Upgrade your membership to see all of the expert analysis we have published on WHG now!
Breakout Working Amid Poor Market Environment - Tuesday, July 15, 2008
Healthy stocks that are within close striking distance of new highs are often great buy candidates for investors to keep on their watch lists, especially when the companies match favorably with all of the investment system's criteria. When a stock is more than -10% off its 52-week high, and if it has violated its 50-day moving average (DMA) line, then the outlook only gets worse and worse as it spends a greater period of time trading deeper under that important short-term average line. By the time a stock's 50 DMA line starts sloping downward it should also be acknowledged that the stock has been struggling for a long while, in which case it might be time to reduce exposure and look for places to put that money to work in stronger buy candidates.
Westwood Holdings Group (WHG +$1.33 or 2.96% to $46.25) closed higher today on above average volume and hit a new 52-week high making it a prime candidate for a strong watchlist. It appeared in yellow on Friday, July 11, 2008 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $42.60 pivot point (based on its 5/28/08 high plus ten cents) and the following note: "Y - Gain today for a new all-time high with volume running at an above average pace. There is no resistance remaining due to overhead supply. Recently found support near its 50 DMA line on pullbacks after rising from a long flat base. Good quarterly and annual earnings growth (good C & A criteria). Very small supply of shares could contribute to great volatility if the institutional crowd rushes in or out." Since that time it advanced and hit fresh highs, largely moving in the opposite direction as the major averages. However, this does not undermine the fact that market conditions (the M criteria) still argue against new buying efforts until at least one of the major averages produces a follow-through day. WHG sports strong ranks and has exhibited strong sales revenues and earnings increases in recent quarters. Odds are against investors in a market that is in a correction, as 3 out of 4 stocks will tend to follow the direction of the major averages.
C A N S L I M | StockTalk | News | Chart | SEC | Zacks Reports | 
View all notes | Alert me of new notes | CANSLIM.net Company Profile