After 3 straight down days, it looked the market was looking for an excuse to rally and it found one the rumored takeover of Alcoa by either BHP Billiton (BHP) or Rio Tinto (RTP) which provided optimism for more big M&A deals in the works. Today’s action as bullish as it appeared on the outside wasn’t anymore than a minor bounce. While volume levels came in bit higher in the Dow and S&P than yesterday (which was a very quiet day), trading volume was still well below average. I’m not calling today’s action accumulation and we’re still in danger of taking out key support levels in the coming days. Remain on the cautious side.
::: 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 Feb 13th 2007
Volume came in higher than yesterday in Dow and S&P but I’m not calling it accumulation because it was well below average levels.
Nasdaq: UP .39% today with volume 7% BELOW average
Nasdaq ETF (QQQQ) UP .37*%, volume 22% BELOW average
Dow: UP .81%, volume 10% BELOW the average
Dow ETF (DIA): UP .83%, volume 17% BELOW the average
S&P ETF (SPY): UP .84%, volume 4% BELOW the average
Russell Small Cap ETF (IWM): DOWN .82%, volume 6% BELOW 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 did fairly well today but the volume in decling stocks was much greater than rising rising leading stocks.
Summary:
* Advancers led Decliners 306 to 109
* Advancers were up an average of 1.71% today, with volume 3% ABOVE average
* Decliners were down an average of 1.89% with volume 37% ABOVE average
* The total SI Leading Stocks Index was UP .77% today with volume 12% 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):
Aerospace/Defense, Materials, Water, Transport, Realty, Internet
* Current Lagging Sectors/Industries (over last 30 trading days):
Oil, Broadband, Nanotech
* Today’s Market Moving Industries/Sectors (UP):
Materials, Realty, Oil Services, Telecom
* Today’s Market Moving Industries/Sectors (DOWN):
No Big Down Movers Today
::: 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. Today’s stock is Icon (ICLR), an Irish ADR providing research services that broke out to a new all time high..
ABOUT: ICON public limited company is a contract research organization, providing clinical research and development services on a global basis to the pharmaceutical, biotechnology and medical device industries. The Company provides a range of clinical research services, which facilitates the collection, analysis and reporting of clinical trials data. The range of services includes clinical pharmacology, bioanalysis, pharmacokinetic and pharmacodynamic analysis, study protocol preparation, case report form preparation, clinical trial approvals, investigator recruitment, study monitoring and data collection, patient safety monitoring, clinical data management, biostatistical services, medical reporting, central laboratory services, interactive voice response, animal health, regulatory consultancy, strategic drug development services and digital imaging. During the year ended December 31, 2005, ICON had operations in 41 locations in 27 countries, including the United States, Europe and others.
FUNDAMENTALS: With the exception fo a dip in ’05, ICON is a company that posts significant earnings growth each and every year. Growth in 2006 was a record for the company as sales growth continues to accelerate. Solid growth is expected to continue.
TECHNICAL: While the stock has already had a big run over the past year, the technical action indicates there is considerable room to run. Today, following an earnings report in which the company beat estimates and guided higher, the stock broke out from a base and catapulted to a new all time high with good volume. It’s a bit extended at this point, but any minor pull back would offer a real nice entry.
SELFINVESTORS RATING: With a total score of 51/60 (24/30 for fundamentals, 27/30 for technical), ICLR is currently a top 10 Self Investors break out stock.
Full Disclosure/Disclaimer: The stock of the day is by no means a buy recommendation. Please do your own research and make a personal decision based on your own tolerance for risk. I currently do not hold a position in ICLR.