Friday, April 15, 2011

Active Screen - CANSLIM: Top 8 for April 15th

Original post from April 15th; updated comments based after the close April 20th

For another week there was no change at the top (ranked by Market Cap): Apple (AAPL), Vale S.A. (VALE), Free McMoran (FCX), Barrick Gold (ABX), Baidu (BIDU), Research in Motion (RIMM), Cognizant Technlogy (CTSH), and Intuitive Surgical (ISRG). The Screener setup was as follows:

Apple (AAPL) is looking very vulnerable at $330. Might not take much for it to test $325 which is where the tears will really start to flow if the latter price breaks. The head-and-shoulder projection is for a move to $285, altough there is a prior band of support between $295 and $300 which is a more likely target. [April 20th: Apple eventually dropped to test $320 in what looked to be a stop knockout and recovery. Still has work to do to hold $325 on the next fall with the 50-day MA lying overhead to offer supply. However, strong earnings look set to put any worry to bed and gives bulls an opportunity to turn the 50-day MA from resistance back to support].

Vale S.A. (VALE) is also showing what amount to the latter stages of a head-and-shoulder reversal. A break of $31 confirms and sets a target of $25, which is the congestion zone of last summer. [April 20th: Defended 200-day MA for a second time in the past couple of months. Converging 50-day and 200-day MA is squeezing long and shorts to a point where one side will break]

Zignals Chart Image

Free McMoran (FCX) having risen to challenge $58 has since headed South, slicing its 50-day MA with relative ease. The 200-day MA currently sitting just below $48 is a likely downside target. [April 20th: Toying with its 50-day MA having crossed above it yesterday - no firm direction]

Barrick Gold (ABX) has held its gains better than most. The 50-day MA at $51 offers a good place for stops if holding or looking to buy. Broader pattern is one of a consolidation, bound by $46 support and $55.50 resistance. [April 20th: Driving towards resistance on reasonable buying volume. Nicely primed for a break of $55.50; one to watch]

Baidu (BIDU) continues to fire on all cylinders. The rally is shaping to go parabolic, but hasn't exhibited the heavy volume typical of such a move. Suspect there will be a lot of stops just below $135. If prices were to break $135, watch for a spike low (i.e. rapid fall and equally rapid rise). Traders buying the stop-hits would be looking for a retest of whatever high the rally made prior to the break of $135. Nothing to suggest any of this will happen, but it makes for a good Alert. [April 20th: One of the few stocks to have a disappointing Wednesday. However, it's recent performance has outranked many on this list.]

Research in Motion (RIMM) keeps leaking price having lost 200-day MA support. Little to recommend it at the moment. [April 20th: Maybe buyers are trying to build support at $53, but it remains stuck under its 200-day MA at $56.39]

Cognizant Technology (CTSH) has enjoyed a solid rally, peppered with brief sallies below its 50-day MA. It looks likely to test the 50-day MA again early next week, but every test weakens it as support. Should the 50-day MA break then support kicks in at $72 and the 200-day MA just below $68. [April 20th: Pulls away from its 50-day MA, albeit on low volume. Time to consolidate its strong advance?]

Finally, Intuitive Surgical (ISRG) is consolidating its advance from $320 to $375. The stock looks to be shaping a cup-and-handle pattern with a neckine at $385. Could be one of the better stocks for the latter part of 2011. [April 20th: Buyers chased action elsewhere on Wednesday to the detriment of ISRG which saw some higher volume selling. Will sideline money wait for another test of the 50-day MA before jumping in?]

Zignals Chart Image

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