Tag Archives: market lab report

MLR – PMP 2/25/15

Major averages rose yesterday on mixed volume, closing yet again near intraday highs. The number of quality stocks performing well has been ample expressing healthy market internals. Federal Reserve Chairwoman Yellen’s testimony said rates would not rise for at least the next two Fed meetings. While Yellen said the Fed would soon drop the word “patient” from its forward guidance which normally would have caused great concern, Yellen reiterated that the Fed wasn’t on automatic pilot and only wanted the flexibility to move “on a meeting-by-meeting basis”, thus softening the blow with several dovish comments that suggest the Fed is in no hurry to raise rates. Yellen has always been perceived to be in the dovish camp when it comes to rate hikes. Thus markets believe that rates will only be raised once she sees ample evidence of an economy that has truly turned the corner. Of course, this could come much further down the line than expected, in which case, rate hikes would have to wait. Semiconductor Qorvo (QRVO) had a pocket pivot yesterday. Earnings are skyrocketing, sales are accelerating, group rank 7. Server system manufacturer Super Micro Computer (SMCI) had a pocket pivot off its 10-day moving average. Strong earnings and sales, institutional sponsorship has grown last 6 quarters, group rank 44. This is a thinner name so subject to greater volatility as it is no stranger to testing its 50dma. Biotech United Therapeutics (UTHR) had a pocket pivot on a strong earnings report. It had traded lower during the day but then had a strong upside reversal. Internals are particularly strong with pretax margin 58.9%, ROE 46.6%, group rank 1. Its latest drug Orenitram that treats high blood pressure has all star potential as sales have been particular strong and should continue to accelerate strongly should it pass further regulatory hurdles. Solar stocks were on fire yesterday with First Solar (FSLR) and Sunpower (SPWR) gapping on huge volume. The two companies announced the formation of a joint Yieldco that could eventually be spun off as an IPO. Both companies also announced earnings yesterday after the close, and both are looking to open up slightly after yesterday’s huge-volume gap-up moves. In this market, unorthodox gap-ups like these have been able to move higher, as evidenced by such BGU’s in names like Twitter (TWTR), Netflix (NFLX), and Amazon.com (AMZN), to name a few. Treating the moves in FSLR and SPWR as BGUs might be feasible here with SPWR the stronger of the two given that it a) closed near the peak of its daily trading range, and b) has cleared its 200-day moving average.

MLR – PMP 2/24/15

Major averages finished near break-even after trading lower for much of the day. Volume was lower. This is the ninth straight gain for the NASDAQ Composite, a feat not seen in roughly 4 1/2 years. Indeed, over the last several trading days, the majors have had a tendency to close at or near their intraday highs, a sign of support. Quality stocks continue to show strength overall. Medivation (MDVN) continued higher after its pocket pivot while CyberArk Software (CYBR) reversed course on record volume after it was downgraded. That said, analysts that downgrade a stock simply on overextended valuations often get it wrong as strength begets strength such that stocks that appear “too high” often go on to make further appreciable gains. So while competitor Palo Alto Networks’ (PANW) addressable market is nearly five times larger than CYBR’s market, market valuation of CYBR even at CYBR’s “extended” price is less than one-sixth that of PANW, suggesting that CYBR has room to grow. Further, some analysts say the group is hard to value. But as we have said many times before, when you have profits in a short time in this market environment, take them. In other action, Taser International (TASR) and airline Virgin America (VA) had very subtle pocket pivots within their current bases.

MLR – PMP 2/23/15

Major averages moved to new highs Friday on higher volume, overcoming early weakness. The opportunities remain on the long side with leading stocks such as CYBR, LCI, FB, and others continuing to streak higher. Pocket pivots and buyable gap ups have been key over the current and prior market cycles, even though some of our competition do not follow either. Yet, as we wrote to our members on Friday before the market opened: “…the market is all about being in the right stocks at the right time, and huge opportunities have been seen in names that we have issued reports on or discussed in our webinars, such as CyberArk Software (CYBR), up well over 50% since we first issued a Pocket Pivot Report on the stock, and Intrexon (XON), which was discussed in our webinars when it was setting up along the 30 price level. So while one can fret about what the indexes might or might not do, the fact remains that it is possible to make strong progress in this market IF one is in the right stocks, end of story.” So as we’ve always said, the opportunity of a lifetime often comes around every few weeks if one remains vigilant and open to opportunities as they emerge in real-time. The question now is where the next big opportunities lie, but it is likely they will emerge in the same manner as others have in this market via more subtle buy points like pocket pivots or buyable gap-ups. As long as the market rally remains intact we expect more to emerge along the way, and we will issue our real-time reports in response to the next wave of opportunities as they become evident according to the alternative buying techniques we employ.