Stocks and the dollar rose after the latest round of M&A news was announced. Monday marked Day 16 of the current rally attempt but the market failed to produce a proper follow-through day because the major averages' gains fell short of the +1.7% guideline. Volume, a critical gauge of institutional demand, was reported mixed compared to Friday's levels; higher on the Nasdaq exchange and lower on the NYSE. Advancers led decliners by a nearly a 4-to-1 ratio on the NYSE and by nearly a 3-to-1 ratio on the Nasdaq exchange. New 52-week highs trumped new lows on both exchanges which was another welcome sign while there were 69 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, up substantially from the 10 issues that appeared on the prior session.

Stocks rallied after the the latest round of economic data was released. US personal spending grew +0.5% in January for a fourth consecutive increase, while personal income grew by +0.4%. A separate report, released by the ISM, showed that US manufacturing was above the boom/bust level of 50. The ISM manufacturing index eased to 56.5 in February which was higher than January's reading but slightly below consensus. In other news, Chilean stocks plummeted after the earthquake killed close to 1,000 people, severed the country’s main highway, and damaged 1.5 million homes.

The tech sector produced solid gains on Monday as the Semiconductor Index ($SOX +3.13%), Networking Index ($NWX +1.76%) and the Internet Index ($IIX +1.93%) clicked their way higher. The Retail Index ($RLX +1.60%) traded with a positive bias.  Commodity-linked and generally defensive groups also were on the rise as the Integrated Oil Index ($XOI +1.00%), Oil Services Index ($OSX +1.13%), Gold & Silver Index ($XAU +1.69%), and the Healthcare Index ($HMO +1.52%) rounded out a widely positive session. Financial shares put up mixed results as the Broker/Dealer Index ($XBD +0.56%) posted a small gain, but the Bank Index ($BKX -0.44%) lagged and ended the session lower.

Charts courtesy www.stockcharts.com

PICTURED: The Biotechnology Index ($BTK +5.70%) produced a standout gain, rising to a new recovery high Monday on M&A news as OSI Pharmaceuticals Inc. (OSIP +51.94%) became the target of a hostile takeover bid launched by Astellas Pharma Inc. in a move aimed at further expanding into the U.S. oncology market.

Bio-Reference Laboratories, Inc. (BRLI +$1.62 or +4.09% to $41.23) posted a gain above its pivot point today with +38% above average volume, below the +50% above average volume guideline that defines the minimum volume threshold for a proper technical buy signal! Rising from its recent consolidation for 8-weeks above support at its 50 DMA line, its Up/Down Volume Ratio of 2.3 is an unbiased bullish indicator. This high-ranked Medical-Dental - Services firm was featured on 2/12/10 in yellow in the mid-day report and held its ground since an annotated graph showed it setting up under the headline "High-Ranked Medical Firm Basing Above 50-Day Average Line" in the Featured Stock Update section later that same evening.

No resistance remains due to overhead supply now, which could allow for a significant sprint higher. Earnings growth and sales revenues growth has accelerated, with increases better than the +25% minimum guideline in recent quarters. Fundamentals are favorable with respect to the C and A criteria. The high-ranked Medical/Dental Services firm has only 13.9 million shares outstanding (S criteria) and has average daily volume under 100,000 shares, which could contribute to greater price volatility in the event of more decisive institutional buying or selling. The number of top-rated funds owning its shares rose from 77 in Mar '09 to 88 in Dec '09 which is somewhat reassuring in regard to the I criteria of the investment system. Subsequent gains above its pivot point with at least +50% above average volume could trigger a more compelling technical buy signal, however, the M criteria also remains an overriding concern until a follow-through-day occurs from at least one of the major averages.

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.