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According to The PPT algorithm, here are the top ten industries in the entire market today, ranked by percentage movement in terms of how the proprietary algorithm calculates each industry’s fundamental and technical scores, and the average thereof. You can see that the homebuilders and semis are very strong.
Please click on the photo below for a full size view.
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The price action in auto dealership stocks is telling you loud and clear that pent-up auto demand is starting to materialize. You can cite all of the economic data that you want, but at the end of the day if you are a stock trader then all that matters is how the market interprets that data, and how the big money players position themselves. The weekly charts of virtually every single stock in the industry are as properly set up and technically sound as you will see in any corner of the market. Indeed, there were promising signs in this group in 2011, although these stocks bounced around randomly along with the broad market at various times during the year. This time around, they may just be ready for a steady move higher.
Just as with the casual dining stocks that I profiled yesterday, these auto stocks are a strong group worth monitoring closely on the long side in the coming weeks. Also note that we are now in earnings season, so being cognizant of when these firms are reporting is important for swing traders.
Members of The PPT and 12631 can click here for a full list of stocks in the auto dealership industry, sorted by PPT Technical Score.
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Of the high growth, broad market momentum leaders since 2009, Chipotle Mexican Grill had arguably held up the best during the turbulence in the latter-half of 2011. Indeed, CMG continues to be one of the leaders in this group and the market as a whole. Beyond the burrito empire that is Chipotle, though, there are too many other improving charts in the casual dining space for me to post all of them here.
Panera Bread Company hit all-time highs on Friday, as a play on bagels/coffeehouses/soup & sandwiches, free WiFi for single, attractive, young female teachers to grade papers (oops, did I say that out loud?). On that note, Caribou Coffee Company saw a strong weekly breakout, as a coffeehouse/K-Cup play. Thus, I would be remiss not to include Einsein Bros. Bagels (Einstein Noah Restaurant Group, Inc.) as a speculative play in that space. In addition, there are sleeper names like Red Robin Gourmet, which broke out on strong buy volume to finish last week, despite the broad market’s opening gap lower Friday morning.
We are now in earnings season, and the overall market still needs to continue to prove itself. Thus, I am not getting carried away with a “Casual Dining or Bust!” battle cry here. However, the group as a whole is vastly improved, and is showing impressive relative and absolute strength, which is why it merits your close attention in the coming weeks.
Members of The PPT and 12631 can click here to see every stock in the entire industry sorted by PPT Technical Score.
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The miners might be trying to carve out a major bottom here. For months, I had profiled the bearish price action, despite steadfast gold bugs hoping to bottom-fish with success. Recently, the GDXJ, ETF for the junior gold miners, printed a weekly hammer candle with upside confirmation. The overall trend is still lower, so there is much work to be done in order for the group as a whole to reverse course. Nonetheless, I suggest watching the likes of AUY and BAA closely as they have been improving and are now viable setups.
Members of The PPT and 12631 can click here for my “12631 MARK TWAIN’S LIARS” screen, showing which miners have the highest score according to The PPT proprietary algorithm for Relative Strength.
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With the bears proving to be clawless, thus far in 2012, until we see them do more than growl you can expect to see more squeezes. The mortgage insurer, and broadly the surety and title insurance sectors, have been dismissed as trash for several years since the MBS/CDS bubble burst in the wake of the housing crash. Currently, though, many of the stocks in this industry are sporting enticing setups on the long side. Loaded with numerous shorts who could easily be squeezed hard, they are worth keeping on your monitors tomorrow and beyond, should the market keep fighting off a nasty reversal.
Members of The PPT and 12631 can click here for a full list of stocks in the relevant industry, sorted by The PPT Technical score.
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With the news over the weekend that Bristol-Myers Squibb is buying out Inhibitex for a huge, jaw-dropping premium, I would be remiss if I did not delve into INHX‘s business model and focus. Inhibitex is a smallish biotech firm centered around dealing with viral infections, but its focus looks to be on chronic infections caused by Hepatitis C Virus (HCV). With such a huge premium being paid from BMY, it would behove you to look at other biotech firms that deal with HCV.
Inside The PPT service, we have a great keyword search function that allows members to pinpoint their research, thus working smart. Members of 12631 can check the main blog inside 12631 for my post inside the service with more specific ideas and strategies as to how to prepare for possible pin action plays on the Inhibitex news this coming week.
One idea that looks good regardless of pin action is Achillion Pharmaceuticals. As you can see below on the daily chart, the setup is enticing on its own merits of the bullish price action and volume pattern. Also note that, on the whole, the biotech ETF chart (IBB) is as impressive as any sector right now.
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