocket pivot buy point on Monday, moved sharply higher intra-day yesterday but was unable to maintain its gains and reversed on very heavy volume to close down on the day. In our view, investors who didn't sell before Tuesday's close should sell on Wednesday's open as high volume reversals are generally bearish patterns. It is possible that INVN began to move on Monday as a result of talk of Apple announcing a new wrist-watch product, a sort of "iWatch." The small size of such a product would likely make INVN's smaller, more energy efficient motion-sensor chips more attractive in manufacturing an "iWatch," and the stock may have been rallying yesterday because of Apple CEO Tim Cook's appearance at a Goldman Sachs conference. Buyers of INVN yesterday may have been looking for such an announcement, but we noted that once Cook's talk was over INVN immediately began to give up its sharp gains from earlier in the day yesterday. This is solely our own conjecture, and has not been confirmed in any other media reports that we've seen.

KORS had a buyable gap up after a strong earnings report. We have reported on KORS in prior reports, most recently on Feb 5 when it had a pocket pivot (see https://www.virtueofselfishinvesting.com/reports). Given KORS weaker close at the lows of its trading range yesterday, VoSI members should refer to our reports from yesterday where we outline the conditions under which we would consider the stock a solid sell. Investors who bought the stock higher within yesterday's trading range, say at 64 or better, must consider what their own downside stops are for the stock given their own expectations for the trade, position size, and average cost if one had purchased shares on the pocket pivot buy point of last Tuesday, February 5.

This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (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. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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