When the market's doing well and dragging most stocks along with it, investing is relatively easy. Just find at least a decent fundamental story behind a well-paced chart, and let 'er rip. When things aren't going well for the broad market though - and they haven't been since last week - the game changes significantly. If you're a "long only" player in a bearish tide, you've got to find the names that are exhibiting the best momentum.
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With that in mind, here are four names that have seen heavy accumulation and maintained uptrends while most other stocks have been getting pounded over the last week and a half. If the underlying corporate results support the strength, so much the better.
It's All Relative
American Apparel Inc. (NYSE:APP) actually began its upward journey with a high-volume leap back on November fourth. Since then, it's continued to make forward progress on rising volume, which is a bit surprising considering the company reported what could only be described as a major disappointment when it unveiled last quarter's numbers on the ninth. It's all relative though; the past and projected numbers are still better than the market had priced in, and the stock is rolling as such. Just don't be left standing when the music stops.
Just the Beginning
Granted, most of the recent technical accumulation of Daktronics Inc. (Nasdaq:DAKT) fell on one day (Wednesday), but this electronic display manufacturer has been methodically gathering more buyers since the August pop shook it out of its rut. Though the 50% run up from that August low is intimidating, current buyers may be eyeing bigger things like the fact that it's still priced at about one third of its 2007 peak value.
It's no fluke though. Daktronics is expected to nearly double its annual EPS between this year and next year (to $0.38). Considering the company posted per-share earnings of $0.06 last quarter versus the expected loss of $0.04, it's not like that lofty income level is out of reach.
Sooner or Later
It's subtle, but it's there. Over the last week and a half, Enzon Pharmaceuticals (Nasdaq:ENZN) hasn't made a ton of upward progress. But, it's been well support by the 200-day moving average line. While it's been resting there, the accumulation has started to ramp up to levels we've not seen in months. (To learn more, see Support And Resistance Reversals.) One of these buying spree days could eventually be the one that gets traction.
Right Product at the Right Time
Take-Two Interactive (Nasdaq:TTWO) has admittedly been volatile since the beginning of the year, but since September one thing has become evident - the 'up' days are on much greater volume than the 'down' days. That's why TTWO has been able to make its 40% run from August's lows.
Like Daktronics though, these buyers may well be thinking about the fact that Take-Two shares have miles to go before hitting the headwinds of prior highs (more than a double from their current price). The projected 2011 P/E of 12.6, which would also mean a return to annual profitability for the video game maker, should help drive the stock to that end.
But didn't the gaming industry see yet-another sales decline in October? Yep - this one by 4%. The industry really isn't measured by the calendar though, nor is it tremendously affected by the economy. Video game sales are largely determined by hot-selling new titles, no matter when they are launched and no matter how competitive the environment is at that time.
So what? While it's still too soon to call it an epidemic of Call of Duty or Grand Theft Auto proportions, Take-Two's NBA 2K11 was October's best-selling video game. If that momentum can just be carried into the holiday shopping season, the company may add to what's becoming a long string of earnings beats. (These characters sell. Find out more in 5 Top-Earning Video Game Characters.)
You'll have to dig further into these names yourself, but their ability to resist the bearish tide is reason enough for investors to take notice.
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