Jim Van Meerten's  Instablog

In choppy markets the best way to find stocks that still have consistent momentum is to use a reliable screener like Barchart. This morning I screened the Mid Cap S&P 400 stocks to find 3 with charts that I still like and found Bob Evans Farms (BOBE), Collective Brands (PSS) and LKQ Corp (LKQX)

Bob Evans Farms (BOBE)

Barchart technical indicators:

• 96% Barchart technical buy signal
• Trend Spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 8 new highs and up 7.57% in the last month
• Relative Strength Index 60.29%
• Barchart computes a technical support level at 39.29
• Recently traded at 39.86 with a 50 day moving average of 38.01

Collective Brands (PSS)

Barchart technical indicators:

• 64% Barchart technical buy signal
• Trend Spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 9 new highs and up 9.31% in the last month
• Relative Strength Index 64.25%
• Barchart computes a technical support level at 20.97
• Recently traded at 21.26 with a 50 day moving average of 19.72

LKQ Corp (LKQX)

Barchart technical indicators:

• 64% Barchart technical buy signal
• Trend spotter buy signal
• Above its 20, 50 and 100 day moving averages
• 11 new highs and up 15.69% in the last month
• Relative Strength Index 60.25%
• Barchart computes a technical support level at 33.57
• Recently traded at 35.17 with a 50 day moving average of 32.22

Barchart Morning Call

BC - 1 hr ago

Overnight Developments

• June E-mini S&Ps this morning are trading slightly lower by -1.50 points on a little long liquidation pressure after Monday's rally. The stock market remains hopeful about growth measures in Europe and China, but Fitch today downgraded Japan's credit rating and OECD's semi-annual forecast indicated lackluster global economic conditions through next year. Commodity prices are trading lower today with gold down 0.70% and crude oil down 0.46%. The dollar index is mildly higher by +0.25%. T-note prices are down 7 ticks this morning.
• The Euro Stoxx 50 is up +0.67% this morning as hopes emerge that EU leaders at this summit on Wednesday will seriously consider growth measures. Asian stocks today closed higher almost across the board with help from yesterday's U.S. stock market rally: Japan +1.10%, Hong Kong +0.62%, China +1.56%, Taiwan +1.15%, Australia +1.16%, Singapore +1.20%, South Korea +1.69%, India -0.97%, Turkey +0.33%.
• UN International Atomic Energy Agency (IAEA) Director General Yukiya Amano said today that the IAEA and Iran have reached an agreement on nuclear inspections and will site an accord "quite soon." There were no details on exactly what was agreed to or when the accord would be signed. One of the demands on Iran is complete inspections of sensitive nuclear sites, along with a halt of uranium enrichment activity and eventually the shipping of enriched uranium out of Iran. Iran might not be serious about inspections and may just be trying to split negotiators ahead of tomorrow's second round of talks between Iran and the P5+1 (i.e., the five permanent UN Security Council members plus Germany). Still, some reports of progress are better than nothing when it comes to Iran's nuclear program. Even if Iran agreed to a full inspection program, however, that would be unlikely to be enough to get sanctions eased since Iran still needs to halt enrichment and meet other requirements.
• Fitch today cut Japan's long-term local currency credit rating by one notch to A+, the fifth highest ranking, with a negative outlook. Fitch cut Japan's foreign-currency rating by two notches to A+. Fitch took the action because of Japan's limited progress in addressing its massive debt burden. The OECD today that Japan's gross public debt will be 223% of GDP in 2013, up from a forecasted 214% in 2012. Japan's JGB yields remain low despite the massive debt mainly because Japan finances its debt mainly from domestic investor savings and is not dependent on foreign investor funding or trust.
• OECD today left its OECD country GDP forecast unchanged at +1.6% for 2012. However, OECD cut its GDP forecasts for the Eurozone to -0.1% for 2012 and +0.9% for 2013 from its estimate last November of +0.2% and +1.4%, respectively. OECD said that there is a risk that the spiraling Eurozone debt crisis may hurt the global economy. OECD said there is room for the ECB to further ease monetary policy and that the situation may require the ECB to engage in further government bond purchases. OECD forecasted U.S. GDP growth at +2.0% in 2012 and +2.5% in 2013. OECD said for the U.S. that, "The risk of excessive fiscal tightening in 2013 remains to be addressed, failing that, growth would be severely affected." OECD cut its estimate for Chinese GDP growth to +8.2% in 2012 and +9.3% in 2013 from its November forecast of +8.5% and +9.5%, respectively. OECD said that if China's growth continues to weaken in Q2, the Chinese government "should speed up implementation of key infrastructure projects."
• Chinese officials plan to speed up approval of infrastructure projects and allocate construction spending faster in order to boost economic growth, according to a report today in the China Securities Journal.
• China's April leading economic index of +0.8% y/y was unchanged from March's rise of +0.8% y/y and down slightly from +1.0% y/y in February.
• Spain today successfully sold short-term bills and its 2-year note yield fell 14 bp and the its credit default swap prices fell by 17 bp to 538 bp. Spain today sold 2.5 billion euros worth of bills, which was slightly more than its target of 2.5 billion euros. The Italian 2-year yield today fell by 18 bp.
• The BOJ began a 2-day meeting today but the market consensus is that the BOJ will not announce any fresh stimulus measures. The BOJ just increased its bond purchase program at its meeting a month ago.
• Greek Radical Left leader Tsipras is on a tour of Europe and is meeting today with left-leaning Germany opposition politicians. However, it is telling that Mr. Tsipras is not meeting any members of the German government who undoubtedly do not want to convey any legitimacy on Mr. Tsipras ahead of the June 17 Greek elections. Mr. Tsipras is campaigning on repudiating the austerity terms in the Greek bailout agreement while still somehow staying in the euro.

