F.I.T. Stocks News July 20, 2008

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Date: July 20, 2008

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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 IN CORRECTION! Trying to stage NEW RALLY!

Tuesday, July 15 became the first new day of a rally attempt for the Nasdaq and the DOW and S&P 500 followed on Wednesday staging their first day of a rally attempt. This time, so far, the rally attempt is still in tact. The rules from William O'Neil of Investors Business Daily state that after the first rally day we then wait for a confirmation day. This confirmation should occur 4-11 day's after the first day of the rally and volume should be 1.75% higher then the previous days volume. If this confirmation takes place then it is time to slowly start easing back into the market to test waters.

This week the markets posted solid gains with the Nasdaq jumping 2%, the S&P 500 rose 1.7% and the DOW vaulted 3.6%. For weeks now we have been commenting on the fact that for this market to turn around we would need Oil to decline, the Financial sector to strengthen back up, and for inflation worries to subside. Let's take a look at how the headlines played out this past week.

The Headlines

In the last newsletter Light Sweet Crude Oil had slipped 9% before regaining 10% to end up for the week. The markets in turn sank as Crude began to rise once again. This past week Light Sweet Crude fell once again to the tune of -$16 a barrel this time however Crude DID NOT stage a comeback. The markets took notice and held onto nice gains for the week.

The Financial Sector finally gained some strength, not on good news, but more on not so much bad news. This not so much bad news, the markets took as great news. The best news came from Citigroup, JP Morgan, and Wells Fargo. While none of these big financials beat views, the key was they did not lose as much as was anticipated. Merrill Lynch on the other hand reported abysmal earnings well below the losses that were expected, but even with that news the Financials held up. Next week be on the look out for the earnings report from Bank of America. Let's hope the follow along the same lines as Citigroup and JP Morgan.

On the Mortgage front, Freddie Mac and Fannie Mae finally had some up days as U.S. Officials backed rescue plans to help out the mortgage providers. Freddie Mac even got the OK from the SEC to sell stock as a means of raising cash.

Second quarter earnings season opened last week and the outcomes were mixed. While Google, AMD and Microsoft disappointed, eBay, IBM, and Intel showed promise. This week we get a flood of more earnings in the Financial Sector and else where so it will be interesting to see how Wall Street reacts to the reports.

Let's take a look at some interesting charts to get a clearer picture of the action that took place last week. This week we will take a look at the Nasdaq, the DOW, and a representation of the Oil Sector with the ETF United States Oil Fund, and the ETF SPDR Select Financial Sector XLF.

NASDAQ

6 Month Chart with Daily price bars.

Here is the 6 month chart of the Nasdaq. The white arrow represents the first day of the rally. Monday, July 21 will be day five of the new rally attempt so some time next week we would like to see the Nasdaq confirm this new rally with a volume surge of 1.75% higher than the previous days volume. The Nasdaq does have some overhead resistance at 2375 that we will have to watch out for.

The DOW:

The DOW is trying to clear the 11,500 resistance point. It's nice to see volume start to kick back in to the buy side of the DOW. Monday, July 21 will start day 4 of the DOW's rally attempt, if it can pass this test the next stop is 12,000.

The Untied States Oil Fund ETF: USO

Last week we showed you the perfect upwards channel that USO was on. What a difference a week makes. USO ricocheted off its top channel line and crashed right through its bottom channel support line. There were 3 days of heavy selling and if this selling keeps up we could see USO test its last low at $100.

Correlation: Oil dropped big, the Stock Market has nice gains.

The SPDR Financial Select ETF: XLF

XLF has been on a perfect down trend, but on Friday of last week XLF was trying real hard to bust through the upper resistance level of this down trend. Volume really began to surge on the buy side. If earnings tend to not be as bad as expected like we have seen from Citigroup and JP Morgan we may see a continued push up to the $24 level.

What needs to happen next week in the markets?

As we have discussed for weeks now, the Oil Sector must continue to decline, the Financial Sector must sure itself up, and The Big Investors must feel it is safe to start accumulating equities again.

We now have a new rally attempt starting from the major indexes with days 4-9 coming next week, and there is an attempt from the OIL Sector and the Financial Sector to break through previous long term boundary lines. This week will be an interesting week for the major indexes, so watch closely.

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Top 10 Industries:

Energy - Other
Oil & Gas US Explor. Prod.
Mach. Gen Industry
Oil Gas Drilling
Chemical-Fertilizers
Oil and Gas Field Services
Oil and Gas Machinery/Equip.
Retail Discount Var.
Steel Producers
Electric Contract Manuf. ** Bigger Mover from 35 to 10 in 3 months**

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	37.32	0%			0.13
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		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

TOTAL x 100 Shares:									15120

** 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. Remember if we head into another big correction, it is best to start turning to cash now. You should be out of all other F.I.T. Stocks at this time as we have either hit our profit targets or the stop loss.

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The F.I.T. STOCK PLAN

This week we have 2 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!

**IMPORTANT NOTICE** This week we are listing two F.I.T. Stocks as buy candidates. Please remember at this time we are still in a correction. This week will start days 4-9 for the major indexes to confirm a new rally attempt. Therefore these 2 F.I.T. Stocks are on our watch list so that we are ready if the new rally does confirm. If you do enter either of these investments go lightly at first to see how they react to the market conditions. Most of all be disciplined with your investment plan and stick with your sell rules with no questions asked.

* All Charts are One year time frames with weekly price bars *

Stock: International Business Machines

Symbol: IBM

Fundamentals: 9.6 out of 10

Industry: Computer Tech. Services Industry Strength: 30

Technical Pattern: U TURN Avg. Volume: 7,837,700

Pivot or Buy Point: $130.13

Stop Loss: $121.03 or 7%

Profit 1: $143.13 or 10%

Profit 2: $156.13 or 20%

BIG BLUE is back! IBM has been holding up remarkably strong during this market correction. Last October through February IBM formulated a nice Double Bottom Pattern. IBM broke through this pattern and 5 weeks later consolidated for 3 weeks building somewhat of a handle. This handle was penetrated through at the beginning of April soon after the last market rally confirmed of March 20, 2008. Since the beginning of January volume to the buy side has been phenomenal as big investors began accumulating this stock. IBM now rest within an 8 week U TURN base and buy side volume has kicked in once again by the Big Money as seen on the right side of the chart. IBM rest just 11 cents under its previous high and if it can continue this push upwards on good volume let's look to get involved at $130.13.

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Stock: Quanta Services Inc.

Symbol: PWR

Fundamentals: 9.7 out of 10

Industry: Building Heavy Construction Industry Strength: 27

Technical Pattern: Cup with Handle Avg. Volume: 2,348,800

Pivot or Buy Point: $34.73

Stop Loss: $32.30 or 7%

Profit 1: $38.20 or 10%

Profit 2: $41.67 or 20%

Quanta Services provides specialized contracting and related services to the electric power, gas, cable TV, and telecom industries. Annual EPS is expected to rise 121%. Last quarter sales were up 48%. PWR has built a perfect Cup with Handle Pattern that started last November of 2007. The Cup part of the base shows 6 weeks of accumulation with last week being the heaviest. We are now into the 5th week of the Handle and if prices can break above the high of the handle on a good volume swell let's jump in at $34.73.

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

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