Date: November 30, 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!
The markets remain in a correction, but the BULLS are fighting hard to gain some ground. Last week we started the first day of a new rally attempt, but have been waiting for confirmation from one of the major indexes. Remember, this occurs when one of the major indexes increases in price by 1.75% or higher on strong volume. This has yet to happen, so the count is still on to see if we will have a confirmation. Monday, Dec.1 will start day number 6 of the new rally attempt and if this new rally should occur it must do so within 4-12 days of the first rally day. This week keep a close eye on the price and volume movement of the indexes to see if a new rally confirmation will take place.
Last week marked one of the best weeks we have seen in the stock market in awhile. Despite our economic woes and the bad news consistently associated with it, the major indexes produced some nice gains in a shortened holiday week. The S&P 500 cruised to a 12% gain, the NASDAQ jumped 10.9% and the DOW hurdled 9.7%. Although these gains seem promising, it is important to continue to watch the volume behind these moves. Last week, volume continued to diminish on these price advances, we would rather see prices move up with volume increasing.
Next week the question will be whether we will see a push from the BULLS to regain some ground and confirm a new rally or whether the BEARS will take over once again and drop the indexes lower? One thing is for sure, if you do not monitor the constant movement of the stock market you will not be in the game when the time is right. Keep your head in the game and stay alert, it is in these times when the major indexes are trying our patience and wanting us to give up, that the markets like to turn around. The stock market likes to think 6-12 months out into the future, so many times when the economist are still touting DOOMSDAY, the indexes have already started their rise into a new uptrend. Keep your head in the game and you will be rewarded for your patience, this is what healthy investors do.
----------------------------------------------------------------------------------------------------------
STOCK MARKET NEWS:
Nasdaq drops 10.9%, S&P 500 slides 12%, and DOW falls 9.7%.
Terrorist launch an attack on the financial capital of Mumbai, India killing at least 150 people.
Citi shares surge 120% after the Treasury injects 20 billion more into the company and agree to absorb 306 billion of bad assets.
Home prices keep falling.
President elect Obama announces his economic team.
The Fed says it will buy 100 billion of Fannie Mae and Freddie Mac debt as well as 500 billion in related mortgage backed securities.
----------------------------------------------------------------------------------------------------------
Index Charts
S&P 500: 6 Month Chart with Daily Price Bars.
One advantage to technical analysis is the effort to recognize similar patterns in history. This chart of the S&P shows similar price movement at points 1 and 2. At point 1 we started a new rally attempt with the S&P heading up in a mini trend for 5 days before failing and heading to new lows. Point 2 suggests a similar pattern. Following a new rally attempt, the S&P has now headed up in a mini uptrend for 4 days. The question now is whether the S&P can maintain this move up or whether it will fizzle out and head to fresh new lows like it did at point 1. The most positive action the S&P could take is to break above its 50 day moving average at around 970 and then cruise above its last high at point 3 which was the 1000 level. If this occurs we will have broken the down trend of lower lows and lower highs. This will be key for positive bullish action.
----------------------------------------------------------------------------------------------------------
NASDAQ: 6 Month chart, daily price bars.
The NASDAQ shows the exact same pattern as the S&P noted above. The 1600 level offers some down trend resistance. The NASDAQ was able to immediately break back above the 1500 level of resistance which is a sign of strength. So now the 1600 level of resistance is the next area to watch, then the 50 day moving average which is about at 1725. Following this level it is important for the NASDAQ to break above the 1800 level as this marks the last high the NASDAQ made and would start a series of higher highs and lower lows or the beginning of an up trend.
----------------------------------------------------------------------------------------------------------
Top 10 Industries:
- Transportation Airlines
- Commercial Services Schools
- Banks-Northeast
- Utility Water Supply
- Utility Gas Distribution
- Soap and Cleaning Preparation
- Retail Discount Variety
- Medical Generic Drugs
- Medical Outpatient Home Care
- Retail Super Mini Markets
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.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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 |
35 |
-7% |
|
|
-2.63 |
| |
|
|
|
|
|
|
|
|
|
| TOTAL x 100 Shares: |
|
|
|
|
|
|
|
17687 |
|
|
|
|
|
|
|
|
|
|
** 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.
----------------------------------------------------------------------------------------------------------
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 1 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 *
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Stock: Devry Inc.
Symbol: DV
Fundamentals: 9.9 out of 10
Industry: Commercial Services Schools Industry Strength: 2
Technical Pattern: Cup with Handle Avg. Volume: 1,091,400
Pivot or Buy Point: $58.93
Stop Loss: $54.81 or 7%
Profit 1: $64.82 or 10%
Profit 2: $70.71 or 20%
Devry provides post secondary education to 61,924 students in 26 states. A few weeks ago we listed 4 stocks in this industry group to watch out for as they are in a leading industry group. Two of them have shown great strength in recent days (ESI and STRA) and passing buy points. DV could be next as it has built a solid Cup with Handle pattern. We are now in the 5th week of the handle building period and if the markets confirm their rally we will want to jump in on the education band wagon with a buy point of $58.93. Confirm this move with strong volume.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Last Weeks F.I.T. Stocks still ready to RUN!
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.
HMSY Breaks Out, but market rally has not confirmed!
HMSY broke out of its U Turn pattern on strong volume for the week. HMSY is now up 7% from its $27.53 buy point.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SJI is only 13 cents from its buy point. Watch Closely!
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.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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