Overnight U.S. Stock News

• June E-mini S&Ps this morning are trading are slightly lower by -1.50 point (-0.11%), awaiting further developments on Europe and today's economic reports. Stocks were undercut this morning by long liquidation pressure after yesterday's rally, today's downgrade of Japan by Fitch, and the OECD's lackluster forecast for world GDP growth for 2012 and 2013. Medtronic this morning reported its Q1 EPS at 99 cents, slightly higher than the consensus of 98 cents. There are also earnings reports today from DELL-Dell (0.46), AZO-Autozone (6.25), RL-Ralph Lauren (0.85), ADI-Analog Devices (0.51), AVGO-Avango Technology (0.63), BBY-Best Buy (0.60), PETM-Petsmart (0.73), WSM-Williams-Sonoma.
• U.S. stocks on Monday closed sharply higher: S&P 500 +1.60%, Dow Jones +1.09%, Nasdaq 100 +2.70%. Stocks on Monday rallied sharply on short-covering after the recent plunge, sparked by growth-supportive comments from Chinese Premier Wen Jiabao. Premier Wen over the weekend said, "We should continue to implement a proactive fiscal policy and a prudent monetary policy, while giving more priority to maintaining growth." The comment came after Wen Jiabao was told by officials in six provinces that "there are prominent problems seen in areas including insufficient demand and falling profits in some industries and companies. The economy is facing increasing downward pressures." Premier Wen's comment spurred expectations that China over the near-term will announce new growth measures. U.S. stocks were also boosted on Monday by takeover speculation after Cooper Industries (CBE) rallied by 25% on a buy-out offer from Eaton (ETN). The markets were also encouraged by German Finance Minister Schaeuble's comment yesterday, after meeting with his new counterpart French Finance Minister Moscovici, that ?We will engage all ideas constructively and find solutions in order to strengthen sustainable growth.? Mr. Moscovici said that French President Hollande wants ?everything on the table? at the informal EU summit on Wednesday including joint euro-area bonds.

