With AAPL now closing above its 30 day average (red line), the short term trend is up again. A close back below the average (currently 199.02) would cancel this up-trend signal. The longer term trend remains up.
I used TC2007 to scan the market for stocks that meet my most stringent fundamental and technical criteria for rockets. These stocks have great fundamentals and technicals, have already doubled their price a year ago and are near 5 year or all-time highs. I have listed in this table the 11 stocks out of 4,000 in my stock universe that met these criteria. All of these stocks had last quarterly earnings up at least 100%. Coincidentally, all but 4 of the 11 are in my records as having appeared on the IBD100 and/or IBD New America lists during the past year. I have also noted in this table where I might place long term or short term stop losses on each long position. The most conservative stop loss is the short term support level. With a growth stock I rarely retain a long position if the stock closes below its short term support level. However, if I bought near long term support I might use the LT support level as my exit strategy. I will return to these 11 stocks in a future post to show you how they behaved. These stocks have already proven themselves as being in strong up-trends, but one never knows when an up-trend will end. That is why I immediately enter a sell stop or buy a put option for insurance, after buying one of these high momentum stocks. I currently own 3 of these stocks.
Below is a Guppy Multiple Moving Averages (GMMA) weekly chart (click on chart to enlarge) of one of these rocket stocks, RDY. Note how all of the shorter term averages (black lines) are well above the rising long term averages (red lines). This is the type of technical strength I seek in a potential rocket stock.
Meanwhile, the GMI and GMI-R remain at their maximum levels.
I am still concerned that AAPL (and NFLX) is showing technical weakness. On Friday, the stock could not hold its 30 day average and its 10 day average (blue dotted line) remains below its 30 day average. See the daily chart for AAPL below. While AAPL could always break above its 30 day this week, until it does, it may be flashing a short term down-trend. Another stock that I am short is EMS, which may also be flashing a sell signal. EMS may have formed a head and shoulders top. Nevertheless, the GMI and GMI-R are at their maximum values. So the QQQQ (Nasdaq 100 ETF) is still in short and longer term up-trends. The Worden T2108 Indicator is at 65%, in neutral territory. The daily stochastics for the QQQQ are flat and in neutral territory. So I continue to ride QLD but remain cautious, with the weakness in AAPL and NFLX.
Since I posted a few days ago a Guppy chart showing short term weakness in AAPL, the stock declined and then bounced on Wednesday. The stock did reach a very low level on its daily stochastics (10,4,4) indicator and a reversal of the short term down-trend is still possible. However, I am waiting for a close back above its critical 30 day average to go long on the stock. The daily chart below shows that the 30 day average (in red) is curving down and for the first time since the rise began last March the 10 day average (dotted line) is below its 30 day average. Both of these short term indicators are bearish. A close above 198.11 today would turn me bullish on the stock. A bounce down off of the 30 day average and a close below 198.11 would make me very cautious on the stock. If the stock starts down today, it could have formed a short term double top, having met strong resistance around 208. If/when it closes above 208-209, the up-trend will have likely resumed. Remember though, AAPL remains in a longer term Stage 2 weekly up-trend.
While still in a longer term up-trend, AAPL has closed below its critical 10 week average for the first time since its rise began last March. (Daily volume has also tended to spike on the down days.) Since March, AAPL has more than doubled. The longer term trend remains intact, but this daily Guppy chart shows that the short term averages (in black) are now heading down and penetrating the longer term averages (red). I closed out the puts I sold on AAPL and am now waiting on the sidelines to see if the down-trend deepens or reverses. Note that every long term decline must first begin with a short term decline.