Despite under performing the market this wek, there were a lot of big gainers and few big losers on the IBD 100 last week. MELI was the biggest gainer, and is one of the 10 leadership stocks I have been tracking. Last Friday (blue arrow) sa it bouncing right off the 50dma, the ideal entry point. It appears to be formming another base (the O'Neil "base on base" pattern) and the price realtive line is flattening out, indicating that it is no longer leading, but is now following the market. If it continues base building, ideally I would like to see the ATR line dropping, and CMF holding firm as it is now.
CRUS was the second biggest gainer, and looks much the same as MELI, except the price relative is a little stronger, a positive, and the ATR is rising, which might be a negative. Another thing these two leaders have in common: a year ago they were ignored.
IBD has us in "confirmed rally" once again, and there does appear to be some stocks setting up for breakouts. The recent correction weeded out a lot of crap stocks from the leadershp ranks, and now is the time to find the ones that are holding up, because they will be the first out of the gate if this rally picks up steam.