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Friday, April 6, 2012

Leader Charts

Despite a relatively weak market, the leadership list actually had a pretty good week. There were about an equal number of gainers and decliners, but the gains far outweighed the losses. POZN was the biggest gainer, with a nice run since gapping up in mid March. The first thing I noticed when I looked at the chart was the nice trading range it established with the gap up in November: it nearly flawlessly establishe bottom, middle, and top pivots before the March breakout It really hasn't established a new trading range, but assuming that the recent high was the mid point, that would put the top at about 8.50. Considering how far it's already gone, I wold not scoff at that possibility.

AAPL was the second biggest gainer. Last Friday (the blue arrows represent last Friday's candle) this almost looked like it had topped. It proceeded to reverse and hit a new high. Since it started going straight up it has been just about impossible to pick out pivot points: the ones above are my best guess. There is one sign that it may be topping out: some analyst said this week that AAPL would be the first trillion dollar market cap company. I hear the same thing about GOOG a few years ago, right about the time it topped.

SAM was the biggest decliner. This is in a base, and appears to be forming the right side. While the base looks ok, the timing is a little strange: while the rest of the market rallied like gangbusters, this was doing nothing, thus the weak price relative line. This did a very good job of establishing a trading range and staying within it. One reason I try to determine pivot points is not some numerological mumbo jumbo, but because I am convinced that program traders see the same things I do and trade off them, and they can easily influence the direction of a stock in the short term. If you remember the flash crash in 2010, this was one of the stocks they targeted.

CBOU was the second biggest decliner. This one does not appear to be done with establishing it's trading range that it started in January, although I suspect that top pivot point is going to be the middle of the new range. How long it will be beofre it starts moving up again I don't know, but it is forming a handle here and could break out just about any time, and is showing a text book handle volume pattern: slightly declining price on declining volume. Keep an eye on this one.

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