StockTwits 50, January 9

Posted by Ivanhoff
on January 7th, 2012

It was an atomic beginning of the year for most market sectors, led by the worst performers of 2011 – basic materials ($XLB), biotech ($IBB), and financials ($XLF). On the other side of the performance spectrum were the more defensive utilities ($XLU) and long-term treasuries ($TLT), which shined in 2011. Is this the January effect in its prime or the first attempts of a risk-on wave? How long is it going to continue is anyone’s guess. 2010 started similarly with three strong weeks.

For the week, the St50 momentum index appreciated by 0.71%, while $SPY and $QQQ gained 1.76% and 3.51% respectively. Capital continues to flow with full strength into large cap tech, with semiconductors ($MU, $MRVL, $STX) and healthcare names ($TEVA, $ESRX) leading the way.

In the meantime, there is noticeable selling pressure in many of the business software and cloud names that shined in 2011. $FIRE, $AZPN, and $RAX left the St50 this week, following the exit of $N and $TIBX last week. Many of the cloud stocks still look heavy, despite the fact that the group is probably just one acquisition away from getting back into the popularity contest.

The best performing St50 stock of the week was $FTK, which surged more than 20%. There has been a disproportionate amount of energy stocks on the 52week high list, including $EC, $AREX, $PXD, which are new additions to this week’s St50 list.

Two of the top five St50 performers of the week came from the Home Builders group ($XHB), which struggled for most of 2011, but managed to recover decisively in the later part of the year. $SCSS and $PIR broke out to new 5-year highs.

Retail stores reported comps for December. Mixed results for the industry, but discount departments stores like $ROST and $TJX continue to impress with their numbers and it is not an accident that their stocks are trading at all-time highs.

During the week $JAZZ and $QCOR – among others – provided strong outlooks for 2012, giving a boost to the whole biotech group. Top biotech performers on the St50 were $CBM, $BIIB, and $ALXN.

Despite notable divergences in the markets, there is a healthy bid for some stocks and this is all an active market participant could ask for. A low correlation market provides good opportunities for both bulls and bears. Europe is still the Pandora’s box that could ruin any party…but there is always something to worry about. The environment is never perfect and if it ever feels so, it might be time to step back and reduce exposure.

See the daily charts of the St50 stocks on finviz; also weekly charts.Take a look at the About section to gain my perspective on how to use the St50.

You can easily follow any or all of the stocks in the ST50 on StockTwits by clicking here.

Have A Great Weekend!

Ivan Hoff

St50 Jan 9 New Jan 9 Removed Jan 9

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.