Once again we had a very good week on the leadership list, and we are starting to see some leadership in the market emerge finally. Out of the 11 stocks on the list, only one had a decline for the week, and that was quite small.
MELI was the biggest gainer, and broke out of a trading range yesterday. The volume on this has been dropping for the last couple of months, but did rise a bit going into yesterday. Last Friday (blue arrow) it was right about in the migddle of the trading range and really did not show any signs it was going to be moving up. I am not sure that yesterday's move constitutes a real breakout, as the volume, while higher than what is has been lately, was still relatively low. The price relative line is weak as well.
BWLD was the second biggest gainer, and also hit a new high and almost broke out. This has a painfully weak price relative line. In the last 6 months it has had 4 big drops, so for right now I would wait for a drop as an entry point, selling it as it approaches resistance. Last Friday was, in hindsight, about the best entry point you could get.
AGP was the only decliner. This is in a consolidation phase after a prior breakout. Whether this will lead to another move up or to a base building phase is unknown right now, but with a declining price relative line, I would guess the latter. I would be prepared, though, in case the first case materializes.
CMG was the smallest gainer, qualifying it as the second biggest "decliner". This got hit on earnings this week and still managed a gain for the week. The trouble with this is it did have a classic breakout from the base it was in, instead creeping quite a bit higher. The earnings hit did not last long; it dropped Thursday and came back yesterday to hit a new high. This one has the advantage of already reporting this quarter, so it is safe to get into from that perspective. Whether it is extended here or not depends a lot on how you interpret the chart; I have it hitting resistance right about here, and if it pulls back from that resistance I may be a buyer. The price relative line is one of the stronger ones among the leaders, so I do not expect this to collapse, but is is likely a late stage base, so I'm not looking for huge gains here.
