Every time I sit down to write one of these articles, I usually don't know where I'm headed. I spend hours looking for patterns: chart patterns, high
probability setups, strengthening stocks that happen to be all in one sector, and so on. Sometimes I watch a pattern form over several weeks and finally
mention it in my newsletter just as it starts waving a flag that everyone will notice.
Many stocks are currently overbought. But that won't keep them from moving higher. My article Trading high price stocks and new highs shows this
is how many professionals make huge gains – they identify strong stocks breaking out, and regularly add to their positions as the stocks keep setting
But the pattern that popped up today put me into a predicament. There currently is a preponderance of ‘P‘ stocks protruding to new highs. What
penetrating analysis I thought I could provide. Of course there's Parker Hannifin (PH), Polaris (PII), Perkin Elmer (PKI), and Pentair (PNR). It's good
to see these types of stocks showing strength, as that may show either an increasing economy or at least increasing faith in the economy.
There's also Praxair (PX), PPG Industries (PPG), and Air Products and Chemicals (APD – hey, it has a P in the symbol). What stands out with these three stocks is they are all in the top 10 holdings of XLB, the Materials Select Sector SPDR ETF. XLB is not only marching upwards nicely, it's On Balance Volume indicator is gaining strength, an indication of net buying in the major stocks in that sector.
Are you getting imPatient for more P stocks that may show an imProving economy ? I'll leave this for reader homework. Here's a few hints – one's a beverage company, one's a home builder, one's an oil & gas drilling/exploration company, and one is an insurance company with commercials that ‘Flo' along. You will find they are all in sectors showing strength (now I'm into S‘s).
Many of the above stocks have strong seasonal charts right now, meaning they have track records of good gains this time of year. An interesting trade on the earnings release of one of the above stocks is covered in today's Seasonal Forecaster newsletter. To find out more, click here: www.markettamer.com/seasonal-forecaster
By Gregg Harris, MarketTamer Chief Technical Strategist
Copyright (C) 2013 Stock & Options Training LLC
Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.
Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.
Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.
As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.
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