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I am an independent investor writing at Scott's Investments ( My site is dedicated to discussing and publicly tracking historically successful investments strategies and sharing free investment resources. I emphasize empirical, historical, and quantitative... More
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  • 17 Breakout Momentum Stocks 0 comments
    May 16, 2011 9:52 PM | about stocks: AAP, ALKS, ARTX, CNTF, DDS, DF, ESD, FEIC, IPAR, IPSU, CASC, PSMT, R, RPTP, SCLN, SSRX, SWX, UTEK
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    Each week I publish stocks to watch for the upcoming week as potential momentum trades. The stocks below all have a 50k minimum average daily share volume and traded at a 52-week high on strong volume, with a minimum of two times relative volume on Friday, April 29. In addition, stocks were required to close Friday higher than the open price.

    Last week's list of 25 stocks returned an average of 2.55% versus -.12% for SPY. Purchasing the entire list of stocks may not be feasible for individual investors. However, with this list we can identify stocks with high price momentum that may be viable short to intermediate term trading candidates, and, in some cases, long-term investments.

    This week we have 17 stocks and ETFs qualifying for the top momentum securities. This tells us that positive price momentum continues to wane, as exemplified by the overall equity markets performance for last week. 

    I continue to be intrigued by PriceSmart (NASDAQ:PSMT), a stock appearing on last week's list.  After another big up day on Monday, it spent the rest of the week maintaining its gains and consolidating. I would look for it to make a larger move this week, either finding support near $42 or continuing to trend higher. For the time being, positive price momentum is on its side:

    One stock which caught my eye on this week's list is SciClone Pharmaceuticals (NASDAQ:SCLN).  I do not claim to be an expert on drug stocks, but the technicals on SCLN look attractive. In addition, this small cap drug manufacturer currently trades at a forward P/E of 8.06 and Price-Earnings-Growth of .68. The company also has very little debt and strong free cash flow, currently trading at price-free-cash-flow ratio of 12..95.  The company recently acquired NovaMed and in their recent quarterly earnings announcement, the company expects 2011 earnings per share to be between $.52-$.57, excluding charges and write-offs related to the NovaMed acquisition. 

    The company is currently under investigation by the SEC and Department of Justice for possible violations of the Foreign Corrupt Practices Act (OTCPK:FCPA).   Until this investigation is complete and any potential penalties are made public, the stock carries some added risk. 

    Data and Chart Source: Finviz

    The entire list of 17 stocks as well as the current performance can be viewed on the right hand side of Scott's Investments.

    Ticker Company Industry Trend Score 52-Week High Relative Volume Price Change
    AAP Advance Auto Parts Inc. Auto Parts Stores Here 3.34% 2.24 72.16 3.96%
    ALKS Alkermes, Inc. Drug Delivery Here 4.13% 3.68 17.75 4.32%
    ARTX Arotech Corp. Industrial Electrical Equipment Here -4.13% 3.62 2.32 0.87%
    CNTF China Techfaith Wireless Communication Technology Limited Diversified Communication Services Here 3.20% 2.58 5.81 5.83%
    DDS Dillard's Inc. Department Stores Here 13.40% 4.82 56.02 15.29%
    DF Dean Foods Co. Dairy Products Here 5.59% 3.3 13.41 9.20%
    ESD Legg Mason Partners Income Trust - Western Asset Emerging Markets Debt Portfolio Closed-End Fund - Debt Here 2.18% 2.65 19.68 2.39%
    FEIC FEI Co. Scientific & Technical Instruments Here 0.00% 2.93 39.49 1.70%
    IPAR Inter Parfums Inc. Personal Products Here 2.50% 2.55 20.75 3.73%
    IPSU Imperial Sugar Co. Confectioners Here 1.56% 3.3 15.66 5.81%
    ONTY Oncothyreon Inc Biotechnology Here 6.87% 6.52 5.91 7.45%
    R Ryder System, Inc. Rental & Leasing Services Here 0.68% 2.82 55.05 2.92%
    RPTP Raptor Pharmaceuticals Corp. Diagnostic Substances Here -2.48% 5.42 3.94 5.07%
    SCLN SciClone Pharmaceuticals, Inc. Drug Manufacturers - Other Here 8.38% 5.33 5.56 8.38%
    SSRX 3SBio Inc. Biotechnology Here 4.66% 2.97 19.99 6.10%
    SWX Southwest Gas Corporation Gas Utilities Here 1.49% 5.63 40.3 2.88%
    UTEK Ultratech, Inc. Semiconductor Equipment & Materials Here 1.54% 2.33 33.54 3.30%

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