Today's Market Focus

June 10-year T-notes this morning are down 7 ticks on the higher trade in European and Asian stocks combined with some supply overhang ahead of the $99 billion coupon package that begins today. T-note prices on Monday closed lower: TYM2 -7.5, FVM2 -0.5. T-note prices fell on Monday as the sharp rally in U.S. and global stocks reduced safe-haven demand for Treasury securities. Even European stocks closed slightly higher by +0.26%. There was also some supply overhang as the market goes into the $99 billion T-note auction package that starts today with the sale of $35 billion in 2-year T-notes. The 2-year note is trading at 0.29%, which may be an acceptable yield from the standpoint of parking money in a relatively safe place but is a sure way to lose money considering that the inflation-adjusted yield on the security is a negative -1.13% against the 2-year T-note breakeven inflation expectations rate of 1.42%. The dollar index this morning is trading +0.21 with EUR/USD down 0.58 (-0.45%) and USD/JPY +0.45 (+0.57%). The yen fell today on the Fitch downgrade and warning about Japan's alarming fiscal condition. The dollar index on Monday closed mildly higher: Dollar Index -0.35, EUR/USD +0.0038, USD/JPY +0.29. The dollar index saw some continued long liquidation pressure after sharp rally seen in the past 3 weeks. German Finance Minister Schaeuble made a euro-bullish comment yesterday by saying, ?We will engage all ideas constructively and find solutions in order to strengthen sustainable growth.? His meeting on Monday with new French Finance Minister Moscovici apparently went well, which was constructive from the standpoint of forming a strong German-French alliance with new French President Hollande to tackle on the ongoing European debt crisis. What the markets certainly do not need at this point is squabbling between Germany and French about "growth" measures. July WTI crude oil prices this morning are down -43 cents (-0.46%) and July gasoline is down -0.26 cents (-0.09%). Bearish factors center on the indications of some type of inspection agreement between the IAEA and Iran. Crude oil and gasoline prices on Monday rallied sharply: CLN12 +1.46 (+1.59%), RBN2 +0.0484 (+1.72%). Crude oil and gasoline rallied mainly on short-covering yesterday after the sharp losses seen in the past 3 weeks and on the pro-growth comments made by Chinese Premier Wen, which seemed to foreshadow some new Chinese stimulus measures to be announced over the near-term. In addition, Goldman Sachs released a report saying that the balance between global crude oil supply and demand is tightening due to supply constraints caused by the export restrictions on Iranian oil. The market consensus for Wednesday's weekly DOE report is for a further 1.5 million barrel rise in crude oil inventories to another new 21-3/4 year high. Today's report is for the week ended May 18, which is prior to the reversal of the Seaway pipeline on May 19. The reversal in the Seaway pipeline should result in a slow drawn-down in oil inventories at the Cushing hub, which reached another new record high of 45.1 million barrels last week. However, the Seaway reversal won't necessarily have an impact on overall U.S. inventories since the oil will simply be flowing from Cushing to the Gulf coast and be stored in facilities at the Gulf, thus have little net impact on overall U.S. crude oil inventories. The DOE report is expected to show a 500,000 increase in gasoline inventories and a 500,000 barrel decline in distillate inventories. The consensus is for the refinery utilization rate to rise 0.4 points to 88.7%, adding to last week's sharp 1.9 point rise to 88.3%. Inventories are running 2.0 points above the 5-year seasonal average of 86.3%.

Today's U.S. Earnings Reports

Earnings reports (sorted by mkt cap): MDT-Medtronic (consensus $0.98), DELL-Dell (0.46), AZO-Autozone (6.25), RL-Ralph Lauren (0.85), ADI-Analog Devices (0.51), AVGO-Avango Technology (0.63), BBY-Best Buy (0.60), PETM-Petsmart (0.73), WSM-Williams-Sonoma.

Global Financial Calendar

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Barchart.coms Chart of the Day - Isis Pharmaceuticals (ISIS)

Barchart Research Team - BC - Mon May 21, 6:02PM CDT

Related Stocks
ISIS - Isis Pharmaceuticals

The "Chart of the Day" is Isis Pharmaceuticals (ISIS), which showed up on Monday's Barchart "52-week High" list. Isis on Monday posted a new 1-year high of $9.42 and closed up 5.14%. TrendSpotter has been long since May 10 at $8.95. In recent news on the stock, Isis reported Q1 EPS of -24 cents, which was slightly better than expectations of -26 cents. Piper Jaffray on May 1 upgraded Isis to Overweight from Neutral and raised its price target to $15 from $10. Isis Pharmaceuticals, with a market cap of $900 million, is a leading genomics-based drug discovery and development company that is focused on RNA.

(click to enlarge)

How we found the Chart of the Day:

We found the "Chart of the Day" by scanning the Barchart "52-week Highs" page. That page shows all the stocks that have posted new 52-week highs, which is a popular sign of strong upside momentum.

The status of Barchart's Opinion trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 10 minutes and can therefore change during the day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com web site when you read this report.

• TrendSpotter: Buy
• Short-Term Indicators: 80% Buy
• Medium-Term Indicators: 100% Buy
• Long-Term Indicators: 100% Buy
• Overall Average 96% Buy

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