Stocks enjoyed healthy gains on Thursday as European woes eased and strong earnings from Motorola Inc. (MOT +3.47%) to Starwood Hotels & Resorts Worldwide Inc. (HOT +5.67%) showed the economy is improving. Motorola, the largest US mobile-phone manufacturer, gapped up after reporting an unexpected profit, and Starwood vaulted to a fresh 52-week high after releasing their latest results. Elsewhere, shares of Palm Inc. (PALM +26.13%) surged over +26% after Hewlett-Packard Co. (HPQ -0.75%) acquired the company for around $1.2 billion.

PICTURED: The benchmark S&P 500 Index has followed its latest distribution day with 2 consecutive gains on above average volume.

The Healthcare Index ($HMO +2.70%), Biotechnology Index ($BTK +2.91%), Networking Index ($NWX +2.95%), Internet Index ($IIX +2.21%) each posted better than +2% gains on Thursday.  The Bank Index ($BKX +2.43%) also rallied as much, and the Broker/Dealer Index ($XBD +1.84%) came close to that threshold.  Strength from financial industry stocks, the Retail Index ($RLX +1.63%), and the Semiconductor Index ($SOX +1.37%) showed that there was widespread strength in the market.  Along with solid gains from a number of influential groups, the Gold & Silver Index ($XAU +1.13%) rose further above the April high as illustrated in yesterday's IGW section (read here).

Energy-related shares were clearly among Thursday's laggards as the Oil Services Index ($OSX -0.95%) slid.  

Charts courtesy www.stockcharts.com

PICTURED: The Integrated Oil Index ($XOI -0.18%) has been encountering resistance near October 2009 highs while recently trying to rise from a big "double bottom" type pattern.

Aruba Networks Inc. (ARUN +$0.19 or +1.45% to $13.27) is consolidating quietly on below average volume, and volume totals have been generally cooling since its volume-driven gains in February and March. It has been finding support near its 50-day moving average (DMA) line. Subsequent deterioration below that important short-term average would raise concerns, while its recent chart low ($12.21 on 3/19/10) helps define the next nearest chart support above its old pivot point. 

A new pivot point based on its 4/01/10 high plus ten cents has been noted considering its current 5-week flat base being formed. That may be the first "sound" base pattern formed since ARUN was first featured in yellow on 2/19/10 in the mid-day report with a note that it - "Gapped up today for a considerable gain and new 52 week high, rising from a flat base-on-base pattern" (read here). A convincing gain above its new pivot point with heavy volume would produce a new technical buy signal that may prompt new or add-on buying efforts. 

Its current quarterly earnings (C criteria) increases have been above the +25% minimum guideline and earnings in recent years followed prior annual losses. The quarter ended Dec 31, 2009 also showed a more impressive +30% sales revenues increase, an encouraging acceleration. Earnings news is not pending in the near-term because its next report will be for the quarter ending on April 30, 2010, unlike the majority of companies which are now reporting. 

The number of top-rated funds owning an interest in its shares rose from 45 in Mar '09 to 81 in March '10 providing a nice reassurance with respect to the investment system's I criteria. Return On Equity reported at 6% is below the 17% guideline, leaving some concerns. However, management's 26% ownership interest keeps the directors' focus on maintaining and growing shareholder value. 

Color Codes Explained :
Y - Better candidates highlighted by our staff of experts.
G - Previously featured in past reports as yellow but may no longer be buyable under the guidelines.