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Saturday, November 21, 2009

IBD 100

LFT was last week's big gainer on the IBD 100. I believe I covered this earlier this week, as it did report earnings and broke out of a pretty poorly formed pattern. It looks like I forgot the arrow to marke ast Friday's close, so count back 6 candles to fnd it. The breakout was the best time to get in, as it has gone nearly straight up since then. Despite the name, this is a software company, and Chinese, a theme that was picked up today in the "Inside the 100" column in today's IBD.

MFW was lat week's secind biggest gainer. I guess you could call this a base, as it spent months riding along the 50dma. CMF stayed awfuully low during that time, and price relative was dropping. It formed the right side of the base, then I suppose you could say it formed a deep handle. Interpreting the chart this way, the breakout point would be 24.88. After breaking the 50dma again, it went virtually straight up, and shows no signs of relenting. O'Neil does not like "straight off the bottom" breakouts, and this one could collapse at any time.

EBIX was the biggest decliner. This appeared to be in the process of forming a base when it got hit with some high volume selling. It has yet to find a support level and could go all the way to the 200dma. 45 looks like an important pivot point, so it could find support there as well. However, this one hjas "don't touch me" written all over it, and probably will for a while.

VPRT was the second biggest decliner, although IBD has it third (they have BMA first and EBIX second. I will have to double check that). Often the chart of the second biggest decliner is the most bullish looking, and this week it's close. This did break the 50dma, but in the last few months that has not proved to be a negative. There is a "head and shoulders" but probably way too short to be significant. However, this does appear to be hitting a short term top.

IBD has the market pulse at "under pressure", so they trust this market about as much as I do.
The distribution day count is 3 for the Nasdaq, SPX, and NYSE composite, 2 for the Dow. Normally this wouldn't be enough to hit the panic button, but this much distribution following so closely after a follow through day (November 9) is cause for alarm.

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