STOCKS

It is always prudent to take a step back, objectively assess, and tweak your portfolio—especially after a strong and sustained run-up, and that’s exactly what MoneyShow’s Tom Aspray does now.

The overseas markets set the tone for the opening of the US equity markets shattering the calm, and basically optimistic view, from last Friday’s close. Of course, the horrible events in Boston created more fear in the market as the selling increased into the market’s close.

The dramatic losses in gold and silver last week were indeed A Triple Alert For Stocks as the US equity markets were indeed vulnerable. Monday’s decline, in my opinion, is likely part of a top-building process, and I would not expect prices to accelerate to the downside over the near term.

The S&P futures are showing nice gains in early trading and if the major averages can close higher Tuesday, we could see a pretty strong rebound in the S&P and Dow. On a lower close, we could get another day or more of selling before we get a two-three day rally. The iShares Dow Jones Transportation (IYT) and iShares Russell 2000 Index (IWM) were especially weak Monday, confirming the bearish setups I discussed last Thursday.

Though quite a few of the positions in the Charts in Play portfolio have been either sold or stopped out , now is the time to be managing your existing positions. In today’s column, I wanted to update the portfolio and focus on two recommendations that have worked out as I had expected and two that did not.

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Chart Analysis: Automatic Data Processing (ADP) hit a low $54.02 last November, and I recommended it on November 27, which was filled the following day at $55.44.

  • The sharp setback in late December held well above our stop.

  • I recommended taking profits on half the position at $61.42, which was filled on February 19 (see arrow).

  • ADP hit a high last week of $66.21 and dropped sharply Monday closing just above the uptrend at $64.

  • There is further support at $63.30 with the quarterly pivot at $62.54 while the 38.2% Fibonacci support from the recent highs is at $61.50.

  • The relative performance is still holding above its WMA and did confirm the recent highs.

  • The on-balance volume (OBV) just retested its March highs, line c, last week and has dropped below its WMA.

  • The weekly studies (not shown) are positive.

Kansas City Southern (KSU) was recommended in early January at $85.18 and hit a high on March 28 of $112.25.

  • My initial upside targets were in the $95-97 area and half was sold at $95.54 on February 5.

  • Given the impressive nature of the rally and the closeness to the weekly starc+ band I recommended selling half the remaining position at $108.78.

  • The daily relative performance broke through resistance, line f, in early 2013, which was a bullish sign.

  • The RS line has been below its WMA since April 1 and has just broken its uptrend, line g.

  • The daily OBV did not confirm the recent highs, line h.

  • The OBV has also broken its uptrend, line i, and is below its WMA.

  • The quarterly pivot at $101.86 is now being tested with further support at $100.

NEXT PAGE: 2 Stocks That Didn’t Work Out

Tickers Mentioned: Tickers: ADP, KSU, MUR, XLB, IYT