Stocks edged higher on weaker than expected economic data. Volume was reported slightly lighter and near the prior session's totals on the NYSE and on the Nasdaq exchange while the overall action suggested that large institutions were not aggressively buying stocks. Advancers led decliners by nearly a 3-to-2 ratio on the NYSE and on the Nasdaq exchange. There were 28 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the total of 20 issues that appeared on the prior session. New 52-week highs still solidly outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange and new lows fell to single digits.

Most of Thursday's important headlines occurred before the opening bell. The European Central Bank held rates steady and said they will wait for further economic recovery before withdrawing emergency stimulus measures. Domestically, two important economic reports were released at 8:30 AM EST: weekly jobless claims and last month's retail sales. The Labor Department said that first-time unemployment (aka. jobless) claims rose more than forecast to 444,000 last week. The 11,000 increase was offset by another decline in the four-week average, down 9,000 to 440,750. It is important to note that the four-week average has declined for 19 straight weeks which clearly indicates a sharp improvement in the labor market. Elsewhere, retail sales unexpectedly fell -0.3% in December after a +1.8% increase in November. December's reading fell short of the Street's estimate for a +0.4% increase which caught many analysts by surprise.

For the most part, the major averages and leading stocks are range bound as investors continue to digest the slew of earnings being released each day. Until a clear picture can be formed as to how companies fared last quarter then expect more of this sideways to slightly higher action to continue. It is important to note that the current 45-week rally remains intact as long as the major averages continue trading above their respective 50-day moving average (DMA) lines. Until those levels are breached, the bulls deserve the benefit of the doubt.

The Bank Index ($BKX +1.64%) and Broker/Dealer Index ($XBD +0.30%) tallied gains on Thursday and the Healthcare Index ($HMO +1.37%) posted a solid gain.  The Retail Index ($RLX -0.47%) and Semiconductor Index ($SOX -0.59%) created a drag on the market with their slight losses while the Biotechnology Index ($BTK -0.06%) and Internet Index ($IIX +0.04%) were little changed and the Networking Index ($NWX +0.62%) posted a modest gain. The Oil Services Index ($OSX +0.55%) edged higher while the Integrated Oil Index ($XOI +0.05%) finished flat and the Gold & Silver Index ($XAU -0.85%) laggard most other groups with a modest loss.

Charts courtesy www.stockcharts.com

PICTURED: The Bank Index ($BKX +1.64%) held its ground after rallying above its 50-day moving average line recently, and now is approaching resistance at its prior chart high from October 2009.

Baidu.com, Inc. (BIDU  +$24.75 or +5.63% to $464.23) rose to a fresh all-time high today as a considerable gain backed by nearly 4 times average volume lifted it above its "max buy" level. Its color code was changed to green as it quickly got extended from more than +5% above its pivot point from the latest "double bottom" base pattern. It triggered a technical buy signal and was featured in yellow on 1/13/10 as it cleared the 12/29/09 high mentioned in the prior evening's note (view all notes). The stock had recently encountered resistance at its 50-day moving average (DMA) line and recently undercut its prior chart low, another ominous sign. It was repeatedly stated in prior analysis that, "Gains back above its 50 DMA line are needed for its outlook to improve."  It was a sign of great institutional accumulation when it blasted higher.  Regardless of the latest headlines, the company has a stellar sales and earnings history that satisfies the C & A criteria.  It is reassuring that the number of top-rated funds owning BIDU's shares rose from 103 in Dec '08 to 177 in Sep '09, solid evidence its shares were being accumulated by the institutional (I criteria) crowd. 

Always stay disciplined and avoid chasing stocks that are too extended from an ideal buy point to stack the odds of success in your favor. In a bullish market environment, many ideal buy candidates come along.

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.