March 2008 Archives
Vytorin problems for Merck (MRK) and Schering Plough (SGP)
We looked at a few stocks that have been in the news recently -- and a few big Pharmas stood out as recent Sells.

Then this morning, we noticed that Merck (MRK) and Schering Plough (SGP) had a problem with their two widely prescribed cholesterol-lowering drug, Vytorin and Zetia.
The stocks are down 17% and 27% today on the news was released.

But you didn't have to wait for the announcement to exit these -- they have been poorly ranked for quite some time in our system -- based on Friday's close, Merck was 39 and Schering Plough was a 17 out of 100.

Here are the 6 month charts, with Buy / Sell signals:

Short Squeeze Candidates
Last week, we added to our list of potential short squeeze candidates: Valance Technology (VLNC),  Old National Bancorp (ONB), Community Bank System (CBU), Lindsay Manufacturing (LNN), and Priceline (PCLN).

Some of these showed up on our breakout previously. Add potential short squeezes, and you have good list of tradable names:


Sell Signal: Bear Stearns (BSC)
Fusion IQ Rank has been consistently negative on Bear Stearns over the past 6 months.

The most recent sell signal was on Friday, and since then the stock has gotten whacked:

FusionIQ Market Metrics

As the chart below shows, the number of low ranked stocks (0-40) is increasing, while number of highly ranked stocks (70-100) are falling.

Over the past 90 days, the number of low ranked stocks increased 16%. During the same time period, the top third of stocks (70-100) decreased by 39%.

While at some point this will suggest a wash out condition at present it still suggests a bearish or cautionary view is warranted until these metrics improve.

Fusion IQ Podcast

I had a lot of fun discussing FusionIQ with Andy Horowitz of the Disciplined Investor. If you are looking for a broader explanation of what Fusion does, this is a good overview.



icon for podpress   (click to play)

TDI Episode 46: The Premiere of FusionIQ [41:57m]:



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