Stocks rallied on Thursday after trade data helped offset concerns about an increase in weekly unemployment claims. Volume, an important indicator of institutional sponsorship, was slightly lower than Wednesday's total on the NYSE while volume was reported higher on the Nasdaq exchange.  Advancers led decliners by about a 3-to-2 ratio on the NYSE, but the breadth was negative by a similar margin on the Nasdaq exchange. There were 24 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, greater than the total of 13 issues that appeared on the prior session. New 52-week highs outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange.

Before Thursday's opening bell, the Labor Department said jobless claims topped expectations and rose last week to 474,000 after falling for five straight weeks. However, the bulls found comfort in the fact that the four-week average, which smooths out the data and is less volatile, slid to its lowest level since September 2008. Elsewhere, the Commerce Department said the trade deficit narrowed to $32.9 billion in October. The report showed that exports surged in October thanks in part to a weaker dollar. Furthermore, this was the sixth consecutive month that exports rose which bodes well for the US economy.

Around 2:30PM EST, the bears showed up and put pressure on the major averages. The small cap Russell 2000 index turned lower and slid into negative territory after being up for most of the day. The small cap index closed just above its 50-day moving average as it continues working on the right side of its current base. It is important to note that since the March low, small caps have outperformed their larger cap brethren. However, since the end of Q3, that relationship reversed and large caps are currently outperforming their peers.

PICTURED: The Dow Jones Industrial Average continued basing and closed just below resistance on Thursday. Volume remains light.

Charts courtesy www.stockcharts.com

PICTURED: The Healthcare Index ($HMO +4.34%) was a standout gainer as companies including CIGNA Corp. (CI +6.05%) and Unitedhealth Group, Inc. (UNH +6.35%) rallied.  The optimism came as the Senate appeared less likely to move forward any time soon with the public option part of current healthcare reform initiatives.

Credit Acceptance Corp (CACC -$0.30 or -0.87% to $34.26) is consolidating just below its 50-day moving average (DMA) line (now $34.77). It has been showing some resilience near that important short-term average line while enduring some distributional pressure. After an 8-week flat base it is continuing its consolidation above prior chart highs in the $32 area, building a base-on-base pattern. The Finance - Consumer/Commercial Loans firm has maintained a great track record of annual and quarterly sales revenues and earnings increases that satisfy the C and A criteria of the investment system.  The high-ranked leader's 9/29/09 breakout gain was backed by more than 2 times average volume. Since featured it has also risen above its 2006-2007 highs ($33-34) to new all-time highs, which is a very reassuring sign of strength. CACC was featured in yellow in the 9/29/09 mid-day report (read here).

Investors might be concerned about the weakness and wait for signs of support while considering the current consolidation an opportunity to accumulate shares on the stock's first pullback to its 50 DMA line since its bullish breakout. However, it has met the definition of a new "flat base" which could eventually be followed by a fresh technical buy signal. In fact, a base-on-base pattern is considered to be a very solid set-up pattern. Patience may allow investors to see more proof of institutional buying demand (the I criteria), and make initial buys or add-on buying efforts in the event of a powerful breakout above its $37 high with volume.  Meanwhile, further weakness would raise more serious concerns, especially if volume expands behind more damaging losses under its recent lows.

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.