By Paul Whitfield, Investor’s Business Daily
Stocks popped higher in rising volume Tuesday, as the major indexes pushed further above their once-problematic 50-day moving averages.
The Nasdaq rose 1.5%, the S&P 500 1.15% and the Dow Jones industrial average 0.9%. Volume was up on both major exchanges.
Dow component Caterpillar (CAT) advanced for an eighth session in a row, gaining 1% in below-average volume. The stock is trying to regain its 200-day line, which crossed above the 50-day line in June.
Four stocks were up for every stock that was down on the 30-stock Dow.
Top-rated stocks were showing strong action.
Many struck new 52-week highs in strong volume. They include 3D Systems (DDD), a maker of 3D printers, which rose 6% in heavy volume; and storage software maker CommVault Systems (CVLT), which popped 3% in fast trade.
On the downside, firearms makers continued to take a pounding. Sturm Ruger (RGR) and Smith & Wesson (SWHC) fell 8% and 11%, respectively. In the wake of the Dec. 14 shootings at a school in Connecticut, California state Treasurer Bill Lockyer said he will propose that the state’s public pension funds sell off investments in firearms stocks that make firearms that are prohibited in California.
Sturm Ruger and Smith & Wesson began falling before the latest anti-gun reactions. The stocks, though, illustrate the advantages of sell rules and don’t-buy rules. Sturm Ruger had broken out of a fourth-stage base, which is too late to buy. Smith & Wesson broke out of a third-stage pattern, which also is late. Smith & Wesson triggered the 8% sell rule in the afternoon of the same day of its morning breakout.
Regardless of the reasons for the stock’s current declines, the rules offered protection.