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Charts courtesy of stockcharts.com

Saturday, July 23, 2011

Leader Charts

Fot the third week in a row, the market leaders are heavily skewed to one side or another (last week they took a big drop, this week  a big gain), which is a sign of a range bound, volatile market. The biggest gainer was ZAGG
, which is not surprising since this is one of the more volatile stocks on the list. It is finally starting to drop off in volume, and appears to be ready to put in a handle on the short base it just put in. Last Friday (blue arrow) this was climbing the right side of the base, but was a potential buy poin only in hindsight. This is still very early in the growth cycle, and really isn't suitable anything but short term trades, since there is no guarantee that the growth cycle will continue.


I keep trying to find reasons why AAPL can't go any higher, but it keeps doing it. I also try to find reasons to buy it, and I don't see any here. This had a pre-earnings breakout, which I won't touch, then formed the dreaded black candle when it did report. It has so far held the bottom of that gap, which may now be the bottom of a new trading range. If it keeps going up, I have a target of  409, bit at this point that is just a guess.


Another surprise: NFLX was the biggest decliner, but at about 4% is wasn't much of a decline  This is another one whose up trend is long in the tooth, but this one has the added fuel of high short interest. This is now pulling back to near the 50dma and ordinarily would be in a perfect buy point, but thsi should be reporting soon. The short sellers will eventually be right, but they will probably get squeezed a few more times before then.

IPGP was the second biggest decliner, and has been in a basing process for quite some time. It is now just under the 50dma, but volume is low so that is not a particularly bad situation. It has a well defined trading range, and has stayed in the upper half of that range for the last 3 months. ATR is jsut starting to drop, which usually is a good sign before a breakout attempt, which in this case may be a few weeks away.



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