Whenever a daily stock chart shows a stock or ETF going vertical, I usually get off. Both the SPY, QQQ and DIA have vertical patterns. I have therefore become very defensive. Take a look at this chart of QQQ.
I am also concerned that NVDA, a leader, could not go to a new high on good earnings. There are signs of high volume institutional selling in NVDA. It shows up clearly in a weekly chart. Look at the huge red volume spikes of selling at the two peaks. Failure to retake these peaks would set up a major decline in the stock–and probably the market….
I created a scan in TC2000 that looks for strong stocks hitting a 100 day high that did not hit a 100 day high the prior day (I want a stock to be just breaking out), that is up significantly from a year ago and that traded an above average number of shares that day. This scan identified 19 stocks, of which PJC is one.
I like the the technicals and fundamentals of PJC. It also has a Composite Rating in IBD=95. You can access this scan in my TC2000 Club at www.wishingwealthblog.com/club. The scan is also described in my blog’s glossary above. I use the results of my scans as a starting point to identify strong stocks that I must then research for other technical and fundamental attributes. I like to run this scan during the last hour of the trading day (I do not want a stock that breaks out early only to reverse by the end of the day) to find stocks breaking out on above average volume. If I find one I like, I might buy an initial position and place a sell stop below the day’s low. Here are some charts on PJC. This weekly chart indicates a GLB (Green Line Break-out to an all-time high, see Glossary for definition).
The daily chart shows the increased volume on Friday. This might be also be considered a cup with handle break-out.
The weekly chart shows an established RWB rocket pattern and a break-out from a base.
The GMI remains at 6 (of 6).
Too many stocks climb into earnings release and then collapse. Some climb after release but who can predict the winners in advance? IRBT s a good example. While I can see a few technical reasons in the chart that provided to me some warning signals to get exit my position (like the bounce off of the upper Bollinger Band), the best advance signal was the next earnings date (now 4/25/2017), which always appears at the top of my charts–thank you TC2000! One way to protect one’s position into earnings other than by selling out is to purchase short term put options (as insurance) on the stock.