Seeking Alpha

GSRTrades'  Instablog

GSRTrades
Send Message
Our research draws its market bias from a combo of Fundamental and Technical evidence. Economic and earning trends are matched against our analysis of price and volume charts, giving us an indication of how friendly or unfriendly the market is behaving. The goal is to identify top growth stocks... More
My company:
GSRTrades
  • Consumer Staples Show Some Shine 0 comments
    May 11, 2010 6:26 PM | about stocks: HAS, MFB, AFFX, AKAM, HSH, CPB, PEP, MO, MCD, WFC



    Major indexes testing their 50-day moving averages to the upside was somewhat expected.

    The Dow and S&P 500 reversed and closed slightly in the red after touching these key averages.

    The Nasdaq, which came just shy of its 50-day average, was hardly changed on the day.

    Volume was average across the indexes as traders continued to evaluate what last week's correction means to their strategies.

    We're likely to stay Bears until the 50-day averages are conquered. Uncertainty of strength in the broader market has us mostly on the sidelines.

    Beginning Thursday, we're looking for at least one of the major indexes to power at least 2% higher, or so, on heavy volume to give us an indication of Follow Through.

    Any rally without this confirmation of institutional sponsorship will be suspect. The reason we wait a few days from Thursday's low is to give shorts time to cover so as not to confuse it with real buying.

    Breakouts may not be completely out of fashion as top-earnings-growers Hasbro (NASDAQ:HAS) and Maidenform Brands (NYSE:MFB) launched from 52-week bases to  which give us a shade of confidence that others on our list will follow.

    Going into Wednesday's trading, Affymax's (OTCQB:AFFY) volume boost suggests it could be next. Akamai (NASDAQ:AKAM) is also close.

    It should be noted that these breakouts are "high-risk" without a confirmation in trend from the broader market. Though bad markets do in fact have their successful breakouts, the odds of them producing at least 20% price advances in the following months will decrease when the broader trend is down.

    Larger, slower stocks in, or near, New High territory include Consumer Staple names like Sara Lee (SLE), Campbell Soup (NYSE:CPB), Pepsico (NYSE:PEP) and Altria Group (NYSE:MO).

    Consumer Staple's ability to climb in the next couple weeks will be watched closely for an indication of how well it could pull everything else higher. Further confidence may come from S&P 100 names, like McDonalds (NYSE:MCD) and Wells Fargo (NYSE:WFC), which don't appear to have topped.

    Strength from these widely considered "safer" investments shows some defensive playing from large funds. It also indicates less willingness from funds to bid aggressive names higher. 

    We expect to have a better understanding of the nature of this market by the end of the week. Stay tuned. Dan www.thegrowthstockreport.com

    Disclosure: Short CMC
    Themes: Consumer Staples Stocks: HAS, MFB, AFFX, AKAM, HSH, CPB, PEP, MO, MCD, WFC
Back To GSRTrades' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

  • Base breakout on growth stock $ULTA in effect
    Jun 18, 2010
  • Major buy volume on Growth Stock $ULTA, up 10%, nearing base breakout
    Jun 11, 2010
  • Growth Stock base breakout on $DECK
    Jun 11, 2010
More »

Latest Comments


Most Commented
  1. Cautious Buyers (6 Comments)
  2. Runaway Train (4 Comments)
  3. A Follow Through Day (2 Comments)
  4. Bearish Callings (2 Comments)
  5. Pullback Mode (1 Comment)
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.