Stocks Add To Recent Gains; Nasdaq Retakes 50-Day Line

Stocks advanced in quiet volume Friday, as the Nasdaq closed above its 50-day line for the first time since late September. The Nasdaq and the S&P 500 rose 0.7% each. The IBD 50 led with a 1.2% gain. Volume fell across the board. The Nasdaq retook its 50-day moving average, but further testing is likely. The S&P 500 remains just under its 50-day line. Meanwhile, top-rated stocks continue …

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Stock Funds Rally, Led By Large-Cap Growth

Strong rallies extinguished the losing streaks of four weeks for U.S. stock mutual funds and six weeks for world equity funds.
U.S. stock funds’ 4.06% gain was enough to hoist them into positive territory for the year: 2%.
But world equity remained …

Will Epam Systems Engineer A Successful Breakout?

IBD Stock Analysis – Epam Systems

IBD Stock Analysis – Epam Systems

Will Epam Systems engineer a successful breakout?


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Epam Systems is a software engineering and IT services firm that competes with outsourcing companies in China and India.

While it’s headquartered in Pennsylvania, the bulk of its workforce is in Central and Eastern Europe.

As noted in IBD’s IPO Analysis on Oct. 9, Epam (NYSE:EPAM) has been pursuing a growth-through-acquisition strategy, including its June purchase of GGA Software Services, which helped expand its health care and life sciences services.

Key Fundamentals

The strategy appears to be working. Epam has delivered eight quarters of steady revenue gains, ranging from 26% to 32%.

Earnings growth has also picked up over the last three quarters, coming in between 30% and 34%.

The company is scheduled to report Q3 numbers on Nov. 3.

For the full year, analysts expect EPS to rise 25%, followed by a 15% gain in 2015. Estimates for both years were recently revised higher.

Overall, Epam earns a 99 Composite Rating and an A- Accumulation/Distribution Rating.

Chart Analysis

Epam stock sold off sharply in March in response to Russia-Ukraine tensions. Investors got spooked because the bulk of Epam’s workforce is in that region.

But the stock recovered and by May was closing in on a new buy point. However, it failed to break out and ended up forming a handle, which eventually turned into a new base.

Epam has now formed a cup-with-handle, which is still considered a first-stage pattern.

The stock broke past the 44.46 buy point Thursday on volume about double its average. The buying range is up to 46.68, or 5% above the buy point. As of Friday’s close, Epam was still trading near the buy point.

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Alliance Data Helps Connect Brands And Consumers

dsRetailers looking for bigger profits aim to add new customers and increase the loyalty of their existing customers. Alliance Data Systems (NYSE:ADS) uses data captured from customer interactions to help companies do just that.
The Plano, Texas-bas…

IBD 50: Apple Pay, iPhones Fuel Product Lineup

New versions of the iPhone and the launch of an electronic payment system have given Apple new ways to extend a long and successful line of products.
Apple Pay started last week, although it works only on the newest iPhone models.
But those new phon…

IBD 50 Stocks Regain Buy Points

The IBD 50 has been the land of the second chance, as many stocks have rebounded from sell signals.

In several cases, stocks triggered the 8% sell rule or hit another sell signal. Yet a lot of them have rallied back and reclaimed their buy points. Today, they are acting as if there was never a sell signal on their charts.

How should investors handle these situations? Were the sell signals wrong? Is there higher risk with these second-chance entries?

First, never ignore a clear sell signal. Cutting losses short is essential and more often than not the best decision. You never know how far a stock will fall. And who knows, if the Fed’s James Bullard hadn’t suggested extending QE3, maybe the market might still be falling.

It’s unusual to see so many stocks win back their buy points so soon after they tank.

But provided that there are no new issues with the company’s fundamentals, its fund sponsorship and its markets, investors can consider buying the stock again.

Be sure to wait until shares are back above the proper buy point. It’s best if volume is well above average when that moment happens.

Celgene (NASDAQ:CELG) provides a good example of how a stock should look when it re-enters a buy area.

The stock plunged as much as 7.5% from a 90.60 buy point on Oct. 15 — certainly a loss that would shake out reasonable shareholders. The stock’s drop below the 10-week moving average was another worry.

But just as the biotech touched its 40-week moving average, shares started rebounding. Celgene was back above the 90.60 entry last Monday.

