The major averages ended unanimously higher on Tuesday after the Federal Reserve held rates steady, as expected, and largely reiterate its comments from its last meeting about the state of the economy. Volume totals were below average but rose compared to the prior session on the NYSE and Nasdaq exchange, suggesting that institutional investors were timidly accumulating stocks. Advancers led decliners by more than a 2-to-1 ratio on the NYSE and more than 3-to-2 ratio on the Nasdaq exchange. There were 54 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 43 issues that appeared on the prior session. New 52-week highs again overwhelmingly trumped new lows on both exchanges.

The February housing starts were reported slightly better than expected, even though starts declined 5.9% from January.  Prices of goods imported into the U.S. in February fell more than forecast, signaling there is mild inflationary pressure coming from abroad.  Health care stocks overcame modest pressure after House Speaker Nancy Pelosi said there will be enough votes in the House to pass health care reform.  Meanwhile, European markets advanced as European leaders worked out a plan for emergency aid to Greece if needed.   Meanwhile, oil prices climbed +2.4% to $81.70 per barrel. Weekly oil inventory data is due Wednesday morning.

Looking at the market, since the March 1, follow-through-day (FTD) the market and a batch of leading stocks steadily rallied. The fact that we have not seen any serious distribution days since the 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.

PICTURED: The Nasdaq Composite Index rallied to yet another recovery high as volume increased from the prior session total yet remained below average.

Charts courtesy www.stockcharts.com

PICTURED: The Gold & Silver Index ($XAU +2.66%) posted a big gain, yet it needs gains above its January 2010 highs to break the worrisome series of lower highs and lower lows. The XAU held its ground at its 50-day moving average (DMA) line and well above its 200 DMA line during its current consolidation off its $172.73 March peak.

Intuitive Surgical Inc. (ISRG -$0.49 or -0.14% to $355.51) ended with a small loss today on light volume, quietly hovering near its all-time high. The stock has barely encountered any distributional pressure, and its current Up/Down Volume Ratio of 1.5 provides an unbiased bullish statistic concerning its recent price/volume pattern.  However, as the daily graph below shows, volume has been light during its tight consolidation after recently rallying to new all-time highs without greater than +50% above average volume.  When a weekly chart was shown in its last FSU section appearance on 2/24/10 under the headline "Down Weeks On Volume Have Been Rare In This Strong Example" it was then observed, "ISRG may be on course for its all-time high ($359 in 2007)." It made it there without triggering any technical buy signal, however. In the event of a pullback, its prior chart highs in the $346 area are an initial support level to watch, while its 50-day moving average ($333.77) line and its 2/25/10 low ($335.27) help define the next very important support level. Subsequent gains into new high territory would have more serious bullish implications if volume swells substantially. 

The number of top-rated funds owning its shares has risen from 283 in Mar '09 to 311 in Dec '09, which is reassuring concerning the investment system's I criteria.  ISRG was featured again most recently in the 1/22/10 mid-day report (read here), returning after some time off the Featured Stocks list. Its annual earnings history (the A criteria) has been very impressive. Quarterly comparisons have not shown perfectly steady increases above the +25% guideline, yet the latest period ended December 31, 2009 showed a very impressive acceleration in sales revenues and earnings growth. It is due to report its next quarterly results on April 15th after the close.

 Earlier notes had outlined technical deterioration before and when it was last dropped from the Featured Stocks list on 6/10/08. ISRG traded up more than 13-fold since first featured in yellow in CANSLIM.net reports in the summer of 2004.

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.