Date: November 23, 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 HEALTH: Market in Correction!
Last week we compared the struggle between the Bears and Bulls to a football game with two great defenses. This past week it looked like the Bulls may finally march down the field and score after gaining better field position. Instead the great BEARS defense picked off a pass and ran it back to the 10 yard line of the Bulls. Now it's third and ten on the Bulls ten yard line, the forth quarter is ticking down and on Friday, Nov. 21 the Bulls decided to Blitz and shot the Bears back for a 5 yard loss. In the next two weeks we shall see if the Bulls can make a comeback as Friday marked another attempt at a new rally.
Yes, I myself am getting tired of mentioning another attempt at a new rally, but it is of the utmost importance to be patient and active in monitoring the daily activity of the stock market. We're playing for field position and when the opportunity is right the Bulls will eventually start to march down the field and score. We want to be on the sidelines with our star offensive players (F.I.T. Stocks) ready to attack when the time is right.
Friday, Nov. 21 marked another day for a first rally attempt. Within the next 4-12 days we would like to see one of the major indexes shoot up in price by 1.75% or higher on strong volume to confirm a follow through day. Over the last 2 months we have had three new rally attempts FAIL, yet you should not have been hurt as no confirmation day was signaled or no buy signals in any F.I.T. Stocks. This is why it is key to be patient and disciplined. I know several people that have continued to bargain shop thinking this market and stocks could not go any further down and yet it does. The BEARS have the potential to go down until all sellers are exhausted and none are left standing. This is a very dangerous game as only the market knows when it will turn around; we must only follow its lead and be prepared to react when the time is right for a new rally.
Last week was another great reminder of this as we began the count for another new rally confirmation. By Wednesday this new rally had FAILED in a big way. Not only did it FAIL, but on Thursday, Nov. 20 we broke through and closed below 8000 on the DOW for the first time this year. All other times this level had held as support, often dipping below, but never closing below this 8000 level. The good news is, although we had a new closing level below 8000, the very next day we rose back above this level, starting a new rally day, and yes the count for a new rally confirmation begins again.
Keep active in monitoring the daily activities of the stock market. You are a private detective conducting surveillance on the daily movements of the major indexes and the more you watch its activities the more you will learn about its tendencies. One day the Bull run will makes its move and you will be ready to capture its profits.
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STOCK MARKET NEWS:
Nasdaq drops 8.7%, S&P 500 slides 8.4%, and DOW falls 5.3%.
Detroit Automakers cannot convince congress to offer a BAILOUT.
Citi shares free fall 60% on fears the banks will be forced to write down billions of dollars in losses.
Friday stock market surges on news President elect Obama will select N.Y. Fed. Chief Tim Geither as his Treasury Secretary.
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Index Charts
S&P 500: 10 Year Chart Monthly Price Bars.
This 10 year chart with monthly price bars show how far the S&P 500 has dropped since the end of 2007. In almost 2 years the S&P has given up all of the gains from the previous 4 years from 2002-2007. Prices tend to rise at a slow steady pace, but when they fall, they fall fast. It remains to be seen whether the lows of 2002 will act as support once again and turn this market around, or whether we will crash through this support level and head lower.
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S&P 500: 6 Month Chart with Daily Price Bars.
We can clearly see the Failure of the new rally attempt that occurred on Wednesday, Nov. 19. This level was also a major support level of the S&P at 850. Friday, Nov. 21 registered as a new rally attempt and it will be interesting to see if the S&P can break back above this old support level which should now act as resistance. The next couple of weeks should tell the story.
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NASDAQ: 6 Month chart, daily price bars.
Below are the comments I made last week on the NASDAQ. The 1500 level of support was broken and now becomes resistance. We are a long way from the 50 day moving average which rest at 1800. Much like the S&P, for any real new rally to occur, I think the NASDAQ will have to break up through the 1500 level.
The NASDAQ offers the same conditions as the S&P 500 just at different price levels. Watch closely the 1500 level for support and the 1800 and 1900 price points for a new uptrend to develop. Notice the huge volume swell that took place in the NASDAQ on Thursday, Nov. 13.
