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AFTER MARKET UPDATE - MONDAY, OCTOBER 22ND, 2012
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Indices NYSE Nasdaq
DOW  +2.38 13,345.89 +0.02% Volume 634,482,540 -33% Volume 1,608,439,160 -26%
NASDAQ +11.34 3,016.96 +0.38% Advancers 1,442 46% Advancers 1,221 48%
S&P 500 +0.62 1,433.81 +0.04% Decliners 1,535 49% Decliners 1,234 48%
Russell 2000 -0.48 820.52 -0.06% 52 Wk Highs 48   52 Wk Highs 36  
S&P 600 -0.34 458.37 -0.07% 52 Wk Lows 27   52 Wk Lows 55  

Major Averages Overcame Early Weakness To End Flat

The major averages erased an early retreat to finish flat on Monday. The volume totals were reported lighter on the NYSE and on the Nasdaq exchange versus the prior session's totals. Decliners led advancers by a narrow margin on the NYSE and on the Nasdaq exchange. The total number of new 52-week highs still outnumbered new 52-week lows on the NYSE, but new lows outnumbered new highs again on the Nasdaq exchange. There were 13 high-ranked companies from the CANSLIM.net Leaders List that made new 52-week highs and appeared on the CANSLIM.net BreakOuts Page, down from the prior session total of 19 stocks. There were gains for 11 of the 19 high-ranked companies currently included on the Featured Stocks Page.

 

Stocks finished little changed as investors digested a batch of mixed earnings reports. Caterpillar Inc (CAT +1.45%) advanced despite forecasting weak 2013 sales growth. Peabody Energy Corp (BTU +11.82%) was also higher as it delivered a profit outlook above expectations. On the downside, Freeport-McMoRan Copper & Gold Inc (FCX -1.46%) fell after posting a quarterly profit below street estimates for the first time in over four years.

Overall, sector action was mixed. Gains in technology supported a late push higher as Apple Inc (AAPL +3.97%) rebounded. Energy was the worst performer as Halliburton Co (HAL -1.20%) fell, and telecommunication shares were also weak with Verizon Communications Inc (VZ -0.86%) down. Profit tallies remained in focus after the closing bell with reports from Yahoo! Inc (YHOO -0.44%)  and Texas Instruments Inc (TXN .0.07%).

The spotlight turns to the final presidential debate at 9PM EST Monday night, and Election Day on November 6th.

In fixed-income, Treasuries extended last week’s losses to push yields higher. The 10-year note was down 13/32 to yield 1.81% and the 30-year bond lost 20/32 to yield 2.97%.

During market corrections the M criteria argues against new buying efforts and urges investors to take a defensive stance to protect precious capital. That stance can change back to a bullish stance where buying is encouraged when at least one of the three major averages produces a solid follow-through day (FTD).  A FTD confirming a new rally requires substantial gains on higher (ideally above average) volume, coupled with healthy leadership and a respectable number of stocks hitting new 52-week highs. Historic studies have shown that a FTD occurring between Days 4-7 of a new rally effort has often signaled the beginning of the most substantial market rallies.

Investors should continue watching individual holdings very carefully through the current earnings season and be prepared to take quick action.  Keep a watchlist of strong acting stocks with all-key criteria in anticipation of the next confirmed uptrend.  See the noteworthy candidates included on the Featured Stocks Page.

Watch for an announcement via email concerning the Q3 2012 WEBCAST. The webcast will also be available via an updated link highlighted at the top of the Premium Member Homepage

PICTURED: The S&P 500 Index managed a positive reversal after undercutting its 50-day moving average (DMA) line and prior lows, marking Day 1 of a new rally attempt. Watch for confirming gains within the ideal window for a proper FTD, meanwhile caution and patience are required.


Kenneth J. Gruneisen started out as a licensed stockbroker in August 1987, a couple of months prior to the historic stock market crash that took the Dow Jones Industrial Average down -22.6% in a single day. He has published daily fact-based fundamental and technical analysis on high-ranked stocks online for two decades. Through FACTBASEDINVESTING.COM, Kenneth provides educational articles, news, market commentary, and other information regarding proven investment systems that work in good times and bad.

Comments contained in the body of this report are technical opinions only and are not necessarily those of Gruneisen Growth Corp. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.


