Look for Resting Stocks

 | Mar 19, 2012 | 6:33 AM EDT  | Comments
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Stock quotes in this article:

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mcd

Amid of host of unbelievably good charts -- including almost every single bank, homebuilder, real estate investment trust and retail play -- comes a group that can only be described as the senior growth cohort, the stocks with both terrific earnings power and higher growth than the average stock that seems to have real staying power.

We are all blinded by the staying power of Apple (AAPL) (and now Apple's cash!), but have you looked at Nike (NKE) lately? I know it is reporting this week. We should only hope it sells off! That's what we got on Ross Stores (ROST) on Friday, but I bet that's just a temporary stop as we saw with Bed Bath (BBBY) and Costco (COST) recently. Meanwhile, the breathtaking moves in Chipotle (CMG), Alexion Pharma (ALXN) and Monster (MWW) seem to know no stopping, as is the case with Intuitive Surgical (ISRG), Priceline (PCLN) and F5 (FFIV). (All of the internet video plays seem to have come alive again including Akamai (AKAM) and Level 3 (LVLT) of all things.)

You can't think about growth without looking at the amazing performances of Starbucks (SBUX) and Whole Foods (WFM), both of which continue to be upgraded because of creeping number bumps.

What's propelling a lot of these moves? Frankly, it is part of a virtuous circle I have only seen a couple of times in 32 years of investing: the overrunning of price targets.

Each morning I gather the research and I am amazed right now about how stocks are relentlessly overriding price targets and forcing analysts to come on every morning and take targets higher. We hear about it en masse when it comes to Apple, but all of the other stocks I just mentioned have been similarly bumped on a repeated basis.

Purists probably hate this stuff. But they shouldn't because it has to do with a negative mindset of the analysts to begin with. They have made their price targets in a more bearish 2011 atmosphere instead of 2012, where everything save the price of gasoline seems to be on target.

Watch these bumps. They are really working on all of these stocks.

How can you get ahead of them? I like to pick on the resting stocks. Costco and Bed Bath rested after they reported. Right now McDonald's (MCD) is resting.

To me that's just a matter of time, perhaps the next monthly number, before the price bumps begin anew.

Just spectacular action. On a daily basis.

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