Date: August 10, 2008
Charts provided by Bigcharts.com
Fundamental Data provided by Investors Business Daily
F.I.T. STOCKS
Finding High Quality Growth Stocks to Build Healthy Investment Habits.
Market Update
MARKET HEALTH:
MARKET CONFIRMS RALLY!
Well we just finished our first week of the confirmed rally and so far things are looking good. The feel to this new rally is different. There seems to be a change of leadership, many of the oil and gas related industries have drifted out of the top 10, new leading F.I.T. stocks have been breaking out on solid volume. Unexpected news on the state of our economy, bad news from the financial industry, or a rise in the demand for Oil was almost a certainty for a sell off in the 3 major indexes. Now, it seems the Markets are able to shake this bad news off and be resilient. Volume on the up days has been stronger than the down days, specifically in the Nasdaq. For the week we were up over 4.5% in the Nasdaq, the DOW gained over 3.5%, and the S&P 500 trailed with a 2.8% rise.
We have stated for several weeks now that for this market to turn around we would need a fall in Oil prices, a resurgence in the financial industry, and the need for the economy to seem more stable again.
Well Oil prices had a nasty slide over the past week finishing roughly 8% lower to $115. At this time Oil has now slid over 20% since it reached a high of $147. This has been roughly four weeks of downward momentum for Crude Oil, while the 3 major indexes have started to make a rally over the same four weeks.
Last week, not even the huge disappointment in Quarter 2 earnings from Fannie Mae and Freddie Mac could sink the market. Fannie Mae reported a enormous loss of -$2.54 a share, which was almost three times worse than what analyst were expecting. Still the market showed strength.
However, most of last week's gains were owed to the strength in the American dollar. It seems that the sentiment for slower growth and possible credit crisis is now shifting to once healthy economies such as Europe and Japan, and that our problems may not be nearly as bad as the ones these countries will face. These fears helped weaken these foreign currencies and brought strength back to the U.S. Dollar. This shift in attitude was a big reason for the lift in our major indexes.
Let's take a look at a few charts to help paint a clearer picture of the relationship that is taking place in the major indexes.
OIL:
Oil breaks through the upwards channel support line indicating a change of trend to the downside.
FINANCIALS:
The Financials ETF appears to hit a bottom as it breaks through a 2 month down trend and clears above the 50 day moving average. Have we hit a bottom?
US Dollar Index Future:
US Dollar Index clears major resistance at $74 and Friday gaps up in price. Usually a very bullish sign.
NASDAQ:
Nasdaq breaks 2 1/2 month down trend and confirms new rally as Oil begins to fall and Financials and the Dollar begin to rise. Look for Nasdaq to clear 200 day moving average.
S&P 500:
SPX follows path of Nasdaq, but has yet to clear 50 day moving average. Look for S&P to clear 1300 level and then to test the 200 day moving average.
Right now it appears the pieces are falling into place to give this new rally a good push upwards. However, we all know the markets can change their minds at any time and this is why Healthy Investors monitor their movements on a daily basis.
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Top 10 Industries:
- Mach. Gen Industry
- Elec-Military Systems
- Retail-Discount & Variety NEW
- Leisure Tys/Gms/Hbby NEW
- Energy-Other
- Bldg.-Maintenance NEW
- Medical-Biomed/Bth NEW
- Medical Genetics NEW
- Elec-Contract Mfg NEW
- Oil Gas Machin. Equip.
**Notice the take over from NEW leading Industries. We have 6 NEW industries that have made the top 10. Oil related industries are hanging on by a thread with only the Oil and Gas Equip. resting in the top 10. When a new rally confirms it is nice to see NEW leadership develop.**
Important Message:
Please remember as you build your portfolio, you are trying to find the best player for each position. Another words find the best stock in a leading industry. DO NOT buy two leading stocks in one industry. We are trying to build the dream team. One stock, one industry, then fill another position depending on your portfolio size and money management guidelines. When we list our F.I.T. Stocks selections, please make sure as you enter in your trades that you have not already filled that position or industry.