Defensive Groups Led Gainers

Financial shares were indecisive as the Bank Index ($BKX -0.04%) and Broker/Dealer Index ($XBD +0.04%) each ended Monday's session essentially flat. Defensive groups fared best as the Healthcare Index ($HMO +0.87%) and the Gold & Silver Index ($XAU +1.22%) posted gains. Meanwhile, the Biotechnology Index ($BTK -1.02%) led the tech sector's retreat and the Networking Index ($NWX -0.27%) also edged lower. The Semiconductor Index ($SOX +0.16%) and the Internet Index ($IIX +0.18%) tallied very small gains for the day. The Retail Index ($RLX -0.36%) created a drag on the major averages. Energy-related shares also had a slightly negative bias as the Oil Services Index ($OSX -0.54%) and Integrated Oil Index ($XOI -0.38%) ended modestly lower.

Charts courtesy www.stockcharts.com

PICTURED: The Bank Index ($BKX -0.04%) has been consolidating well above its 50-day moving average (DMA) line and near prior 2012 highs.


Industry Index Symbol Close Change % Change YTD % Change
Oil Services $OSX  228.34 -1.25 -0.54% +5.58%
Healthcare $HMO  2,470.55 +21.29 +0.87% +8.28%
Integrated Oil $XOI  1,247.32 -4.76 -0.38% +1.48%
Semiconductor $SOX  365.51 +0.59 +0.16% +0.29%
Networking $NWX  197.63 -0.54 -0.27% -8.15%
Internet $IIX  308.35 +0.55 +0.18% +9.45%
Broker/Dealer $XBD  84.07 +0.03 +0.04% +0.97%
Retail $RLX  643.88 -2.31 -0.36% +23.07%
Gold & Silver $XAU  188.07 +2.27 +1.22% +4.11%
Bank $BKX  50.42 -0.02 -0.04% +28.03%
Biotech $BTK  1,492.96 -15.43 -1.02% +36.79%


Awaiting Technical Breakout Following New Base

Middleby Corp (MIDD $122.80) finished with a quiet gain today just -0.9% off its 52-week high. Volume totals have been below average in recent weeks while stubbornly holding its ground. Subsequent volume-driven gains above the new pivot point cited may trigger a new (or add-on) technical buy signal. Its 50-day moving average (DMA) line and recent lows define near-term chart support to watch.

Its last appearance in this FSU section was on 9/18/12 with an annotated graph under the headline, "Appliance Maker Extended From Prior Base", when it was explained - "Patient investors may watch for secondary buy points of new bases to eventually be formed and noted, but disciplined investors do not chase stocks that are too extended from a sound base pattern." After it spent more time basing, on 10/08/12 its color code was changed to yellow with new pivot point cited based on its 9/06/12 high plus 10 cents. Since then, however, it has not triggered a new technical buy signal.  Disciplined investors will watch for fresh signs of institutional buying demand before taking action.

It reported earnings +58% on +23% sales revenues for the Jun '12 quarter. Recent quarterly comparisons show strong sales and earnings reasonably meeting the C criteria. Its annual earnings (A criteria) had a downturn in FY '09, yet they have otherwise been good and steady.

The number of top-rated funds owning its shares rose from 340 in Sep '11 to 383 in Sep '12, a reassuring sign concerning the I criteria. Its current Up/Down Volume Ratio of 1.6 is an unbiased indication its shares have been under accumulation over the past 50 days. Its small supply (S criteria) of only 17.0 million shares can contribute to greater price volatility in the event of institutional buying or selling.


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.

***Last / Change / Volume data in this table is the closing quote data***
Symbol/Exchange
Company Name
Industry Group
PRICE CHANGE
(%Change)
Day High Volume
(% DAV)
(% 50 day avg vol)
52 Wk Hi
% From Hi
Featured
Date
Price
Featured
Pivot Featured
Max Buy
ALXN - NASDAQ
Alexion Pharmaceuticals
DRUGS - Drug Manufacturers - Other  
$104.03 -3.59
-3.34%

$107.18

2,633,823
282.18% of 50 DAV
50 DAV is 933,400
$119.54
-12.97%
8/23/2012 $103.70 PP = $110.06
MB = $115.56
Most Recent Note - 10/22/2012 6:06:19 PM
Down today with heavy volume slumping deeper below its 50 DMA line and undercutting prior highs in the $109-110 area raising more serious concerns. Based on weak action it will be dropped from the Featured Stocks list tonight. Only a prompt rebound above its 50 DMA line would help its outlook.
>>> The latest Featured Stock Update with an annotated graph appeared on 9/26/2012. Click here.

