Wednesday, July 27, 2011

Active Screen - CANSLIM: Top 8 for July 27th

It was another steady list of qualifying stocks for our CANSLIM scan. The top-8, ranked by Market Cap, were unchanged from July 14th.

The CANSLIM stock screener settings employed were:

Top dog, leading from December 2010 when the scan was started, is Apple (AAPL). AAPL had already cleared its prior trading range before blowout earnings hit the tape. So the good news was really just icing on the cake. The gap from $374 is likely to be tested at some point and at $400 the stock is looking pricey in the short term. Although a similar move in September 2010 paused very briefly before it marched higher.

Zignals Chart Image

In second spot is Vale S.A. (VALE). It too had emerged from a channel with a solid enough break and close above the 200-day MA. Since then it has stayed close to its 200-day MA without attracting any serious buying interest to push it higher. Not one to get too excited about from a 'jump in with two feet approach', but a dip in the water over time may yield dividends.

Zignals Chart Image

In third place is Baidu (BIDU). The stock had emerged from a tight downward channel in late June before easing on approach to its 52-week high. The stock did post a new multi-year high without ever attracting strong buying interest. Not until earnings struck the tape on Jul 26th did numbers arrive. The day finished with an indecisive (bearish 'shooting star') doji which marks a balance between buyers and sellers. For the stock to make further gains the number of profit takers will need to fall, which given the current uncertainty on US debt limits is unlikely to happen.

Zignals Chart Image

Barrick Gold (ABX) has the fundamentals to back it, but price action has been tepid. However, it has been able to break above its 200-day MA, but hasn't done more than that.

Zignals Chart Image

Cognizant Technology Solutions (CTSH) moved from a steady gainer to a volatile decliner. Since the start of July price action has become very constricted, usually a precursor for a big reaction swing move. The boundaries of the channel have not been violated, but if resistance breaks on volume there should be the momentum to see the 52-week high in the $83s tested.

Zignals Chart Image

Netflix threw itself into the firing line when it announced a rate hike alongside its earning release. The market response has been unkind and yesterday saw a heavy volume break of the 4 1/2 month channel (attempting a recovery today - but is it too little too late?). Favoured outcome is a test of the 200-day MA, last achieved in early 2010 when the stock was around $50.

Zignals Chart Image

Agirum (AGU) continues to play the role of 'sleeper'. Makes modest gains towards psychological $100 resistance. One for Alerts; set for a break of $100.

Zignals Chart Image

Finally, Silver Wheaton (SLW) has been in the (slow) process of building a new right-hand-side base. The volume buying which kicked a break of $37 has eased somewhat, but as long as it holds $37 support it should be okay.

Zignals Chart Image


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