Friday, September 23, 2011

Active Screen: CANSLIM September 23rd

With the shaken-and-stirred action of the past few few days fresh in the memory, how has it panned out for our top-8 Active Screen stocks over the past couple of weeks. Our active stock screen used the following criteria:

The results were little changed, which highlights one of the weaknesses in fundamental screens in its failure to accomodate for momentum - Energy/Commodity stocks are getting killed out there; five of the top-8 (by Market Cap) belong to this underperforming sector. In defense of this scan, the 'M' of CANSLIM would remove all of these stocks from consideration.

Luckily, top dog remains Apple (AAPL). The consolidation played out to form, the tightening action eventually breaking in the direction of the trend (as dictated by the 200-day MA), i.e. higher. Important for the stock going forward is it remains above the consolidation - which really means holding above $390. Secondary level of support between $353-363.

Zignals Chart Image

Second place Vale S.A. (VALE) followed through on its bear flag; breaking below consolidation support, but also losing the July reaction low of $24.32. Rough times ahead. If a measured move was to evolve from this then another 24% could be trimmed off the price from the breakdown; this sets a downward target of $20.14.

Zignals Chart Image

Third place was Rio Tinto (RIO). It suffered a similar fate to Vale S.A. in breaking the Bear Flag and moving lower. Little to recommend at the moment.

Oracle (ORCL) was dropped so in fourth place is promoted Barrick Gold (ABX). Not surprisingly, Barrick Gold (ABX) suffered the same fate as its peers, dropping over the past couple of days, but not enough to see a challenge on trading range support. The stock has had a quiet 2011, but this low key approach may benefit it given the general carnage in the sector.

Zignals Chart Image

Prior weakness in Baidu (BIDU) resulted in the break of channel support. A break which was accompanied with higher volume, a confirmation of the breakdown. It's  currently on the way to testing $115 support.

Zignals Chart Image

Another commodity stock on the rocks holds sixth spot. Free McMoran Corp (FCX) had already lost support in early August, so this week's selling just piled on the pain. $33 support is now resistance. The best hope for bulls is a higher volume rally which closes above $33 over the next couple of days. If this was to happen then a 'bear trap' would emerge and a rally towards $42 favoured.

Zignals Chart Image

In seventh spot is Priceline (PCLN). The potential 'bear' trap has instead evolved into a wider, yet narrowing, consolidation. It's going to take a little longer for this consolidation to resolve. For now, it's above the 200-day MA with rising support just below.

Zignals Chart Image

In eighth spot is Yanzhou Coal (YZC). Unfortunately, the stock is in freefall since it lost $36 support at the start of August. It currently trades at $22 and doesn't look like it will be going higher anytime soon.

If you are interersted in creating your own CANSLIM stock screen you can do so here. You can read more, and watch a video, on creating an active stock screen here.


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