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ASPS - NASDAQ
Altisource Ptf Sltns Sa
REAL ESTATE - Property Management/Developmen  
$112.03 +0.11
0.10%

$115.65

190,713
110.82% of 50 DAV
50 DAV is 172,100
$118.48
-5.44%
9/24/2012 $87.24 PP = $92.39
MB = $97.01
Most Recent Note - 10/18/2012 4:00:07 PM
G - Pulling back today on near average volume for 2nd consecutive loss while retreating from its all-time high. Very extended from its prior base, its prior highs in the $92 area define initial support to watch on pullbacks.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/12/2012. Click here.

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BRLI - NASDAQ
Bio Reference Labs Inc
HEALTH SERVICES - Medical Laboratories and Researc  
$30.98 -0.09
-0.29%

$31.71

184,879
60.20% of 50 DAV
50 DAV is 307,100
$32.86
-5.72%
10/3/2012 $30.90 PP = $30.25
MB = $31.76
Most Recent Note - 10/19/2012 4:25:07 PM
G - Loss today with above average volume, retreating near prior highs in the $30 area defining initial chart support above its 50 DMA line.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/8/2012. Click here.

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CFNL - NASDAQ
Cardinal Financial Corp
BANKING - Regional - Southeast Banks  
$13.67 -0.01
-0.07%

$13.94

49,711
58.01% of 50 DAV
50 DAV is 85,700
$14.79
-7.57%
8/17/2012 $12.84 PP = $13.31
MB = $13.98
Most Recent Note - 10/19/2012 4:27:53 PM
G - Managed a positive reversal today after overcoming early weakness, fighting back to a close just above its 50 DMA line ($13.65 now). Subsequent deterioration below that short-term average would raise more serious concerns.
>>> The latest Featured Stock Update with an annotated graph appeared on 9/25/2012. Click here.

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CMCSA - NASDAQ
Comcast Corp Cl A
MEDIA - CATV Systems  
$37.03 +0.08
0.22%

$37.17

10,543,029
90.17% of 50 DAV
50 DAV is 11,691,900
$37.60
-1.52%
6/11/2012 $29.94 PP = $30.98
MB = $32.53
Most Recent Note - 10/19/2012 12:28:36 PM
G - Pulling back today after a streak of 5 consecutive gains to new 52-week high territory. Found support while consolidating above prior highs in the $35 area and its 50 DMA line. Violations would trigger technical sell signals. Fundamental concerns have been repeatedly noted - "Due to sub par sales and earnings growth in the Jun '12 quarter."
>>> The latest Featured Stock Update with an annotated graph appeared on 9/21/2012. Click here.

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Symbol/Exchange
Company Name
Industry Group
PRICE CHANGE
(%Change)
Day High Volume
(% DAV)
(% 50 day avg vol)
52 Wk Hi
% From Hi
Featured
Date
Price
Featured
Pivot Featured
Max Buy
DVA - NYSE
Davita Inc
HEALTH SERVICES - Specialized Health Services  
$112.00 +1.28
1.16%

$112.20

597,164
78.04% of 50 DAV
50 DAV is 765,200
$113.48
-1.30%
9/5/2012 $102.92 PP = $100.62
MB = $105.65
Most Recent Note - 10/18/2012 10:22:20 AM
G - Hitting another new 52-week high today, getting more extended from its latest sound base. Prior highs near $100 and its 50 DMA line define near-term support to watch on pullbacks where violations may trigger technical sell signals.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/10/2012. Click here.

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GPX - NYSE
G P Strategies Corp
DIVERSIFIED SERVICES - Education and Training Services  
$18.52 -0.26
-1.38%

$18.93

48,368
76.65% of 50 DAV
50 DAV is 63,100
$20.67
-10.40%
10/8/2012 $20.00 PP = $20.77
MB = $21.81
Most Recent Note - 10/18/2012 4:39:01 PM
G - Slumped below its 50 DMA line today on light volume and finished at the session low and near recent lows. Losses exceeding its recent low ($18.82 on 10/04/12) would raise more serious concerns and trigger technical sell signals. Volume driven gains above the pivot point have not triggered a new (or add-on) technical buy signal.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/16/2012. Click here.