Volume that day was nearly 80% more than average. Strong upside volume as the rebound continued was proof that institutional investors weren’t going to miss Celgene’s ride to new highs. The stock is now about 15% above the buy point.

Interestingly, volume last Monday far outweighed the volume on Celgene’s original breakout Aug. 18.

Celgene met resistance around 96 in September and part of October, but there was no clear base in that consolidation.

For the week, the IBD 50 jumped 6.3%, its best week of the year so far as the list’s medicals led.

Akorn (NASDAQ:AKRX) surged 19%, Alexion Pharmaceuticals (NASDAQ:ALXN) 16% and Celgene 17%. The IBD 50 topped the Nasdaq’s 5.3% rally and the S&P 500′s 4.1% gain.

Social Security Benefits: When To Start Them

When should you start taking your Social Security benefits?

Timing matters.

You can start as early as age 62. But waiting can boost the amount you receive over the rest of your life in retirement.

“For every year that you wait, you get about 8% a year more up to age 70,” said Judith Ward, a senior financial planner for T. Rowe Price.

Someone earning $100,000 a year who starts to collect at age 62 would get $21,879 in 2014, according to the T. Rowe Price online calculator. That bumps to $29,172 a year if he starts at age 66. It peaks at $38,507 if he does not start until age 70.

You can use online calculators to help you crunch numbers and compare different starting dates.

Understanding the pros and cons of each major scenario will help you decide which route to take.

Starting early may still be your best bet if your life expectancy is short or you must have the income.

“Generally it does not make sense to start early, but there’s no one-size-fits-all answer,” said Elena Voronina, a financial planner for STA Wealth Management in Houston.

The first thing to understand is Social Security jargon.

Full retirement age (FRA) does not refer to the age at which your benefits peak in size. If you were born between 1943 and 1954, for instance, your FRA is age 66. That’s the age bracket for the person in the T. Rowe Price example above. His benefit at age 70 is higher than his benefit at age 66.

Full Retirement Age

What FRA does refer to is the age at which your benefits will not be cut even if your earned income from work exceeds a limit specified by law. In 2014, you generally lose $1 in benefits for every $2 you earn above $15,480.

Some types of income — such as interest, dividends, pensions and annuities — are exempt from that penalty.

One of the most appealing strategies is the spousal benefit. This approach is designed to help someone who did not work or whose spouse has a much higher earnings history.

This can work several ways. The most effective approach is this:

When the higher earning spouse reaches FRA, he files to begin benefits but immediately suspends his claim before receiving any checks.

This spouse will delay the real start of benefits as long as possible, perhaps until age 70. By doing that, his benefits get bigger.

Meanwhile, when the lower earning spouse reaches FRA, she files for spousal benefits.

Check The Right Box

She must make sure that she specifies that she is filing for spousal benefits and not her own benefits. “This strategy maximizes lifetime benefits, not necessarily your monthly benefits,” says AARP.

When both spouses turn 70, they can file for their own retirement benefits. This two-step process maximizes the monthly benefit for the couple.

Why does this work? The spousal benefit is 50% of the higher earning spouse’s benefit.

“This strategy is for couples where one spouse’s benefit is less than 50% of the other spouse’s,” Ward said.

If the lower earning spouse’s own benefit is more than 50% of her spouses, there’s no point to the strategy.

If the lower earning spouse acts before FRA, her benefits can be permanently cut.

Corn, Soybeans Fall On Forecast For Dry Weather

Corn futures fell from a seven-week high Friday and soybeans dropped on speculation that favorable weather will boost harvests forecast to be the biggest ever in the U.S., the world’s top producer of the crops. Wheat declined.
The Corn Belt will hav…

New High Analysis: Health Care Names Lead The Way

Major averages ended the week on solid footing Friday, extending gains after the Nasdaq and S&P 500 confirmed a new uptrend on Oct. 21. Health care names dominated the new-high list again, a common theme in recent days. Edwards Lifesciences (EW) gapped up to an all-time high, rising 11.57 to 116.76. Strong earnings late Thursday were the catalyst. Third-quarter profit rose 14% to 80 cents a …

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Avago Finds Resistance As Potential Base Forms

Avago Technologies is meeting resistance at its 10-week moving average as a potential base forms.
The stock corrected just over 24% from its Sept. 19 peak of 90.88. That’s its deepest correction in more than two years. Chip stocks such as Avago (NAS…