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Saturday, September 25, 2010

IBD 100

The IBD 100 had another big week, significantly outperforming the market. TIBX was the big gainer for the week, after gapping up on earnings yesterday. It had already broken out of a pattern almost a month earlier, and putting a fibonacci grid over that breakout point and the very hallow pullback it had last week, you come up with a target of 18.70, which it hit in one day. Last Friday (blue arrow) it was nowhere near a buy point, and probably isn't now. This could pull in to fill the gap, or it could turn into a break away gap that never lets you in. Price relative has been steadily rising for 6 months now, and is one of the stronger stocks in the market at the moment.

NFLX was the second biggest gainer, and last Friday gave what turned out to be a perfect entry point. This is one of those "buy the dip patterns", and as i calculate it, the support level here for the next pullback should be about 155.  This fell apart on earnings back in July, which I though was it's end as a leading stock, but that lasted only a week, and here it is leading the market again.


FN has been trading barely long enough to have a 50dma, wo why it is on the IBD 100 is beyond me. It has not been trading long enough to develop a real chart pattern, although it has established somewhat a trading range, whichn it is right in the middle of now. I wouldn't go near it unless it bounced off the bottom of the range or broke out through the top. It was the biggest decliner on the IBD 100 last week.



STRI was the second biggest decliner, also a recent IPO that has at least started to develop a 200dma, which it bounced off of this week. Thus has a weak price relative line, is quite volatile, an well below the 50dma. This might be a good speculative play with a small position, but otherwise it's radioactive as far as I'm concerned.

I don't have the distribution day count yet, but I believe it is at 2 for the SPX and Nasdaq. With the performance we are seeing from the IBD 100, I don't expect this rally to grind to a halt anytime soon.

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