The major averages ended the week mixed as the US dollar continued to rally and investors digested a slew of economic data. Stocks closed higher on Friday as volume, an important indicator of institutional sponsorship, jumped well above Thursday's levels due to quadruple witching. Advancers led decliners about a 3-to-2 ratio on the NYSE and on the Nasdaq exchange. There were 26 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 from the total of 20 issues that appeared on the prior session. New 52-week highs still outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange.

On Monday, stocks edged higher after Abu Dhabi announced it would bail out Dubai World and Exxon Mobil Corp (XOM -0.01%) announced plans to buy XTO Energy Inc. (XTO -0.04%) for $31 billion. The major averages closed just below their near term resistance levels and spent the rest of the week pulling back toward their respective support levels (50-day moving average lines). On Tuesday, the major averages closed lower as investors digested the latest round of disconcerting economic data. Before Tuesday's opening bell, two tepid economic reports were released which suggested stagflation may be on the horizon (higher inflation coupled with low economic activity). The producer price index (PPI) surged while the Empire State manufacturing index plunged. That afternoon, the National Association of Home Builders released their housing market index. The index, which rates the overall economy and housing market conditions, fell 1 point in December to 16 which is a very low reading.

Charts courtesy www.stockcharts.com

PICTURED: The Bank Index ($BKX +2.30%) encountered resistance at its 50-day moving average (DMA) line.  It halted its slide near prior chart lows.  Further deterioration in the financial group would hurt the overall market outlook, since financial shares are a reliable leading indicator.

Salesforce.com, Inc. (CRM +$3.00 or +4.62% to $67.88) gapped up today for a small gain, then went on to rally with heavy volume for a new 52-week high. It had been recently consolidating above important support at its 50-day moving average (DMA) line. Over the past 5 weeks it formed a sound new flat base. Its color code was changed to yellow and a new pivot point based upon its 11/16/09 high plus 10 cents was noted earlier today. A 5-week consolidation is the minimum length for a proper flat base.  A convincing breakout above its prior chart high with at least +50% above average volume was all that it took to trigger a new technical buy signal.

Patience has allowed disciplined investors another ideal entry point with the reassurance of heavy institutional buying (the I criteria) demand.  That technical buy signal is no guarantee it will go on to produce huge gains, but such signs of big buying demand are considered as the critical "proof" for investors using this fact-based investment system.  Meanwhile, any violation of its 50 DMA line and recent chart lows in the $61 area would raise concerns and trigger technical sell signals.  Not long ago it found prompt support at its 50-day moving average (DMA) line then rallied to a new 52-week high and encountered some heavy distribution. Each subsequent test of that short term average line is considered to be more failure prone, while staying above the 50 DMA line is a healthy sign of institutional support. 

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.