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F.I.T. Stock Break Outs
| Symbol |
Newsletter |
Breakout |
Base |
Buy |
Current |
% |
Exit |
Exit |
Profit/ |
| |
Date |
Date |
Pattern |
Point |
Price |
Change |
Date |
Price |
Loss |
| |
|
|
|
|
|
|
|
|
|
| MA |
3/23/2008 |
4/1/2008 |
C/H |
222.43 |
292.46 |
31% |
5/23/2008 |
$273.22 |
70.03 |
| RRC |
3/30/2008 |
4/2/2008 |
FB |
65.73 |
72.3 |
10% |
5/22/2008 |
$72.30 |
6.57 |
| RIG |
3/23/2008 |
4/4/2008 |
C/H |
145.13 |
159.64 |
10% |
5/21/2008 |
$159.64 |
14.51 |
| SID |
4/6/2008 |
4/8/2008 |
FB |
40.23 |
51.9 |
29% |
5/19/2008 |
$51.90 |
11.67 |
| MON |
4/6/2008 |
4/16/2008 |
DB |
123.93 |
114.89 |
-7% |
5/1/2008 |
$114.89 |
-9.04 |
| BCPC |
3/23/2008 |
4/16/2008 |
U |
24.33 |
22.66 |
-7% |
5/1/2008 |
$22.66 |
-1.67 |
| VMI |
4/13/2008 |
4/16/2008 |
U |
99.23 |
117 |
18% |
5/19/2008 |
$117.00 |
17.77 |
| GMXR |
4/6/2008 |
4/17/2008 |
U |
40.23 |
37.42 |
-7% |
4/29/2008 |
$37.42 |
-2.81 |
| DRS |
4/6/2008 |
4/16/2008 |
C/H |
59.43 |
78.56 |
32% |
5/8/2008 |
$73.84 |
19.13 |
| ARD |
4/20/2008 |
4/21/2008 |
U |
44.83 |
53.79 |
20% |
5/21/2008 |
$53.79 |
8.96 |
| FAST |
4/27/2008 |
5/2/2008 |
C/H |
51.43 |
47.83 |
-7% |
5/21/2008 |
$47.83 |
-3.6 |
| CPO |
5/4/2008 |
5/6/2008 |
C/H |
47.33 |
46.07 |
-3% |
5/23/2008 |
$46.07 |
-1.26 |
| SNHY |
5/4/2008 |
5/6/2008 |
C/H |
32.33 |
39.1 |
21% |
5/22/2008 |
$39.10 |
6.77 |
| SBS |
5/4/2008 |
5/5/2008 |
U |
54.63 |
50.81 |
-7% |
6/3/2008 |
$50.81 |
-3.82 |
| WGOV |
5/11/2008 |
5/15/2008 |
C/H |
37.19 |
47.93 |
29% |
|
|
10.74 |
| ABB |
5/4/2008 |
5/14/2008 |
U |
32.43 |
30 |
-7% |
6/11/2008 |
$30.00 |
-2.43 |
| GNA |
4/20/2008 |
5/5/2008 |
C/H |
16.58 |
19.3 |
16% |
6/30/2008 |
$19.30 |
2.72 |
| FLIR |
5/11/2008 |
5/19/2008 |
C/H |
35.73 |
42.9 |
20% |
7/1/2008 |
$42.90 |
7.17 |
| MUR |
5/18/2008 |
5/19/2008 |
U |
93.64 |
87.09 |
-7% |
7/9/2008 |
$87.09 |
-6.55 |
| TITN |
5/18/2008 |
5/19/2008 |
U |
24.65 |
32.29 |
31% |
6/25/2007 |
$32 |
7.64 |
| MPWR |
6/1/2008 |
6/5/2008 |
C/H |
26.03 |
24.21 |
-7% |
6/23/2008 |
$24.21 |
-1.82 |
| SDS ETF |
6/8/2008 |
6/9/2008 |
U |
60.1 |
67 |
11% |
6/27/2008 |
$67.00 |
6.9 |
| QID ETF |
6/22/2008 |
6/25/2008 |
U |
42.33 |
46.56 |
10% |
7/15/2008 |
$46.56 |
4.23 |
| SKF ETF |
6/8/2008 |
6/9/2008 |
U |
121.23 |
160.4 |
32% |
7/3/2008 |
$160.40 |
39.17 |
| KSU |
7/27/2008 |
7/29/2008 |
U |
50.83 |
52.8 |
4% |
|
|
1.97 |
| CVA |
7/27/2008 |
7/30/2008 |
C/H |
29.53 |
27.47 |
-7% |
7/31/2008 |
$27.47 |
-2.06 |
| APEI |
7/27/2008 |
8/1/2008 |
U |
47.13 |
43.84 |
-7% |
8/4/2008 |
$43.84 |
-3.29 |
| WBSN |
8/3/2008 |
8/4/2008 |
U |
21.33 |
22.11 |
4% |
|
|
0.78 |
| SXE |
8/3/2008 |
8/4/2008 |
C/H |
35.63 |
36.06 |
1% |
|
|
0.43 |
| PWR |
7/27/2008 |
8/8/2008 |
C/H |
34.73 |
35.22 |
1% |
|
|
0.49 |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| TOTAL x 100 Shares: |
|
|
|
|
|
|
|
19930 |
** MONITOR THE FOLLOWING F.I.T. STOCKS HIGHLIGHTED IN YELLOW CLOSELY FOR PRICE AND VOLUME MOVEMENT! Look for light volume on down days and heavy volume on up days.
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The F.I.T. STOCK PLAN
This week we have 4 NEW F.I.T stocks meeting are F.I.T. Stock Plan criteria. To make our list of High Quality Growth Stocks a company must show
F- Fundamentals that are Superior
I - Industry Leader or Strong Institutional Buying
T - Technical Charts exhibiting Strong Base Patterns
F.I.T. Stocks Ready to RUN!
