Stocks rose after the Labor Department reported a stronger than expected jobs report. Volume, a critical gauge of institutional demand, was reported higher than the prior session on the Nasdaq exchange and on the NYSE, offering a reassuring sign that institutional investors had a heartier appetite for buying stocks again.  Advancers trumped decliners by over a 5-to-1 ratio on the NYSE and by nearly a 4-to-1 ratio on the Nasdaq exchange. There were 59 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 from the 31 issues that appeared on the prior session. New 52-week highs again overwhelmingly trumped new lows on both exchanges while new lows were in the single digits.

On Monday, the Nasdaq composite confirmed the latest rally attempt when it jumped +1.6% and produced a cautious follow-through day. On Tuesday, stocks edged higher after India said its economy rose last quarter, topping the Street's estimates. On Wednesday, stocks closed little changed after the latest economic data showed improvement in the US job market and service industries. The ADP said employers only cut -20,000 jobs last month which was above the Street's estimate. Elsewhere, the Institute for Supply Management (ISM) said its service index enjoyed the fastest growth rate since October 2007 which bodes well for the economic recovery. So far, over +470 companies in the benchmark index have reported quarterly earnings and approximately +75% have topped analysts' estimates. Barring some unforeseen event, the S&P 500 Index is on track to snap a record 9-quarter earnings slump.

Two important economic reports were released on Thursday: factory orders and pending home sales. Factory orders matched estimates and rose a very solid +1.7% in January. Orders for non-durable goods grew by +0.9% and durable goods orders, already released, were revised lower but still grew by +2.6%. Meanwhile, the National Association of Realtors said pending home sales, plunged by -7.6% to 90.4. The NAR blamed poor weather as the primary culprit for the poor reading. Stocks soared on Friday after the Labor Department said US employers cut 36,000 jobs last month which topped the Street's estimate. The closely watched unemployment rate held steady at 9.7% which was another healthy sign.

Looking at the market, since Monday's follow-through day (FTD), the market and a batch of leading stocks, steadily rallied which is a healthy sign. The fact that we have not seen any serious distribution days show up since Monday's FTD bodes well for this nascent rally. It is also a welcome sign to see the market continue to improve as investors digest the latest round of stronger than expected economic and earnings data. Remember that now that a new rally has been confirmed, the window is open to start buying high quality breakouts. Trade accordingly.

Charts courtesy www.stockcharts.com

PICTURED 1: The Bank Index ($BKX +2.49%) was among the important influences underpinning the confirmed market rally this this week, rallying strong for a new 2010 high close while approaching its recovery high.   

PICTURED 2: The Broker/Dealer Index ($XBD +1.99%) rallied above its 50-day moving average (DMA) line, having recently made a stand at its longer term 200 DMA line.

Salesforce.com, Inc. (CRM +$1.39 or +1.96% to $72.28) is continuing its recent rebound above its 50-day moving average (DMA) line and it is perched -4% from its all-time high. It encountered distributional pressure in recent weeks after reaching its 2008 highs. Its color code is changed to yellow with new pivot point cited based on its January 4, 2010 high. Its weekly chart below resembles a giant cup with handle pattern. Ideally it would form the right side of a shorter-term cup-with handle pattern in the weeks ahead before triggering a new buy signal. Patience and discipline are required, and only with a powerful breakout to new highs on heavy volume would new (or add-on) buying efforts be considered appropriate under the investment system guidelines. Meanwhile, the recent chart low ($64.77 on 2/25/10) is now an important support level to watch.

The high-ranked Computer Software - Enterprise firm has seen an increase in institutional (I criteria) ownership, with the number of top-rated funds owning its shares rising from 276 in March '09 to 322 in Dec '09. It has traded up as much as +60.3% since featured in a Stock Bulletin on 8/16/09 under the headline "Forces Have Been Favorable For Software Services Firm."

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.