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Saturday, April 27, 2013

Leader Charts

Overall it was an incredibly good week on the leadership list, outperforming the market by a mile. There was a tie for first place with the top 2 stocks both gaining exactly 22.65%. GTN was one of them, and this is a good example of relative strength. During the prior week, while the rest of the market was getting creamed, this stayed put, and when the reversal came, it took off like a rocket. It broke out on Monday, probably the only good entry point we will get for a while. This is an O'Neil high-tight flag pattern, and the typical gain from a breakout here is 80-100%, so this has plenty of potential gain left.

LL gapped up huge on earnings last week, after a pullback to the 50dma. It was one of the stocks I was watching last week for a pullback, but since it was reporting I did not get into it, which, in hindsight, turned out to be  a dumb move. This has been a very strong stock for quite a while now, and this latest move puts it in the stratosphere . This blasted right through the target I have projected for it, and is in the process of carving out a whole new trading range. This may well be the strongest stock oin the market right now.

PNRA was the only stock to decline on the week, thanks to an earnings miss. This came into the report with a very weak price relative line, which, despite the recent move up, is on an intermediate term down trend. That alone would have kept me out of this, and the earnings miss pretty much reinforces that position.

GMCR had the smallest gain, qualifying it as the second biggest "decliner". Since price is on a logarithmic scale, the chart can be a bit misleading: the move this has made in the last 6 months is a lot bigger than it looks. This is currently in a base, but is in the early stages of a new up trend, as evidenced by the moving averages. This is still only about half of what it was two years ago, so even if this only retraces 50% of that loss, it's still a pretty good move.

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