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LKQ - NASDAQ
L K Q Corp
WHOLESALE - Auto Parts  
$20.46 +0.03
0.14%

$20.74

1,518,055
104.85% of 50 DAV
50 DAV is 1,447,800
$21.22
-3.56%
8/9/2012 $18.97 PP = $18.72
MB = $19.66
Most Recent Note - 10/19/2012 6:22:23 PM
G - Perched near its all-time high today. Recently rallied well above its "max buy" level with no resistance remaining due to overhead supply. See latest FSU analysis for more details and a new annotated graph.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/19/2012. Click here.

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LULU - NASDAQ
Lululemon Athletica
MANUFACTURING - Textile Manufacturing  
$68.28 -0.75
-1.09%

$69.27

2,455,449
102.84% of 50 DAV
50 DAV is 2,387,600
$81.09
-15.80%
10/2/2012 $74.89 PP = $78.97
MB = $82.92
Most Recent Note - 10/22/2012 6:33:35 PM
Trading near its 200 DMA line which may act as support. Based on weak action it will be dropped from the Featured Stocks list tonight. Last week it violated its 50 DMA line with a damaging loss on heavy volume, and only a prompt rebound above that important short-term average would help its outlook improve.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/2/2012. Click here.

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MIDD - NASDAQ
Middleby Corp
MANUFACTURING - Diversified Machinery  
$122.80 +0.00
0.00%

$123.75

65,803
79.00% of 50 DAV
50 DAV is 83,300
$123.95
-0.93%
10/8/2012 $118.46 PP = $122.67
MB = $128.80
Most Recent Note - 10/22/2012 6:52:50 PM
Y - Finished just -0.9% off its 52-week high today. Volume totals have been below average in recent weeks while stubbornly holding its ground. Subsequent volume-driven gains above the pivot point may trigger a new (or add-on) technical buy signal. Its 50 DMA line and recent lows define near-term chart support to watch. See the latest FSU analysis for more details and a new annotated graph.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/22/2012. Click here.

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Symbol/Exchange
Company Name
Industry Group
PRICE CHANGE
(%Change)
Day High Volume
(% DAV)
(% 50 day avg vol)
52 Wk Hi
% From Hi
Featured
Date
Price
Featured
Pivot Featured
Max Buy
N - NYSE
Netsuite Inc
DIVERSIFIED SERVICES - Business/Management Services  
$57.95 -1.92
-3.21%

$60.01

606,299
134.58% of 50 DAV
50 DAV is 450,500
$64.70
-10.43%
8/20/2012 $55.88 PP = $59.32
MB = $62.29
Most Recent Note - 10/22/2012 6:54:40 PM
G - Color code is changed to green after violating its prior highs in the $59 area and sinking below its 50 DMA line with higher volume today triggering technical sell signals.
>>> The latest Featured Stock Update with an annotated graph appeared on 9/24/2012. Click here.

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NSM - NYSE
Nationstar Mtg Hldgs Inc
FINANCIAL SERVICES - Credit Services  
$34.34 +1.76
5.40%

$34.38

987,444
81.65% of 50 DAV
50 DAV is 1,209,400
$37.20
-7.69%
8/29/2012 $27.96 PP = $28.85
MB = $30.29
Most Recent Note - 10/22/2012 1:46:12 PM
G - Rallying today after slumping near a previously noted steep upward trendline connecting July-September lows which defines a near-term support level to watch above its 50 DMA line.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/11/2012. Click here.

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OSIS - NASDAQ
O S I Systems Inc
ELECTRONICS - Semiconductor Equipment and Mate  
$76.83 +1.21
1.60%

$77.26

145,663
118.04% of 50 DAV
50 DAV is 123,400
$79.90
-3.84%
9/5/2012 $74.39 PP = $75.10
MB = $78.86
Most Recent Note - 10/19/2012 4:32:02 PM
Y - Gapped down today for a loss with near average volume, slumping near its 50 DMA line. Touched a new 52-week high on the prior session then reversed into the red for a quiet loss. See the latest FSU analysis for more details and a new annotated graph.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/18/2012. Click here.

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RNF - NYSE
Rentech Nitrogen Ptnr Lp
CHEMICALS - Agricultural Chemicals  
$36.52 +0.12
0.33%

$37.25

240,455
60.04% of 50 DAV
50 DAV is 400,500
$40.05
-8.81%
7/27/2012 $29.58 PP = $30.60
MB = $32.13
Most Recent Note - 10/16/2012 12:58:19 PM
G - Considerable gain today, rallying from its 50 DMA line defining important near-term support after the previously noted upward trendline violation. Gains have lacked volume conviction after it halted its slide.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/4/2012. Click here.

