Wednesday, May 11, 2016

Short-term presentation is improving - as of close on May 10

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As expected, Tuesday's LCR table is showing that we may be hitting a local low and are due for a rise:

Click on the image to enlarge.

The left column shows the LCR, and if you look closely, it rose +5%.  Not a huge amount, but a positive change in a sea of red.

The left side of the table shows that on a day-over-day basis we are still dropping in terms of the number of stocks that are outperforming their historical, optimized averages.  N = 3054 so the number of measurements is significant.  The left side of the table indicates that I should be cautious.

The right side of the table shows one day of "green", e.g., the day-over-day change of the left side of the table is positive.  The right side says "get your shopping lists ready".  The left side says "we are too early to enter en masse".

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The NYSE Cumulative Tick chart is also short- and medium-term bullish:


Click on the image to enlarge.

I've covered this and the LCR table to a large extent in my newsletters, so please take the time to read those.  Here's the latest:   goo.gl/e75Ayj

There is nothing bearish about the CT chart, at least as of the close of markets on Tuesday.  These are all short-term bullish patterns.

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Three dividend stocks that are worthy of  consideration here are

CLX
DPS
EXR

All are pushing new 52-week highs.  All have decreasing volatility.  All have signs of big-boy institutional buying, even at these levels.  

I like CLX above 132.99 with an initial stop loss of two closes below 127.81.
I like DPS above 95.88 with an initial stop loss of 93.24
I like EXR above 94.13 with an initial stop loss of 91.10

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On the Leaders front, high on my radar are:

BANC
FB
UFPI

BANC is holding the 21d EMA very tightly.  A gap fill back to 19.87 and a subsequent breakout above 19.87 would be bullish.  This stock appears to be being accumulated by institutions.  Surprisingly, there is little overhead resistance above 20.00, and a close above 20 would likely turn it into support and then we could see a major move upwards.  There is some supply resistance at 20.64 and the new 52-week high is 20.85, adding a bit more of supply resistance.  Nevertheless, worth of watching.

FB continues to perform well, but volume is extremely low since the gap up on 4/28.  After dipping below the 21d EMA yesterday, it recovered nicely and finished strong.  Huge-huge-huge support at 117.51, so a natural stop loss could exist there.  A close below 116.57 would make me re-evaluate my long position -- for now I intend to hold and possibly add if it breaks out from here.  This is a new "bowtie" breakout of the 8d, 21d, and 34d EMAs.  A close above 120.79 on volume would be a huge signal to enter.

UFPI may allow an entry above 84.16, and if this occurs, two good support points are 83.90 and 82.60 (with additional support at the 50d MA at 82.17).  Pick your poison - well defined stop losses.  If UFPI can close above 87.34 there is virtually no overhead supply resistance so this could take off.  The stock appears to be accumulated using Effective Volume tools.  This is a new "bowtie" breakout of the 8d, 21d, and 34d EMAs.

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I'm on the sidelines for the most part.  I still continue to hold COR, CTWS, EFX, FB, FIVN, FIZZ, and a position in VXX, as well as a few puts in EBIX, IPHI, and VXX.

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As with all my ramblings, you are responsible for your own investment decisions and I am not.  Please do your own diligence, and please take ownership for your actions.  The stocks I have listed here are not recommendations -- they are seeds for you to do your own research.

Regards,

pgd