Friday was the 27th day of the current QQQQ short term up-trend. There were 10 new highs and 6 new lows in my universe of 4.000 stocks on Friday. Three of the ten new highs were on the IBD100 lists from today’s edition: STAR, HANS and JJNF. Since the first day of the QQQQ uptrend (by my definition) on 3/18, the QQQQ has climbed 13%, the Ultra long QQQQ ETF by 28%, and the SPY by 8%. During this same period, 84% of the stocks in the Nasdaq 100 Index (measured by the ETF, QQQQ) have advanced, with one third advancing 20% or more. The key to successful trading on the long side is to have the relevant index in an up-trend.
I just completed the best 2 week period in a year. I own a lot of the stocks listed to the right, which are having terrific runs. The GMI registered 5 for the first time since August, 2008, before the start of the major market decline. My Successful 10 day New High Index turned positive. There were finally enough stocks that hit a new high 10 days ago that have closed higher than they did 10 days ago.
Stocks on the 52 week new high lists that are also at or near all time highs is where I find potential rockets. Nicolas Darvas made a fortune trading such stocks. IBD100 stocks near all time highs include: GMCR, NFLX, MNRO, QSII, VLGEA, AZO, SNDA, NTES, ALGT. TNDM. TSYS, HGG and ORLY are also very strong, but are not yet on my IBD100 lists.
While most of the world looks for bargain stocks at new lows, I seek rockets heading to the moon. The greatest winning stocks are those heading up to ever higher levels. Think of how many times that YHOO or CSCO or MSFT hit all time new highs as they multiplied their prices many times during their great bull runs. If you want to hop a rocket to the moon, it better be pointing up and gaining altitude.