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MLR - Premarket Pulse March 6, 2013

The major averages all moved to higher-highs with the S&P 500 making new five-year highs and the Dow making new all-time highs. The higher volume traded on the NASDAQ Composite combined with a move of at least 1.3%, the current threshold level we are using to measure a follow-through day, now puts the market back into a confirmed uptrend on the sixth day of the rally attempt off the lows of last Tuesday, switching the Market Direction Model into a buy signal.

With the market making higher-highs the short side is off the table. Alexion Pharmaceuticals (ALXN) moved up through the 90 resistance level which we viewed as a tight upside stop, while Apple (AAPL) has found support near the top of a prior base it formed in late 2011. In our view, if the market continues to rally this will likely serve as a short- to intermediate-term level of support, but should the market roll over again the odds of AAPL moving lower increase. Until and unless this rally fails, we consider the short side of the market to present opportunity costs given that the long side will likely be more productive.

Investors seeking to re-enter the market on the long side need only wait for proper buy points to emerge, and we would expect that a successful continuation of the market's rally phase will produce such buy points in leading stocks along the way. Yesterday, proton pump inhibitor prescription company Santaurus (SNTS) issued a buyable gap up on a strong earnings report. Because it is a thinner small-cap stock, caution should be exercised, but the buyable gap-up is actionable using the 14.70 intra-day low of yesterday's gap-up day as a selling guide. SNTS' earnings and sales growth is quite robust, with earnings up 1200% and 167% over the past two quarters. Institutional sponsorship has expanded steadily over the past five quarters, with a peak number of mutual funds owning the stock in the most recently reported period.

Expedia (EXPE) also flashed a pocket pivot buy point yesterday, and while its earnings growth is relatively tepid at 9% in the most recent quarter, we note that strength in the group is confirmed by the action in Trip Advisor (TRIP) and Priceline.com (PCLN)

Members should watch for more real-time alerts as buy points in leading stock emerge and become actionable.

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. ©2021 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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