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Mar 30

Review Of Open Positions – Stocks

In this holiday shortened week to end the first quarter, we were reasonably active adding 4 new positions: Cerner ($CERN), and Packaging Corp ($PKG) which we detailed here, as well as Corning ($GLW) here and IBM ($IBM) here. All four are off to a winning start, continuing to show strength as the market moved to all time highs.

We also got stopped in Magellan Health ($MGLN) here, and with Thursday’s close our stop on JPMorgan ($JPM) was triggered, which will execute at Monday’s open.

This leaves us with 29 open positions. As always we’ll go through the losers first, then the winners, highlighting any charts worthy of comment.

Here are our 2 losers:-

Michael Kors ($KORS) -3.8%

Despite remaining on the losers list $KORS improved and really showed its mettle this week when it had looked almost inevitable it would trigger our stop with a close below that $55 area. It flirted with it for another two days before rebounding strongly on Wednesday, and staged a modest follow-through on Thursday. It still has a lot of work to do, and our stop now looks to be a very obvious one, which potentially makes it subject to a false break, but regardless as previously discussed we will stick with it and exit if it’s breached cleanly.

AlphaCapture

 

PerkinElmer ($PKI) -4.4%

$PKI has been poor from the very beginning with our entry being just 6c shy of the peak for our holding period so far. It managed to produce a bounce on Thursday from just above support which was probably expected after 5-6 days down. It’s poor action in a market making new highs, but it’s still rangebound overall and within our risk parameters for the position, so there’s no need for us to act until something changes.

AlphaCapture

 

The remaining 27 positions are all winners:-

SolarWinds ($SWI) +3.8%

$SWI’s gain on the week may have been small, but its price action was of much greater significance having ventured toward support around $57 on 4 occasions and been sent packing every time. The last rebuttal on Thursday was the strongest of them all, suggesting it may not pay another visit in the near future. The only fly in the ointment was the increased volume on each decline, and the relatively muted volume on the advances, but it may have done enough price-wise to see some follow-through to the upside in the coming weeks.

AlphaCapture

 

Green Mountain Coffee ($GMCR) +22.1%

Rapidly becoming one of my favorite positions, $GMCR is simply unrecognizable to its former self. We’ve certainly seen it put together a smart uptrend before, but it’s the lack of volatility I’m referring to. This used to a high-beta name that would swing wildly with every market twist and turn. Yet what has it done as the market digests every nuance in the Cyprus headlines? It’s had the shallowest of retracements, with narrow daily ranges, and then effortlessly moved to fresh highs. I’m speculating, but it’s almost as if there is a significant limit order being worked around that $55 level absorbing any supply in the name during market weakness.

AlphaCapture

 

Aruba Networks ($ARUN) +5.7%

LinkedIn ($LNKD) +42.2%

Google ($GOOG) +4.6%

$GOOG had been behaving perfectly well, pulling back to that first support area around $806, and it looked as if any weakness would be contained there, but the last two high-volume bars of Weds/Thurs have potentially done some damage. We broke the 10-wk (not shown) and now have $790 and the 50-day in view. We’ll treat it on an individual basis as we always do, but this kind of weakness for a previously strong market leader is a worry.

AlphaCapture

 

Time Warner Inc ($TWX) +13.0%

Computer Task Group ($CTGX) +4.8%

PolyOne ($POL) +6.0%

Valeant Pharma ($VRX) +12.9%

Visa ($V) +6.8%

In last week’s review we stated “It feels like this one has been setting up forever, but this remains one of my favorite charts without having much to show for it. $V’s long-term chart is still something to behold and an entry here looks as attractive as it did when we first entered over 6 weeks ago.” This week we were duly rewarded with a high-volume breakout to all time highs, which followed through to complete a spectacular 5-day advance.

AlphaCapture

 

Hertz ($HTZ) +22.2%

$HTZ continues to look very strong. It’s had plenty of headline moments and noise along the way, but those who have kept their eye on price and trend have been handsomely rewarded with another move higher last week.

AlphaCapture

 

On Assignment ($ASGN) +3.4%

Ameren ($AEE) +5.5%

Dominion Resources ($D) +6.6%

Sempra Energy ($SRE) +4.9%

Wisconsin Energy ($WEC) +8.0%

I can’t remember the last time I had a double-digit gain in a utility stock, but this one is getting very close. We have 3 other utility longs in $AEE, $D, and $SRE, they are all good charts, but it’s almost as if they take it in turns to break higher and lead the sector advance. This week it was $WEC’s turn and it did it in some style.

AlphaCapture

 

Sprint ($S) +5.1%

$S had a very constructive follow-through to the previous week’s breakout, pulling back to retest the level, before consolidating and resuming the move higher to end the week with a fresh closing high.

AlphaCapture

 

Fifth & Pacific ($FNP) +7.3%

Nike ($NKE) +8.2%

Range Resources ($RRC) +4.8%

Microchip Tech ($MCHP) +0.7%

HCA Holdings ($HCA) +9.1%

What a great week for $HCA, picking up where it left off and posting another 4 straight all time high closes. When you see a chart like this you don’t even need to look at any other details, price is telling you everything.

AlphaCapture

 

Corrections Corp ($CXW) +2.0%

Cerner ($CERN) +2.0%

Packaging Corp ($PKG) +5.3%

Corning ($GLW) +1.9%

IBM ($IBM) +1.7%

 

 

4 comments

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  1. Chris

    Jon, when you have reached the maximum number of open positions but find some new potential stocks, will you consider selling the underperformers (like $PKI in the above list)?

    1. Jon Boorman

      I don’t have a set maximum number of positions, that way it can effectively act as a filter to the opportunities out there. I wouldn’t close underperforming positions to make way for new ones. Even though every new position feels best at the point of entry, in reality it has no greater probability of being successful than any other. Positions are only closed when the entry rationale has been invalidated. We’ve had plenty of stocks that languished for a while longer without invalidating before resuming strong uptrends, Visa $V and Nike $NKE being two recent examples.

      1. Chris

        Ok, thanks. One of the reasons I asked this was that I recall you exited the $GOLD trade (in your Mar 13 post) as price was entering a long consolidation. So I thought it may not be a bad idea to sell something not moving and replace it with another opportunity.

        1. Jon Boorman

          No that was a futures position, it has no relation to the equities positions, the futures portfolio takes signals on ten different futures contracts.

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