Like A Popcorn Machine

Last post addressed looking for confirmation that the current rally is sustainable and worth jumping into. Last week’s action was unclear, until Friday when we saw definitive upward movement and more quality stocks breaking out. Today, while the market was quiet, we saw more top quality stocks break out – it’s like a popcorn machine, seeing these stocks pop on their daily charts.


This kind of action should enhearten you. When many stocks form consolidations then break out above resistance levels on significant volume, it’s indicative that big money is moving into stocks. You will notice in a good uptrend that stocks of all caliber break out and move higher. Stocks don’t all have to be top rated with over 25% EPS and sales growth to break out – when you see stocks with even just good fundamentals and slightly above average numbers breaking out, like 26% EPS growth and 15% sales growth in the most recent quarter, it’s a great sign.

The best stocks, those stocks that climb the highest the fastest, will generally sport the best numbers. So while above average stocks begin breaking out all over the place, I focus in on the truly exceptional. The more growth the stock has, the better. The more unique and new the stock’s product, the better. And if it’s a young stock with these qualities, all the better still.

A list of notable breakouts will be posted shortly.