Trader Mike

You know I like to play IPOs just as they make new highs after building a base. Here are two that are making new all-time highs: Multi-Fineline Electronix Inc (MFLX) and Syneron Medical Ltd (ELOS).

Duru profiled MFLX while he was guest blogging for me last month and called it cheap based on the fundamentals. Fundamentals?!?!? The stock is too thinly traded for my liking so I never gave it any consideration. It jumped last night after reporting earnings. Hmm, maybe there’s something to those fundamentals after all.

ELOS never made a long enough base — it just keeps cruising higher. It looks …

Duru and I were trippin’ off of Google being around $150 (without us!). We both talked about buying it a few weeks ago but both passed. He wanted to try it just after it tested the $100 level. I considered buying it as it took out its all-time high at $113.50. I’ve mentioned here several times that I like to wait for an IPO to make a base and then buy it once it makes a new high. (I made a killing doing that over & over back in the day.) That’s exactly what GOOG did, but I passed on it because I thought the base was too short. Silly me!

On …

I’m always interested in stocks that are making new highs, and not just 52-week highs, but all-time highs. That’s got to be one of the strongest signals that good things are happening at that company. Here are a few that caught my eye the other day. These are at or very near all-time highs:

FedEx (FDX) - who would have thunk it?

AMX

WBSN

ADSK

FMD

Add Google to the list too, although it’s still a very young stock.

The market had a nice price move upwards yesterday but the volume was still on the light side. The S&P 600 made a new all-time closing high, while the S&P 500 and Dow are very close to making new 52-week highs. The NASDAQ has actually poked its head back above its 50-day moving average by a few points, but the QQQ closed exactly at its 50 day. I think this juncture is critical for the NASDAQ, it needs to make a high above the mid February high to save it from being locked in a downward sloping trend channel.

Larry Conners has written a follow-up to his article from last week on breakouts vs. pullbacks — Do You Buy Breakouts? Think Again (Part 2). The results are very interesting.

(Again, I’ve archived the article here)

TradingMarkets.com has posted an interesting study comparing the results of buying breakouts to buying pullbacks. The results are rather surprising to me. According to the methodology used in the study you would make more money shorting breakouts to new highs than buying them. Although I’m not a big proponent of buying breakouts I can’t help but think this study is flawed. The first thing that comes to mind is the money management aspect. Most breakout traders are pretty aggressive. The good ones would likely not just leave a trailing stop below the 10 day moving average like was done in the study. They would be locking in their gains and not letting significant profits turn into losses. It’s the exits that make/lose money, not the entries. I’d like to see a similar study done with different exit strategies.

Here’s the complete article:

December started off with a bang today with the major indices closing at new 52-week highs. The NASDAQ is still below its intraday high of 1992 from November 7th, but the S&P 500 has made a clear breakout above it’s old (intraday and closing) highs. There was talk of a rotation into big caps today and judging by the S&P’s performance that very well may have been the case.

I can’t help but be amused at the commentary I see/hear in the media. Two weeks ago, when we were oversold, sitting near the 50-day moving averages and lower Bollinger Bands, the angst was so thick you could cut it with …

The market continues to hold on to its gains of the last week very well. It certainly feels like there’s a ton of support just underneath current levels. The S&P 500 seems to be drawn to the 1,000 level like it’s a magnet. The Dow is acting similarly with 9,400. We’re still short-term overbought territory though, so I can’t get too excited about the upside from here unless we cool off a bit.

On a different note — I was just looking at the S&P 600 and the Value Line Index, and was very surprised to see that they both are near all-time highs. Both of these …

It looks like Blockbuster is threatening to go after NetFlix again. I’ve been hearing this threat for a couple of years now. It will be very difficult for them to duplicate NetFlix’s rental scheme while keeping their traditional stores, and customers, happy. I think it’s just a matter of time before Blockbuster goes the way of the Dodo bird. NetFlix’s stock has outperformed Blockbuster’s by 80% over the last year! (Note that NFLX has been making new all-time highs recently — my kind of stock!) Seems like the writing is on the wall about the direction of these companies. I haven’t stepped foot into a video store since …