Disclaimer: Please excuse any poor grammar or sentences that make absolutely no sense.. still recovering from a cold and heavily medicated 🙂
::: Today’s Market Action :::
Following a little Thanksgiving intermission, traders were in no mood to continue their buying spree. A declining dollar, civil unrest in Iraq, a valuation question of Google and poor sales results out of WalMart all provided good reasons for good old fashioned profit taking. Ok, well it was a little more than just profit taking today as both the S&P and Dow broke their upward trend lines and will test their 50 day moving average in the coming days. If their is a silver lining it’s that volume, while heavier than Friday’s holiday trading, was just a bit above average. In addition, the Nasdaq is holding the upward trend .. just barely. Today’s move was certainly not surprising and the action up to this point remains healthy.
::: Major Indices Performance – The Numbers :::
(Note: volume averages are based on the average over the past 50 days)
Data as of 4:00EST – End of Day Nov 27th 2006
* Accumulation (institutional buying) today in the S&P and Dow
Nasdaq: DOWN 2.21% today with volume 3% ABOVE average
Nasdaq ETF (QQQQ) DOWN 2.22%, volume 40% ABOVE average
Dow: DOWN 1.29%, volume 5% ABOVE the average
Dow ETF (DIA): DOWN 1.28%, volume 20% ABOVE the average
S&P ETF (SPY): DOWN 1.38%, volume 20% ABOVE the average
Russell Small Cap ETF (IWM): DOWN 2.24%, volume 42% ABOVE the average
::: SelflInvestors Leading Stocks :::
The Self Investors Leading Stocks Index is comprised of stocks in the Breakout Tracker, which is a database of the fastest growing companies near a breakout or having already broken out of a base. Leading stocks of course did not fare well at all today. I’ve mentioned in previous reports that health of leading stocks has been deteriorating and that was no exception today.
Summary:
* Decliners led Advancers 374 to 31.
* Advancers were up an average of .97% today, with volume 5% ABOVE average
* Decliners were down an average of 2.67% with volume 11% ABOVE average
* The total SI Leading Stocks Index was DOWN 2.39% today with volume 10% ABOVE the average
* Where’s the Money Flowing *
Many investing websites provide leading industries based on price performance alone. However, without accompanying volume levels, this can sometimes be misleading. The only way that I know of to gauge industry/sector strength WITH volume levels is through the analysis of ETF’s. A couple years ago this was not possible, but as more traders/investors use ETF’s they become a much better tool for guaging the health of the market and seeing where the money is flowing (or not flowing). Using the proprietary SelfInvestors Demand Indicator score which measures price and volume movements, I’m able to quickly see which sectors/industries are seeing the greatest inflows of cash. For a detailed look at how I go about gauging sector/industry strength please see the following post: http://investing.typepad.com/tradingstocks/2006/09/wheres_the_big_.html
* Current Leading Sectors/Industries (over last 30 trading days):
Home Construction, Realty, Gold, Real Estate, Technology, Consumer Services
* Current Lagging Sectors/Industries (over last 30 trading days):
Health Care Providers, Oil, Broadband
* Today’s Market Moving Industries/Sectors (UP):
Not a one today.
* Today’s Market Moving Industries/Sectors (DOWN):
Fairly broad selling today – Broker/Dealers, Internet, Realty, Real Estate, Biotech and Energy
** Stocks **
The stocks section will be an area where I highlight one stock selected from a group of stocks moving up with volume well above average and most likely breaking out of a base or consolidation. Despite all the selling today, there was a diamond in the rough – Team Inc (TMI), a thinly traded company that gapped up with heavy volume and flirted with a breakout.
ABOUT: Team, Inc. (Team) is a professional full-service provider of specialized industrial services, including on-stream leak repair, hot tapping, fugitive emissions control monitoring, field machining, technical bolting, field valve repair, field heat treating and non-destructive testing/examination (NDE) inspection services. These services are provided throughout the United States in over 50 locations. The Company operates in two segments: industrial services, and equipment sales and rental. The Company conducts operations through international locations in Singapore, Aruba, Canada, Venezuela and Trinidad. In addition, Team licenses its techniques and materials to various companies outside the United States and receives royalties based upon revenues earned by its licensees. In August 2004, Team acquired the business assets of Cooperheat-MQS, Inc., a Houston, Texas-based company with two primary service offerings: field heat treating and NDE inspection services.
FUNDAMENTALS: With the exception of a couple quarters of poor earnings results at the end of ’04 and beginning of ’05, TMI is a company that has posted big time growth in the past couple years. 30% growth is expected to continue. Margins are poor, but ROE is excellent and continues to rise.
TECHNICAL: The stock did break out today from a decent looking base with good volume on a gap up and managed to hold the gains well. Relative Strenght is lagging a bit, but overall a decent looking chart.
SELFINVESTORS RATING: With a total score of 50/60 (26/30 for fundamentals, 24/30 for technical), TMI is a solid SelfInvestors breakout candidate.