IL regains its footing; SOHU breaks out; PPO near break out

As the markets edge higher, stocks have shown some more life again. However, this is not the go-go market of years past. We have discussed this in our IBD Meetup Group, and most of us agree it is a challenging market to find solid winners in.

Sticking with the CANSLIM approach and favoring companies with top notch earnings and a new product with secular growth is the best way to find good winners even in this more challenging environment. Not every good company's stock is moving higher. Just when you think you've got one, it seems, a pullback snuffs the gains right away.

Stocks to consider: IL, SOHU, PPO

IL broke out, and immediately retreated, but it didn't go down 8%, which I often use as my stop loss. I view it as a quintessential CANSLIM, Bill O'Neil style stock. It's young, has a new product in a very new space, and sports top notch earnings. It lacks a little in ROE (12%) which is about the only flaw I find in it. Today it popped back up above its buy point after spending four days below it.

SOHU hesitated on its initial break out of a cup, then formed a three week's tight pattern which it recently broke out of. It is still in buy range.

PPO is setting up in a tight cup with handle. It's a little harder to get as excited about this one as its recent sales and EPS growth is on the weak side, but it looks to rebound in the next quarter. It's in a hot group and certainly looks like it wants to go higher. As always, wait for a break out on volume to consider getting in.