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Top 10 Industries:
- Commercial Services Schools
- Transportation Airlines
- Utility Gas Distribution
- Retail Discount Variety
- Soap and Cleaning Preparation
- Medical Genetics
- Retail Super Mini Markets
- Commercial Services Security
- Finance Index Tracking Fund
- Medical Generic Drugs
Important Message:
Please remember as you build your portfolio, you are trying to find the best player for each position, 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 you list your 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 |
44.61 |
20% |
9/2/2008 |
$44.61 |
7.42 |
| 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 |
51.13 |
1% |
9/2/2008 |
$51.13 |
0.3 |
| 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 |
23.85 |
12% |
9/4/2008 |
$21.79 |
2.52 |
| SXE |
8/3/2008 |
8/4/2008 |
C/H |
35.63 |
33.14 |
-7% |
8/22/2008 |
$33.14 |
-2.49 |
| PWR |
7/27/2008 |
8/8/2008 |
C/H |
34.73 |
32.3 |
-7% |
8/25/2008 |
$32.30 |
-2.43 |
| APEI |
7/27/2008 |
8/15/2008 |
U |
47.13 |
43.84 |
-7% |
10/6/2008 |
$43.84 |
-3.29 |
| MPWR |
8/10/2008 |
8/11/2008 |
U |
27.63 |
25.7 |
-7% |
8/13/2007 |
$25.70 |
-1.93 |
| NPO |
8/10/2008 |
8/22/2008 |
C/H |
40.93 |
38.07 |
-7% |
9/18/2008 |
$38.07 |
-2.86 |
| LPHI |
10/19/2008 |
10/20/2008 |
C/H |
37.63 |
35 |
-7% |
|
|
-2.63 |
| LPHI |
10/19/2008 |
10/27/2008 |
C/H |
37.63 |
40.18 |
7% |
|
|
2.55 |
| |
|
|
|
|
|
|
|
|
|
| TOTAL x 100 Shares: |
|
|
|
|
|
|
|
17950 |
** 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
**IMPORTANT NOTICE** The F.I.T. Stocks listed below should only be entered into when the market conditions are right. Currently the market health is in a correction. Before entering these stocks make sure the major indexes have confirmed a NEW RALLY. Flowing with the market, not against it, is a healthy habit we should all employ.
This week we have 2 NEW F.I.T stocks meeting our 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!
**IMPORTANT NOTICE** This week we are listing 2 F.I.T. Stocks as buy candidates. Please remember to go lightly at first. At this time we only want to buy one or two F.I.T. Stocks at half of our normal position size. If normally you buy 200 shares, only purchase 100 shares. Most importantly be very disciplined in your sell rules. If a F.I.T. Stocks hits the 7% sell rule get out with no questions asked.
* All Charts are One year time frames with weekly price bars *
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Stock: HMS Holdings
Symbol: HMSY
Fundamentals: 9.9 out of 10
Industry: Commercial Services Healthcare Industry Strength: 36
Technical Pattern: U Turn Avg. Volume: 293,700
Pivot or Buy Point: $27.53
Stop Loss: $25.61 or 7%
Profit 1: $30.28 or 10%
Profit 2: $33.03 or 20%
HMS Holdings provides cost containment, revenue recovery, reimbursements and benefits to Government healthcare programs. Earnings grew at a 44% pace last quarter and sales increased 30%. Volume started to pick up the last couple of days suggesting institutional buying. There is some major resistance at $27.39, but if HMSY can break through this resistance and the 10 week average can cross up through the 40 week moving average this stock could be a very good buy at $27.53. Make sure strong volume confirms the move and a new market rally has been confirmed.
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Stock: South Jersey Industries
Symbol: SJI
Fundamentals: 9.9 out of 10
Industry: Utility Gas Distribution Industry Strength: 3
Technical Pattern: U Turn Avg. Volume: 254,800
Pivot or Buy Point: $39.13
Stop Loss: $36.40 or 7%
Profit 1: $43.04%
Profit 2: $46.95%
South Jersey Industries is a holding company engaged in the distribution of natural gas to customers in southern New Jersey. Earnings increased 180% last quarter and sales jumped 35%. SJI is also going to meet heavy resistance at the $39.00 level, but if the stock can break through this level it would be a very positive sign. In addition, since the beginning of October, SJI has had 4 weeks of heavy accumulation suggesting heavy buying by big money investors. If the market rallies and SJI breaks above its resistance point of $39, let's jump in with a $39.13 buy point.
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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