Stocks experienced their most volatile week since February as investors digested a slew of economic news, earnings reports, and political data. Volume totals on Friday were reported higher on the NYSE and lower on the Nasdaq exchange compared to Thursday's levels. Decliners led advancers by about a 3-to-1 ratio on the NYSE and on the Nasdaq exchange. New 52-week highs easily trumped new 52-week lows. There were 38 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 35 issues that appeared on the prior session. A healthy crop of new leaders making new highs bodes well for any market rally.

Stocks ended mixed to mostly lower on Monday after weakness emerged in the closely followed financial and housing sectors. The major averages ended near their intra-day lows after several high profile financial and housing stocks suffered distribution. On Tuesday, stocks tanked after S&P Rating Services lowered Greek's debt to junk and cut Portugal's rating two notches. This sent European stock market's plunging to their worst single day decline since November and sparked concern that other European countries will need to be downgraded as well. On the home front, the much anticipated Goldman Sachs (GS -9.39%) testimony began on Capital Hill. Several Goldman executives, including Fabrice Tourre the young trader at the center of the mess, spent their day testifying on Capital Hill. Mr. Tourre read a prepared statement on his role marketing the Abacus collateralized debt obligation (CDO) at the heart of the investigation.

Stocks edged higher on Wednesday after the Federal Reserve held rates steady near historic lows, and Spain's debt was downgraded. Around 2PM EST, the Federal Reserve held rates steady and reiterated their stance to keep their benchmark interest rate near zero for an “extended period” as the economy continues to improve. The Fed said, “Economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.” Futures trading currently show that there is a 15% chance that the Fed will raise rates by their August meeting. In March, the odds were closer to 50%. 

Stocks rallied on Thursday, erasing most of their losses from earlier in the week after the euro stabilized, the latest multi billion dollar acquisition was announced, and several high profile companies reported stronger than expected results. Shares of Palm Inc. (PALM +0.51%) surged over after Hewlett-Packard Co. (HPQ -1.72%) acquired the company for around $1.2 billion.

Stocks opened higher on Friday after the government said Q1 GDP grew at a 3.2% as consumer spending rose. The weak close for the session and for the week raised some concern as Friday (for the NYSE averages) marked the latest of several distribution days since the rally was confirmed on the March 1, 2010 follow-through day (FTD).

It is important to note that the major averages have been steadily rallying since early February and a pullback of some sort should be expected.  The increasing number of distribution days is putting pressure on this 9-week rally. However, the fact that the market continues to shrug off most of the negative data bodes well for this 13-month bull market.

PICTURED: The Nasdaq Composite Index's wider intra-day trading ranges recently are indicative of uncertainty after a steady climb of +20.7% from the February low.

Charts courtesy www.stockcharts.com

PICTURED: The Semiconductor Index ($SOX -4.54%) suffered a considerable loss on Friday, falling toward prior highs and its 50-day moving average (DMA) line.

Ulta Salon Cosmetics & Fragrance, Inc. (ULTA -0.96 or -3.99% to $23.12) started higher, but another "negative reversal" today led to a loss on light volume and close near the session's low. This week it rallied back on lighter volume following a gap down and heavy distributional pressure after the previously noted negative reversal at its 52-week high. A subsequent violation of its 50-day moving average (DMA) line or recent chart low $21.66 could trigger damaging technical sell signals.

ULTA made very little headway since the detailed Stock Bulletin with annotated graph was published soon after it was featured in the 3/12/10 mid-day report (read here) as a considerable gain with heavy volume helped it reach a new 52-week high. It was noted as it rose from an 8-week cup shaped base following stronger results for the quarter ended January 31, 2010.

This high-ranked leader in the Retail - Misc group which has shown accelerating sales revenues increases.  Strong quarterly earnings increases above the +25% guideline in the 3 latest quarterly comparisons satisfies the C criteria. The number of top-rated funds with an ownership interest has grown from 49 funds in March '09 to 78 funds as of Mar '10 which is an encouraging sign of increasing institutional interest (the I criteria). Management's 51% ownership stake keeps the company's directors very motivated to look after and build shareholder value. Its current Up/Down Volume Ratio of 1.6 is an unbiased bullish indication concerning its recent action. 

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.