November 1st, 2008

More Early Stage Momentum Stocks

A couple of weeks ago, in Early Stage Momentum Stocks, I wrote about the power of the “Golden Cross” where the both the stock price and its 90-day moving average crosses above its 180-day moving average. At the time, there were 157 stocks that had formed this “Golden Cross”; there were 157 at the time. I promised I’d report periodically on this statistic.

The market had an excellent week and the number of stocks with Golden Crosses has increased:

The Sector showing the greatest number continues to be the Financials (banks, services, insurance followed by Health, Diversified (education) and Utilities. In the previous post, I also mentioned a number of individual stocks that were acting very nicely (all but 4 of which are also in this week’s IBD 100 list). The following are added to the prior list increasing the number to 23 stocks that are currently leading the market:

  • DV (DeVry) – IBD 100
  • LRN (K12 Inc.)
  • STRA (Strayer Education) – IBD 100
  • HCBK (Hudson City Bancorp) – IBD 100
  • TRST (Trustco Bank)
  • SRCL (Stericycle) -IBD 100
  • CBST (Cubist Pharma)
  • CHTT (Chattem) – IBD 100
  • SPTN (Spartan Stores)
  • PETS (PetMed Express) – IBD 100
  • GTIV (Gentive Health) -IBD 100

I think we may be nearing the end of the first step of the base building process (we are up 15% from the intra-day low of 839.80 on October 10; we could move up another 5% to 1020) followd by a reasonable and anticipated retest of that low. So you need to be agile if taking a short-term trading position in any of these stocks.

As I wrote in “Extrapolating to the ‘All-Clear‘”, much work yet needs to finished and time forming a bottom until we can assume that the residual risks of the financial crises have abated. We’re now dealing with the economic fall-out of the world-wide credit implosion and nothing yet indicates that the backdraft won’t be as severe as the impact of the crises itself.

(Again, the complete list is available in spreadsheet form at your request)

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