Tech issues have been acting stronger than the broader market for a few months now. This looks like a rotational trade out of commodity sensitive issues, which have been leading for several years and back into techs. In that vein the Powershares QQQQ, a tracking stock for the 100 largest issues on the NASDAQ and a great proxy for techs, remains on its’ FusionIQ BUY signal from May 1st (see chart below)
Please find in the table below a great example of how FusionIQ’s custom screener can produce targeted trading ideas. In this screen which we have run on this blog several times we use FusionIQ’s powerful custom screener to find stocks that are on new FusionIQ timing BUY signals but have traded above average volume relative to their 12-day average volume flow. The screen in essence is looking to see where aggressive institutional trading is occurring.
Every day, we run a series of screens, large and midcap, buy & sell, breakout and breakdown.
Today, our Large Cap Sell Screen identified Lehman Brothers (LEH) as a Sell. It has a current master score of 33 (out of 100) and has an abysmal technical score of 17. It went to a sell signal back in March around $52, and two weeks later, traded as low as $20.25. It recovered somewhat, flipping to neutral around $44.
Its now back on a sell signal, with a $20 price target. .
The MidCap Sell Screen found a smaller financial: CIT Group (CIT). It also went on a Sell. Same set up as Lehman Brothers: First sell signal was in March about $16, fell to $6.45 a few weeks later, back to a neutral a month later. Now, CIT is back on a Sell/Short rating, with a target about 30% lower.
Traders who short stocks should always work with stop losses. The financial sector, with outside investors, have been very volatile, with squeezes occurring regularly.
Please find in the attached table a list of above average volume BUYS cultivated off the FusionIQ custom screener. This screen looks to find stocks that are on new FusionIQ timing BUY signals but are moving up on above average volume a sign that institutional accumulation (a driver of equity prices) is building.
Back
in February we published a blog post on Walt Disney (DIS) after Barron's wrote a
glowing story entitled "
The Magic is Back " about Walt Disney and its prospects for the
future. We said back then that Disney's FusionIQ ranking was only a 58 out of a
possible 100 and that at this point with only a 58 ranking it is still a bit
early to believe the magic is back for good. We then suggested the best plan of
attack was to wait for its FusionIQ rank to move back into bullish mode again by
seeing its ranking score move back to 70.
Well for the first time in several years DIS is back to a FusionIQ score of 70. That said we now concur with Barron's that Disney may indeed be back !
International Coal Group, Inc. (ICO), a coal miner in the northern and central Appalachia and the Illinois basin which we featured to subscribers last week in our Chart of the Week, scored a high volume short squeeze surge breakout again on Friday in the face of a weak tape. Stocks trade up in poor tapes always attract us as it is on these days it would be very easy for buyers to step away. With almost 22.00 % of the float short ICO has a big liquidity catalyst to propel shares higher and the coal sector has been red hot of late. The point and figure target for ICO shares is $ 9.25 giving investors a nice percentage return if the target is reached from present levels.
Fusion IQ Rank has been consistently negative on Bear Stearns over the past 6 months.
The most recent sell signal was on Friday, and since then the stock has gotten whacked:
Sybase Inc. (SY) just reported a very strong quarter with gross margin improvements, across the board strength and a solid outlook.
From a catalyst perspective, activist shareholder Sandell Asset Management (A firm headed by an ex Carl Icahn fund employee) recently upped their stake in Sybase by 1.18 million shares raising their total holdings to 5.4 million shares or roughly 6.03 % of the shares outstanding. One of their first orders of business is to propose their own slate of candidates to be nominated to the board of directors. This supports a view that Sybase is clearly a prime candidate for continued additional activist involvement or an outright takeout.
With JAVA buying MYSQL (Lnux DBSE vendor) last week, it would not be surprising to see another hardware vendor scoop up Sybase. Expectations are still relatively low with only 3 buys 4 holds and 1 sell. Trading at an EV/Rev's of approximately 2.10 and 14 x consensus 08 EPS, Sybase is not expensive. In a consolidating sector with technology that's relevant, we would recommend a long position in SY with near term catalysts of additional activist news flow.
Technically this has been one of the strongest tech stocks in a weak tape. Stocks that act strong in a bad environment always stand out as it shows conviction on the part of buyers. With good base support and a strong uptrend from the 2003 lows still intact, SY shares can be accumulated on an average cost basis here and on pullbacks. Only a violation below $ 22.50 would turn the story outright bearish – a tighter stop could be placed under the recent weekly reversal low near $ 24.00 for those who want to tighten up the risk. Our point and figure derived projected upside target is $ 34.50.
These are the most recent Buy & Sell signals the system has generated.
Top 10 Buy Signals
Top 10 Sell Signals
Note: Stocks ranked highest in this univese tend to outperform stocks rank lowest.
Two strong Sell signals on SHOO in the last 6 months, including a recent Sell in late December
The stock has since dropped over 25%:
click for larger chart
&
Acorda Therapeutics (ACOR) a biotechnology company that is developing therapies for spinal cord injury and related neurological conditions broke out in Fridays weak tape on 2.31 times its 21 day average volume. Beyond the breakout, the stock has 13.21 % of its float short, so a short squeeze could bring about a positive liquidity catalyst as well. The recent breakout completed a large base and implies higher prices.
On pullbacks towards $ 23.25 to $ 23.00 shares may offer an attractive entry point. A tight stop could be set under $ 22.00 to limit downside risk and prevent damage in case this turns out to be a false breakout.
Sears stock is off 6.3% today, on disappointing earnings news.
You didn't have to wait for earnings, however -- the stock has been on a Fusion IQ Sell Signal since July 2007, with several reiterations since:
