Weekend Update: Sideways and Choppy

Well, another week of sideways trading. However we did manage to hold above the prior range resistance at 1515 and were able to make another new high. Although we held above our key support level, we failed to take advantage of the situation and look to have created another trading range (1525-1515).

At this point we are basically in the same spot we were last week. We need to see a resolution of this trading range before we make many adjustments to our current holdings. This week I did raise some cash on Wednesday in a couple stocks that had run up nicely and have earnings reports just ahead. I made no significant moves to speak of, I simply trimmed up and rotated into a couple new positions. Until this market breaks out of its ranges I will likely sit with a similar posture; I am positioned about 65/35, stocks to cash.

There are a few notable updates to our watch list after this weeks trading:

DDD

So this one is thrashing around a bit but has begun to form a triangle pattern. Typically a triangle pattern tends to resolve in the direction of the current trend (which is up). This is a position I added on Friday. Its been a bit wild, but buying here just above the triangle trend support and rising 50 DMA seems like a nice low risk entry for an opening position. If this trend breaks below the support line and 50 DMA, I will close my position.

PBW

Our Clean Energy fund continues to break away from the resistance/neckline area at 4.50. Buying interest is VERY strong here as we can see from the huge volume spikes. I have added to this position and will look to add more on a retest of the 4.50 area.

HAIN

I am very pleased with the way our organic foods company has been recovering from its long decline. I will be looking to add to my current position with a pullback to the $57 support area. If you are trading HAIN here, I think the 50 DMA is a good place to put your stop. The Relative Strength for HAIN vs the SP500 has begun to change trend also. As you can see from the chart, the blue line has been declining for several months (under performing vs the SP500) and has now broken above the down trend resistance. A good confirmation of the strength we've seen in price.

MOS

MOS has formed a very tight flag pattern just under major breakout resistance. Price has begun to move higher from the flag and is now retesting the resistance level again. Very strong stock, this is my 2nd largest holding. Above $60 I think this is a monster!

HD

Currently my largest holding, HD continues to be very strong. When you have a winner like this you just keep riding it.

That's about it for notable developments from our watch list this past week. The remaining positions are simply churning sideways with the overall market. Because we only like to be investing in the best performing stocks, the remaining stocks from our list F, CMI, AAPL, WFC, and ENB need to be considered underweight holdings for the immediate future. With the exception of AAPL, none of these stocks look particularly weak, they have simply run up nicely and are enjoying a well needed breather.

What we need to be watching for this coming week is to see if the market can hold above its support line of 1515 and continue to build on its previous strength. If you have some nice gains from this rally, tighten up your stops and watch out for closes under or above the new 1515-1525 trading range.

I will do my best to get a couple updates during the week up, but forgive me if I can't, my parents are in Hawaii until the end of February and business at the shop has been hopping (the economy seems to be improving, at least people have sure been eager to buy a lot of glasses!).