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The market is overbought and it’s time to protect our winnings from the past week or so, they are extensive. I peeled back some exposure on the long side from names that had run too far too fast (a great problem to have). They include Titanium Metals Corp. (TIE), OmniVision Technologies (NASDAQ:OVTI), Finisar Corp. (NASDAQ:FNSR) SkyWorks Solutions (NASDAQ:SWKS) and Power-One (NASDAQ:PWER). I will be looking to add back to these positions in a few days after the market and the individual names work off their overbought readings and give better secondary entry points.

I’m letting positions in Cummins (NYSE:CMI), Westport Innovations (NASDAQ:WPRT) and Dolby Labs (NYSE:DLB) run, they were all showing good strength yesterday and aren’t yet overbought. They can withstand a broader market consolidation and move higher in my opinion. Cummins reported great earnings Monday night, I will be adding to the position again most likely in a few days.

Isilon Systems (ISLN) doesn’t want to stop after being up more than 25% last week. As I said previously, this is what we call a runaway gap, it almost always leads to higher prices and a longer term up trend. It’s hard to be buying more of this name here as it is extremely extended, but I will be bellying up to the table in a day or two after the market peels back a little.

Don’t be afraid to average up on your winners here in a few days. If this market really is getting healthier, this is just the beginning of a longer trend. Find your secondary entry points and execute. Don’t chase stocks here.

If you’re looking for some hedges for your longs, look in the steel space. Nucor (NYSE:NUE), that flag looks pitiful and I believe it eventually breaks to the downside unless we are at some kind of an overall market bottom a la March 09.

I will also be looking to add a few new names on the long side once this consolidation/pullback is completed. Look for entries to Cree (NASDAQ:CREE), Radware (NASDAQ:RDWR), STR Holdings (NYSE:STRI), MercadoLibre (NASDAQ:MELI), Aruba Networks (NASDAQ:ARUN), American Tower Corp. (NYSE:AMT), SBA Communications (NASDAQ:SBAC), Cognizant Technology (NASDAQ:CTSH), Riverbed Technology (NASDAQ:RVBD) and a few others. Obviously I won’t be taking all, but 3 or 4 is likely.

If you’re into the slower low beta names, McDonald's (NYSE:MCD), Companhia de Bebidas Das Americas (ABV), Smucker (NYSE:SJM) and a bunch of others look great here. They are a little too low beta for me, but if I was a little more risk averse I would be in these names for sure.