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TDG - NYSE
Transdigm Group Inc
AEROSPACE/DEFENSE - Aerospace/Defense Products and; Services  
$147.39 +1.69
1.16%

$147.91

644,690
148.72% of 50 DAV
50 DAV is 433,500
$152.62
-3.43%
8/16/2012 $132.23 PP = $136.44
MB = $143.26
Most Recent Note - 10/19/2012 4:44:04 PM
G - Traded above average volume behind a 3rd consecutive loss today. Its 50 DMA line defines near-term support to watch above recent lows in the $138 area where violations may trigger technical sell signals.
>>> The latest Featured Stock Update with an annotated graph appeared on 9/20/2012. Click here.

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Symbol/Exchange
Company Name
Industry Group
PRICE CHANGE
(%Change)
Day High Volume
(% DAV)
(% 50 day avg vol)
52 Wk Hi
% From Hi
Featured
Date
Price
Featured
Pivot Featured
Max Buy
ULTA - NASDAQ
Ulta Salon Cosm & Frag
SPECIALTY RETAIL - Specialty Retail, Other  
$95.01 +0.23
0.24%

$95.04

597,421
75.79% of 50 DAV
50 DAV is 788,300
$103.52
-8.22%
9/4/2012 $93.17 PP = $98.52
MB = $103.45
Most Recent Note - 10/18/2012 1:13:56 PM
G - Color code is changed to green while encountering distributional pressure and sputtering near its 50 DMA line. Its Relative Strength Rating has slumped to 77, below the 80+ minimum rank for ideal buy candidates under the fact-based investment system. The latest FSU analysis discussed its waning Relative Strength under the headline "Relative Strength Line Did Not Provide Confirmation - Friday, October 05, 2012".
>>> The latest Featured Stock Update with an annotated graph appeared on 10/5/2012. Click here.

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ULTI - NASDAQ
Ultimate Software Group
INTERNET - Internet Software and Services  
$96.10 -0.31
-0.32%

$96.60

214,136
148.40% of 50 DAV
50 DAV is 144,300
$106.40
-9.68%
8/27/2012 $98.36 PP = $99.19
MB = $104.15
Most Recent Note - 10/22/2012 12:57:44 PM
G - Up from today's earlier lows following 5 consecutive losses. Raised concerns as it undercut prior lows in the $96 area after violating its 50 DMA line, triggering technical sell signals. A rebound above its 50 DMA line is needed for its outlook to improve
>>> The latest Featured Stock Update with an annotated graph appeared on 9/27/2012. Click here.

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VSI - NYSE
Vitamin Shoppe Inc
SPECIALTY RETAIL - Specialty Retail, Other  
$57.63 +0.10
0.17%

$57.66

162,426
53.18% of 50 DAV
50 DAV is 305,400
$61.83
-6.79%
10/15/2012 $57.82 PP = $60.08
MB = $63.08
Most Recent Note - 10/19/2012 4:48:44 PM
Y - Volume totals have been below average in recent weeks while consolidating near its 50 DMA line. Color code was changed to yellow while still building on a new base, and subsequent volume-driven gains are needed to trigger a new technical buy signal.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/15/2012. Click here.

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WPI - NYSE
Watson Pharmaceuticals
DRUGS - Drugs - Generic  
$87.44 +0.53
0.61%

$87.75

828,119
91.06% of 50 DAV
50 DAV is 909,400
$89.90
-2.74%
8/24/2012 $82.90 PP = $81.10
MB = $85.16
Most Recent Note - 10/16/2012 1:00:49 PM
G - Hitting new 52-week highs today with a big gain on below average volume. It is getting more extended from its prior base, and its 50 DMA line defines important support to watch on pullbacks.
>>> The latest Featured Stock Update with an annotated graph appeared on 9/28/2012. Click here.

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Kenneth J. Gruneisen founded Gruneisen Growth Corp. (2003), which prior to May 11, 2015, operated CANSLIM.net and CANSLIM.com both under license from Data Analysis Inc. / Investor's Business Daily. Kenneth has passed the CAN SLIM® Master's Exam. Gruneisen Growth Corp. now continues over two decades of fact based market analysis via FactBasedInvesting.com.

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