Watch List Getting Stronger; No Real Casualties Either

The watch list I posted yesterday is holding strong with many of them quickly moving higher as if to challenge their recent highs. This is exactly what you want to see. Ideally, these stocks will rise on stronger volume, indicating the big players are snapping up shares.
Some stocks on the list are too extended. SXCI is one such stock.

Others are offering buying opportunities after having broken out. I like IBD’s method of allowing 5% room after a breakout to buy the stock – but try to buy as close to the buy point as possible. One stock that offered a chance to pick it up at a discount from its recent break out is VIT. It’s Chinese, so it has the tendency to zip one direction or the other in short order. It sits about 2.5% above its buy point after today’s pullback. However, it pulled back in heightened volume, which isn’t a positive occurrence, but then again, being a volatile Chinese stock, it could just as easily reverse and pounce higher. I’ve seen it happen many times before with Chinese stocks. Nonetheless, it’s a negative, and it only reinforces my caution since it broke out from a “V” shape base.

“V” shaped bases are less desirable because they potentially didn’t spend enough time at the consolidation’s bottom shaking weaker holders of the stock out. Consequently, when it breaks out at a higher level, it will have more of a tendency to peter out as these weak holders sell to get quick profits.

I continue to search for stocks to ad to my watch list. You never know when a stock you really like fails suddenly, leaving you in a position to recommit your capital to another top prospect.

Currently, I’m in GMCR and PCLN. Perhaps ATHR tomorrow? I liked today’s behavior, and I like the movement of the industry as a whole.