The Gap-Up Invites Selling

 | Oct 11, 2012 | 10:40 AM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:








We gapped up too much to start that day, and that invited selling rather than chasing so far. If we continue to hold the gains, some buyers will likely step up, but right now we have mostly fades, with Apple (AAPL) being a particularly good example. There are a few runners like Google (GOOG), but buyers are understandably a bit slow in embracing a bounce after two days of poor action.

Breadth is quite good at nearly 4 to 1 positive, and all major sectors are up, with biotech, gold, steel, coal and oil leading. We are slowly walking back up the opening highs, and that should trigger some stops if it is taken out.

I've moved mostly to cash recently and don't have much inventory, so I'm digging down, looking for some opportunities. I'm not looking for any long-term holds at this point and will keep very tight stops on anything I buy.

One position I added this morning is Cooper Industries (CBM). This is a pharmaceutical supplier, and it has excellent EPS numbers. The company is expected to earn $0.83 a share this year, which is an increase of 83% over the prior year. Last quarter it posted a big upside surprise, but it has very bumpy earnings. It has a 97 EPS rank and a 98 relative-strength rank from IBD

Another one I'm watching closely here is Sarepta Therapeutics (SRPT). That has been a big winner, but it has been pulling back after posting very impressive data. The shorts have been attacking it, but it is scheduled to present additional data this weekend, and I'm looking for a bounce as it approaches support around $30. This should move fast when it turns, but right now the bears have the upper hand.

Columnist Conversations

Now that AAPL has violated the shorter term support, these are the two areas I have to consider for new buy en...
The symmetry is holding up in MCD.  Target 1 is 163.34 if we continue to hold above here!  ...
As far as TSLA is concerned, I still have a higher target above the market at the 409 area.  I stated in ...
The TLT setup discussed in my last commentary is a bust. Key support was violated and it violated the recent l...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.