Stocks opened lower after the Australian Central Bank raised interest rates for a 5th time by a quarter point to +4.25% and Greece rejected an EU-IMF aid package. Volume totals on the NYSE and on the Nasdaq exchange were reported higher compared to Monday's totals as the major averages ended the session mixed with small net changes, and small-caps led while blue chips lagged. Breadth was slightly positive as advancers led decliners by about a 17-to-13 ratio on the NYSE, and by a 5-to-4 ratio on the Nasdaq exchange. New 52-week highs trumped new lows on both exchanges yet again. There were 58 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, down from  the 79 issues that appeared on the prior session.  A healthy crop of new leaders making new highs bodes well for any market rally, so the recent expansion in leadership has been a welcome post-holiday improvement.

Overnight, the Australian Central Bank raised interest rates for a 5th time since the March 2009 low to help curb its red hot economy. The euro tanked (greenback rallied) after Greece denied an EU-IMF backed plan to help it recovery from its worst financial crisis since WWII. Stateside, the Federal Reserve released the minutes of its latest meeting which showed a stronger, not weaker economic outlook. Looking forward, the next "big" news event will be Q1 earnings season which is slated to begin next week. So far, analysts believe that earnings will be positive as the economy continues to recover from the worst financial crisis since the Great Depression.

The benchmark S&P 500 Index currently has 4 distribution days while the Nasdaq Composite and Dow Jones Industrial Average have 3 since the March 1, 2010 follow-though-day (FTD). These distribution days have not been damaging, and normally it is considered healthy for the major averages to have less than 4 distribution days in a four week period. 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 proactively be buying high quality breakouts meeting the investment system guidelines. Trade accordingly.

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PICTURED: The Nasdaq Composite Index powered to another new recovery high, helped by ongoing strength in the tech sector.

The Bank Index ($BKX +2.43%) was a standout gainer on Tuesday and the Broker/Dealer Index ($XBD +0.69%) and Retail Index ($RLX +0.56%) also provided some important positive influence for the major averages. The Healthcare Index ($HMO +0.55%)  
rose, and the Internet Index ($IIX +0.78%) and Networking Index ($NWX +0.99%) gave the tech sector a lift, but the Semiconductor Index ($SOX -0.62%) and Biotechnology Index ($BTK -0.29%) backpedaled.  The Gold & Silver Index ($XAU -0.28%) also edged lower while the Integrated Oil Index ($XOI -0.02%) held its ground and the Oil Services Index ($OSX +0.43%) posted a small gain.

Charts courtesy www.stockcharts.com

PICTURED: The Bank Index ($BKX +2.43%) hit a new recovery high. Recent gains underpinning the rally bode well for broader market outlook.

Pegasystems Inc. (PEGA +$0.29 or +0.77% to $38.05) has failed thus far to follow through with confirming gains on heavy volume since it last appeared in this FSU section on 3/15/10 with an annotated graph under the headline "Software Firm Breaks Out After Announcing Acquisition."  That considerable gain above its pivot point with more than 3 times average volume met the requirement for a technical buy signal. The bullish action came after the high-ranked Computer Software - Financial firm announced plans to buy Chordiant Software Inc (CHRD), a firm with sub par fundamentals under the investment system guidelines. It is far more common for any company making an acquisition to pull back while the firm being acquired rises, however the market reacted positively to the news and lifted PEGA shares.

PEGA recently found support above its 50-day moving average (DMA) line after slumping below its pivot point and testing support near prior chart highs previously noted as "an initial support level to watch on subsequent pullbacks."  Another concern is that its Relative Strength rank has slumped to 72 from an 88 back on February 8, 2010, whereas the best buy candidates under the investment system rules are stocks with RS ranks above the 80 minimum guideline. It had 80+ ranks when it was featured in the January 2010 issue of CANSLIM.net News (read here). The company has attracted an increasing number of institutional investors, as the number of top-rated funds owning its shares rose from 43 in Sep '08 to 90 in Dec '09, which is a solid reassurance concerning the investment system's I criteria. It has shown good sales revenues increases and its earnings increases were well above the +25% guideline in the 5 last quarterly comparisons versus the year ago period. 

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.