* All Charts are One year time frames with weekly price bars *
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Stock: Ansys Inc.
Symbol: ANSS
Fundamentals: 9.8 out of 10
Industry: Computer Software Design Industry Strength: 38
Technical Pattern: U TURN Avg. Volume: 1,318,300
Pivot or Buy Point: $50.03
Stop Loss: $46.53 or 7%
Profit 1: $55.03 or 10%
Profit 2: $60.03 or 20%
Ansys develops engineering simulation software applications for design analysis. Its recent quarterly earnings were up 40%. Investors Business Daily reports that ANSS has signed on 12 seven figure orders for its software that won't even show up in the books until later on in the year. ANSS has built a wonderful U shaped pattern, and we really like the accumulation that has showed up in the past 2 weeks. When ANSS breaks above its old high of $49.86, let's jump in with a buy point of $50.03 on strong volume.
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Stock: Monolithic Power Sys. Inc.
Symbol: MPWR
Fundamentals: 9.8 out of 10
Industry: Elec-Semiconductor Mfg. Industry Strength: 37
Technical Pattern: U Turn Avg. Volume: 916,800
Pivot or Buy Point: $27.63
Stop Loss: $25.70 or 7%
Profit 1: $30.39 or 10%
Profit 2: $33.15 or 20%
We have actually been following MPWR since it formed a Cup with Handle pattern back in May. That pattern fizzled out with the start of a correction. Now MPWR has built a U Turn pattern that has built off of the previous Cup with Handle pattern. Notice in the last 2 weeks how price and volume have acted. 2 weeks ago there was a bit of a shake out of weak investors as MPWR sold off, but ended the week up in price on good volume. This is a sign of support for MPWR. Last week MPWR actually gapped up in price above the 10 week moving average on very strong volume. This is a sign of Big Money Investors stepping in to buy the stock. Now we will wait for MPWR to break above the high of the pattern and consider buying it at $27.63 on strong volume.
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Stock: Accenture Ltd.
Symbol: ACN
Fundamentals: 9.8 out of 10
Industry: Computer Tech Services Industry Strength: 13
Technical Pattern: Cup with Handle Avg. Volume: 3,446,500
Pivot or Buy Point: $42.23
Stop Loss: $39.28 or 7%
Profit 1: $46.45 or 10%
Profit 2: $50.67 or 20%
Accenture provides management consulting technology and outsourcing services to businesses and government agencies. ACN's Return on Equity is a remarkable 62%. Return on Equity basically measures how effectively a company is run or how efficient a company is with its money. ACN has set up in a beautiful Cup with Handle Pattern. We will look to get involved at $42.23, which is just past the high of the handle, on strong volume.
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Stock: Enpro Industries Inc.
Symbol: NPO
Fundamentals: 9.9 out of 10
Industry: Mach-Gen Indust. Industry Strength: 1
Technical Pattern: U Turn Avg. Volume: 309,700
Pivot or Buy Point: $40.93
Stop Loss: $38.07 or 7%
Profit 1: $45.02 or 10%
Profit 2: $49.11 or 20%
EnPro manufactures sealing, engineering and engine products for petrochemical, paper, and automotive markets. NPO sits in the current number 1 industry spot of Machinery General Industrial. It had formed a very long Cup with Handle Pattern, but once a handle falls more than 10-15% the pattern is broken and the stock begins to build a new base which is what you see happening with NPO. NPO is now 9 weeks into a new U Turn pattern and the stock showed nice signs of support in the bottom of the base at $35. Last week NPO shot past its 10 week moving average on heavy volume. When NPO breaks above its previous high let's jump in at $40.93 on heavy volume.
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Watch List of stocks from previous F.I.T. Stocks Newsletters still holding up strong.
** We have a NEW buy point for IBM and a updated Chart. If you have entered a buy stop order make sure you cancel and enter in the new buy point.**
Stock: International Business Machines
Symbol: IBM
Fundamentals: 9.6 out of 10
Industry: Computer Tech. Services Industry Strength: 13
Technical Pattern: Cup with Handle Avg. Volume: 7,837,700
Pivot or Buy Point: $131.13
Stop Loss: $121.96 or 7%
Profit 1: $144.23 or 10%
Profit 2: $157.33 or 20%
IBM has been sitting patiently on our watch list for several weeks now. We initially listed IBM as a U Turn pattern and prices briefly broke above our original buy point although volume did not confirm the move. IBM's industry group has now moved from 30 to 13 since the initial listing. A cup with Handle has now formed and our new buy point is $131.13.
Please remember to stick with your Investment business plan, be disciplined, monitor price and volume daily and make money.
Happy and Healthy Investing,
Steve Martin
Founder
www.fitstocks.com