Wednesday, April 27, 2011

Active Screen - CANSLIM: Top 8 for April 27th

There were a couple of changes to the top-8 constituents this week. Dropped were Intuitive Surgical (ISRG) and Free McMoran (FCX), returning were Netflix (NFLX) and F5 Networks (FFIV). The complete list is as follows: Apple (AAPL), Vale S.A. (VALE), Barrick Gold (ABX), Baidu (BIDU), Research in Motion (RIMM), Cognizant Technlogy (CTSH), Netflix (NFLX), and F5 Networks (FFIV). The Screener setup was as follows:

Apple (AAPL) pushed a rally off head-and-shoulder neckline support, but it hasn't yet negated the bearish pattern. To do this, a rally past $363 (preferably on volume) is required. Strong earnings gives bulls the impetus to do this.

Zignals Chart Image

Vale S.A. (VALE) is still under the influence of its bearish head-and-shoulder pattern. An intraday reversal yesterday took the index away from resistance defined by the right-hand-shoulder high at $34.60. It's lingering close to its 50-day MA and looking vulnerable to another push lower.

Zignals Chart Image

Barrick Gold (ABX) is caught in a 50:50 make or break. The original break of $54 was undone by resistance at $55.50. This led to a rapid, heavy volume sell off back to triangle support. However, in doing so it took out its 50-day MA. Buyers will look to support as an opportunity, but the volume and rate of decline suggest there will be few takers if the stock drove through its 200-day MA.

Zignals Chart Image

Baidu (BIDU) was little changed on the last update. The rally continues its steady advance, going from $146 to $152.

Research in Motion (RIMM) has found a bid around $53.30, but there is work to do to regain its 200-day MA at $56.41. The large breakdown gap from late March (@$62.79) remains the dominating influence.

Cognizant Technology (CTSH) pulled away from its 50-day MA as part of a broad advance.  It is currently negotiating $82.75 resistance which if successful will mean a new multi-year high for the stock. Bullish.

Netflix (NFLX) returned to the top-8 after a brief absence. Tuesday saw the stock drop towards its 50-day MA which has held as support in the past. Selling volume was heavy so there may be sufficient impetus to drive it lower. However, the 50-day MA has been key support in this multi-year rally so shouldn't be discounted easily.

Zignals Chart Image

Finally, F5 Networks (FFIV) makes a less than stellar return to this list. While the stock qualifies on a fundamental basis, its price is caught beneath 50-day and 200-day MAs. The stock gapped down big in January and has struggled to make any headway against the overhead supply generated by the selloff. One to watch for improvement, but it could be a while before it does.

Zignals Chart Image

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