The major market averages gapped up sharply yesterday at the open on higher volume, an easy accomplishment given that volume on Friday was low due to the long holiday weekend. That said, after gapping nearly 1%on the open and then moving higher, major averages closed mid-range, giving the action the look of stalling on higher volume. The market is not entirely out of the woods following last Wednesday's huge-volume outside reversal day as many leading stocks gave up most of their gains or, in some cases, reversed outright. This morning the futures confirm that weakness as the market is set to gap down this morning at the time of this writing.
Tesla Motors (TSLA) remained a bright spot as it rallied over 10%, cruising through the $100 price level to close above $110. As we discussed yesterday, TSLA was buyable on the basis of Jesse Livermore's "Century Mark" rule and the stock did follow through with strong additional gains.
Haverty Furniture (HVT) had a pocket pivot off of its 10dma. Earnings and sales have accelerated strongly, and institutional sponsorship has increased 6 quarters in a row. It's group rank is #49, which puts it in the top 25%. HVT is extremely thin, and normally we avoid stocks that are too thin. With the recent increase in slope of the general market uptrend, small caps have become increasingly more favored as risk appetite increases. Some funds are small and micro cap oriented so are able to take positions in stocks such as HVT. That said, we normally focus on stocks with average daily dollar volumes of at least $10 mil in such environments. The orderliness of HVT's price/volume action in that it has yet to violate its 50-day moving average since its uptrend began in August 2012, along with its fundamentals, tips it over onto the actionable list, despite it being very thin.