Barren and Lonely

It’s a bleak scene for the Growth Stock landscape.

All of the major indexes are trending below their 50 and 200-day SMA’s with a clear predominance of distribution. Very few, if any, candidates for upside leadership to be found.

Very little in the way of  rallies as lack of institutional follow through buying from last month’s lows promotes an environment of  caution. We’ll stay a Bear as long as this remains the case. Riskier appetites might consider shorting.

Potential wind changes could come  with third quarter earnings season, which could trigger heavier selling as well as a rally. A retest of lows might create capitulation to wash out weak hands and drain selling pressure. Perhaps, perhaps.

The Screen:

Only one company qualified for the strict earnings and technical criteria we scan for. And that alone pretty much zaps our appetite for buying quality earnings growers. It’s enough to starve a breakout bull.

This week’s screen produced only Walker & Dunlop Inc., WD, a Maryland-based commercial real estate lender.


Chart is good: increased volume flow, accumulation up the right side of the base. However, that gap below 25 should be concerning, as most small gaps like that tend to get filled – at some point.

Strong fundamentals look good short term:

  • Quarterly Sales Growth of 34%, three years of increased sales.
  • Quarterly Earnings Growth of 56%, three years of increased earnings.
  • ROE of 17%

Risky money sets up prior to breakout.