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Saturday, May 15, 2010

IBD 100

Despite big losses toward the end of the week, the IBD 100 did quite well, with only 6 stocks negative dor the week. IPXL was the biggest gainer at nearly 20%. This was one of the stocks affected by the "flash crash", but the day after that it broke the 50dma on higher than average volume, a sign of weakness (the blue arrow signifies last Friday's candle). Instead of weakening, it gapped up big on Monday. Most encouraging about this stock is that it refused to collapse yesterday. Price relative is quite strong and rising, ATR is still too high but dropping.

MED was the second biggest gainer. This is in the unfortunate postion of forming a potential double top, and is showing that there is resistance at that point. I would like to see price relative a little higher than it is now, CMF is declining a bit, and ATR is too high. I suspect this may be ready to give up it's leadership role, at least for a while

IDSA was the biggest decliner, but at -3.2% that's not much of a decline, and this is starting to look like a base in the process of forming. When this correction ends, this could be one of the first out of the gate. This could be one in the beginning stages of a long term groth process, or it could be a flash in the pan, I would give it some time to see how it trades for a while.

VLTR was the second biggest decliner, and it's done for a while. It has all the classic bearish characteristics: a break of the 50dma on high volume, a bounce on declining volume and subsequent failure on the retest. It has support in the area where the 200dma is now. That is the area where we will find out is this is building a base, or if it is done as a leader.

With the market in a correction, this is the time to find out which ones are going to hold up best, and which one will lead us out when the correction ends. I plan on being on top of it when it happens.

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