What a week so far and there's still one more day to go. As we head into the weekend the market looks to have bounced. A solid day on Friday will confirm the recovery and those who never looked at their accounts will wonder what all the fuss was about.
As markets get back toward last week's levels, there are some winners as well as a few stocks looking to take leadership. In my analysis I've been working with a proprietary scan for upside trades and it had been giving great results until the bottom fell out. With the fall the scan had dropped two names that were both disqualified for being involved in merger talks. But with Thursday’s bounce, one that had been on the list for a while suddenly reappeared on the list.
Post Holdings (NYSE:POST), makers of Raisin Bran and Honey Bunches of Oats Cereal, among other things, sounds kind of boring but the stock price has been anything but that. The chart above shows the stock's price break above resistance in June before it went on to hover in a tight consolidation. That ended in the beginning of August as it jumped and started to move higher.
Reaching 66.25, it started to pullback as the market stalled and reversed. But the pullback didn't even get below the 20-day SMA before bouncing on Thursday. That reversal sets up a target of 75.75 -- which puts it's back on the scan list. Now it's turning back higher. The momentum indicators are turning, with the RSI moving back higher and the MACD stopping the decline. And it now has a natural stop loss level near the 20-day SMA and lows from the pullback this week.
Time to buy some cereal.