STOCK LEADERSHIP
KAUFMAN & BROAD BIG WINNER FOR WEEK... Reflecting continuing strength in homebuilding stocks, Kaufman and Broad was the top percentage gainer in the S&P 500 over the past week. The stock surged through overhead resistance this week on heavy volume. Although the stock uptrend still looks strong, it also looks overextended. The May plunge in long-term rates probably contributed to the surge in the homebuilders.
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DOLLAR GENERAL... Dollar General was another big gainer this week. The daily chart shows DG surging to a ten-month high on rising volume. Its RSI line, however, is over 70 -- which reflects a short-term overbought condition. The major trend, however, looks strong. DG has just broken a down trendline extending back two years. Its weekly MACD lines are positive. The next upside objective is 20.
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BROADCOM BREAKS OUT... Broadcom was one of the week's top technology gainers. The chart also looks good. The stock broke through resistance at 20 and is trading at a the highest level in a year. The 10-week week moving average has also crossed over the 40-week line, which is a positive sign. Its relative strength line has also broken out. That puts it in a leadership position.
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NOVELLUS SURGES ON VOLUME... Reflecting strength in the semiconductor group, Novellus surged this week on strong volume. Its next test will be the January high near 36. The weekly chart also looks impressive. It shows a pattern of "rising bottoms" since last October. That increases the odds for a challenge of the early December high near 38. The weekly MACD lines are positive.
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VERITAS TURNS UP... Veritas Software was also a big percentage gainers in the tech sector. Its weekly chart shows the stock rising to the highest level since last May. It's moving average lines have turned up as well. The rising relative strength line also shows market leadership.
MORE LATER.
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