The Gilmo Report

May 11, 2011

May 14, 2011

This report was written by Kevin Marder for Gil Morales, who is giving a presentation at the MoneyShow in Las Vegas and unable to write this report.

Gil’s comment: “Leadership remains mixed even as the indexes are bumping up towards the highs. To me, this looks like a time when you just sit back and relax, doing very little and perhaps sitting with positions that are still acting okay. Otherwise, not a lot of fresh entries to be made here.”

 Names of note (with comments by Gil):

 “Vmware (VMW) could be working on the handle of a cup-with-hande pattern.”


“Molycorp (MCP) broke down on a weak earnings report and pulled back to the top of its prior base. I don’t like the earnings miss, and believe this could be an issue and a “tell” that rare earths’ hype is a little extended here.”


“ (AMZN) moved up through the $200 level and looks very good.”


“JDS Uniphase (JDSU) is an interesting name that had a pocket pivot four days ago as it came up through the 50-dma and rallied on earnings. It could be forming a cup base formation here. One to watch.”


Apple Inc (AAPL) continues to track sideways and hold above the 50-dma. One to watch.”


Apple Inc (AAPL) Gilmo Report Chart


“The main message should be that investors should be cautious here and not make any major commitments.”

* * *

No matter the health of the general market, it is a good idea to always keep a watch list updated in the event of a turn higher in the averages.

Some names which are beginning to show subtle signs of leadership credentials, and which should be monitored: Chipotle Mexican Grill (CMG), Valeant Pharmaceuticals (VRX), Illumina (ILMN), and Netflix (NFLX).

We would be closely watching the above, as well as Baidu (BIDU), which has seen a few distribution days in the last two weeks, and which is testing its 50-day for the second time in a week. The view here is that the stock is perhaps the most important from a liquid glamour standpoint, i.e. its behavior offers a key window into institutional sponsorship of large-capitalization growth titles, a window that is more objective than any opinion or prediction. Its ability to successfully test its 50-day is seen as a key tell.

Baidu (BIDU),  Gilmo Report Chart

Of additional critical import: the behavior of glamours that recently broke to new highs, including Netsuite (N), Polypore International (PPO), Mercadolibre (MELI), Lululemon Athletica (LULU), Ariba (ARBA), Qlik Technologies (QLIK), Acme Packet (APKT), Mako Surgical (MAKO), Polycom (PLCM), ARM Holdings (ARMH), and IPG Photonics (IPGP), among others.

In summation, as always, we will stay flexible and let the market tell its own story. In particular, we will be monitoring closely the presence of any distribution in the names listed above.

Kevin Marder

At the time of this writing, of the stocks mentioned in this report, Marder Investment Advisors Corp., or an affiliate thereof, held a position in ILMN and NFLX, though positions are subject to change at any time and without notice.

Gil Morales & Company, LLC (“GMC”), 8033 Sunset Boulevard, Suite 830, Los Angeles, California, 90046. GMC is a Registered Investment Adviser. This information is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to GMC, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Gil Morales & Company, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2008-2019 Gil Morales & Company, LLC. All rights reserved.