Stocks rose, sending the Dow Jones Industrial Average and the benchmark S&P 500 Index to fresh 18 month highs and boosting the Nasdaq Composite Index to a fresh 19 month high after the latest round of healthy economic data was released. Volume totals were reported higher on the Nasdaq exchange and on the NYSE compared to the prior session. Advancers led decliners by more than a 2-to-1 ratio on the NYSE and by a 3-to-2 ratio on the Nasdaq exchange. There were 77 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 54 issues that appeared on the prior session. New 52-week highs again overwhelmingly trumped new lows on both exchanges. The number of new highs on the NYSE jumped to the highest level since 2005, which is a very healthy sign of robust leadership underpinning the major averages' advance.

Producer prices slid by a larger than expected -0.6% which eased inflation woes and eased pressure on the Federal Reserve to raise rates in the foreseeable future. Overseas, the Bank of Japan doubled its lending program aimed at increasing its credit growth to $222 billion. In Europe, investor confidence rose after the latest round of stronger than expected earnings were released.

It was encouraging to see a new batch of high-ranked leaders break out of sound bases in recent weeks which reiterates the underlying health of the current 3-week rally. Remember that the most ideal window remains open to begin buying stocks for the first 13-weeks after a sound follow-through day (FTD). Since the latest FTD occurred on March 1, the ideal buying window remains open until the the middle of the summer, assuming this rally does not fail.

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.

Charts courtesy www.stockcharts.com

PICTURED: The Healthcare Index ($HMO +0.50%) is rallying above its 50-day moving average line again, yet it ended the session -6% below its recovery high.  Uncertainty surrounding the potential impact of healthcare reform has many investors questioning the outlook of healthcare industry stocks.  Meanwhile, other industry groups have been showing superior strength and leadership.

Rovi Corp (ROVI +$0.13 or +0.35% to $37.68) posted a small gain today with below average volume. Since its last appearance with an annotated graph in this FSU section on 2/25/10 under the headline "High-Ranked Computer Software - Security Firm Perched Near Highs" the high-ranked Computer Software - Security firm triggered a technical buy signal with a high volume gain on 3/02/10. That was followed by a recent streak of 8 consecutive gains that included 3 consecutive gains into new high ground on heavy volume. Now it is extended from a sound base and trading above its "max buy" level, so disciplined investors would avoid chasing it and wait for another ideal time to accumulate shares. Meanwhile, prior chart highs in the $34 area define an important support level to watch on pullbacks.  

ROVI was featured in yellow with pivot point based upon its 10/09/09 high noted in the 2/25/10 mid-day report (read here).  Its subsequent breakout and ability to rally to a new 52-week high with at least +50% above average volume behind the gain may have signaled the beginning of a substantial advance. Earnings per share increases in 3 of the past 4 quarterly comparisons versus the year ago period showed better than +25% growth.

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.