This weekend was an interesting trip through the IBD 50. Most of the stocks that had previously been on my Watch Lists did an ugly job of breaking out this past week. Most of them are either slightly above or slightly below their buy points.
My strategy for the coming week is going to be to largely ignore those stocks that broke out poorly last week and focus on the stocks that are still in base building mode. Of course I will continue to monitor the big picture column every day just so I don’t miss any positive action in these stocks.
Focusing on stocks that are continuing to develop their bases, the IBD 50 points out that CSTR is in a cup base with a Buy Point of 69.84. Also, ULTA is still in a base with a buy point of 96.75. Not sure I would commit to ULTA if it were to break out because it is a late stage base. I am very interested in CSTR though. I think their new Starbucks vending machines could really add to EPS growth in the coming year or so. We will see what the chart has to say.
In addition to those two stocks, I also like the way GNC, AAPL, KORS, and CMG are going about their base building. Obviously AAPL and CMG have been leaders for quite some time but GNC and KORS could be the new leaders the market is looking for. If we still have a ways to go before a strong uptrend kicks in, any of these could be the leaders of the next uptrend.
Although they aren’t building the best looking bases right now, I am also interested in EBAY and TFM. I really like the growth potential EBAY has in using Paypal via smartphones at regular brick and mortar stores. Also, I think TFM could be the newer, hipper Whole Foods with more growth potential. Again, we will see what the charts say over the next few months.