John V.'s  Instablog

This weeks results from my Super Stock Screener.  Screening is an excellent starting point for finding winning stocks.

My thoughts:  This week the market pulled-back as it it could not maintain the steep upwards angle of increasing stock prices.  That is always the problem with V-shaped chart patterns in that prices go up so fast that they outrun the number of available buyers in the market, so when people decide to sell some they find that the buyers have gone missing, so prices end up falling more than expected.  However, to anyone familiar with V-shaped patterns this pull-back was more or less expected.

The real test will be going forward as the number of buyers and sellers becomes more balanced.  I expect the market to rise but much more slowly, and since earnings season is now upon us one has to expect a fair amount of volatility to occur. 

The latest Super Screener results have held steady as there are now 48 stocks compared to the July 10th screen which had 49 stocks.  A drop of only one name is nothing to be concerned about and shows how the underlying strength in stocks enabled them to ride out what seemed to be a bad week.

One notable thing I see is that many of the former leaders that came back to the screen like Acme Packet (NASDAQ: APKT) and Aruba Networks (NASDAQ: ARUN) demonstrated how they really are not leaders anymore.  They had just enough gas in the tank to get noticed but did not have enough strength to stick around.  Another reason to avoid former leaders until they can put in better performances overall.

Otherwise, I don't look at this past week as significant at all.  It was simply one of those weeks that is constructive because nothing important happened.  The good news is that weeks like these help lay the groundwork for future moves so we'll see what happens.

As always this is not a buy list but rather a starting point for doing more research.  Stocks that are new are underlined and have an Asterisk (*) next to their company name.

Stock that fell off the Super Stock Screener results from July 5th are below:

Note: This screen is fairly wide (EPS>=45%, Sales>=25%, ROE>=10, RS>=90, Price within 20% of High) and I do have tighter screens as well.  To keep the screen results manageable I removed Industry Groups that I either do not believe in (Financial) or are so Commodity that I have no edge in how to pick one from another (Oil&Gas).