The major averages ended lower on Friday but higher for the week after the Dow Jones Industrial Average rallied above the psychologically important 10,000 mark for the first time since October 2008. On Friday, volume was higher than the prior session on the NYSE and near the prior session total on the Nasdaq exchange as a series of options expired. Decliners trumped advancers by about a 2-to-1 ratio on the NYSE and on the Nasdaq exchange. There were 27 high-ranked companies from the CANSLIM.net Leaders List, making a new 52-week high and appearing on the CANSLIM.net BreakOuts Page, less than the 48 issues that appeared on the prior session.  On Wednesday there were 74 high-ranked companies (39% of the total) from the list that hit new highs, evidence of a healthy crop of strong leaders that bodes well concerning the M criteria. New 52-week highs substantially outnumbered new 52-week lows on both major exchanges, and new lows were again in the single digits.

The major averages closed mixed and without any great changes after central banks, flush with record reserves, announced that they are moving away from the US dollar and into the euro and the yen. Policy makers across the globe announced record reserves during the third quarter. Bloomberg.com reported that foreign currency holdings grew by $413 billion last quarter, which is the highest reading since 2003, to $7.3 trillion. Central banks which reported currency breakdowns put +63% of the new cash into euros and yen in the third quarter according to Barclays Capital. That is the highest percentage in any quarter, with more than an $80 billion increase. The US currency has lost -10.3% on a trade-weighted basis over the past six months, which is the largest decline since 1991. The report showed the US dollar’s 37% share of new reserves fell from about a +63% average since 1999.

Charts courtesy www.stockcharts.com

PICTURED 1: The  Networking Index ($NWX -0.71%) hit new 2009 highs and encountered resistance this week.

Charts courtesy www.stockcharts.com

PICTURED 2: The Internet Index ($IIX -0.85%) hit new 2009 highs and encountered resistance this week.

W N S Holdings Ltd Ads  (WNS +$1.20 or +7.20% to $16.70) posted a considerable gain today on more than 2 times average volume which helped it trade and close above its pivot point, triggering a technical buy signal while clearing stubborn resistance. Since featured at $15.28 in yellow in the 9/28/09 mid-day report (read here) it had encountered resistance in the $16 area while consolidating just above important support at its 50-day moving average (DMA) line. Quarterly earnings have been above the +25% guideline and its annual earnings history has been great, satisfying the C & A criteria. However, sales revenues growth has decelerated, raising some concerns.  Only 14.5 million shares are in the public float, which is considered a good characteristic concerning the S criteria, and could contribute to greater volatility in the event of any heavier institutional buying or selling that may come. 

For now, the high-ranked Indian Commercial Services might be an ideal candidate for investors' to accumulate, while disciplined investors would avoid chasing the stock more than +5% above its pivot point.  Meanwhile, any deterioration back into its prior base would raise concerns, especially if it negates its breakout with a close under $16 again.  Recent lows and its 50 DMA line are important support now, where violations would trigger technical sell signals.

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.