WisdomTree Investments Shows Strength At 10-Week Line WETF ...

Although the market remains in an uptrend, the comfort cushion is gone for some top-rated stocks.

IBD 50 issues, such as Alaska Air (ALK) and LinkedIn (LNKD), are now trading below their 10-week moving averages.

Other leaders went for months making no contact with the 10-week line ? until recently. Biomed stock Celgene (CELG) is a prominent example.

What should be made of these developments? Two things.

First, investors should keep a close eye on the price-and-volume action of the indexes. The faltering among some leaders could remain confined to a few names, or the bad action could spread.

Second, pay attention to stocks that started to show weak action and then rebounded sharply from the 10-week line. When that rebound comes in strong volume, it points to big money scooping up shares.

WisdomTree Investments (WETF) is a good example of positive action. The stock closed more than 20% above its 10-week line on May 21.

On May 22, the stock slid 4% in 30% faster trade than usual. The next day, WisdomTree plunged 17% at the open to just under its 10-week line. But what looked like the beginnings of a vile day turned into something positive.

The stock staged a positive reversal, cutting a nearly 17% loss down to less than 3%. Volume was 207% above average. As of Tuesday, WisdomTree closed the day just 6% off its 52-week high.

The company is a pure-play ETF provider. After six years of losses, WisdomTree scored a profit of 3 cents a share in 2011 on a 57% surge in revenue. Last year, earnings grew 267% to 11 cents a share on 30% revenue growth.

The Street expects EPS to leap 245% to 38 cents a share this year. Sales are expected to jump 83%.

After-tax margin has stepped up in four of the past five quarters ? from 6.4% to 26.8%.

Source: http://news.investors.com/investing-stock-spotlight/052813-657859-stocks-showing-strong-action.htm

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