Most of my watchlist is either extended or still basing.

 

Now I want to follow that notion of buying at least a small position in a nascent rally just to get something on the board.  So here we go...

 

Two interesting stocks came to my screens: EQM and WETF.

 

EQM

Looking right at the charts EQM looks so tempting due to the multiple up weeks, very tight action throughout (since IPO!), nice RS line, good YTD gain (60ish), but it is quite illiquid at 107kshares.

 

Fundamentally, you can't really go wrong, growth is continuing and well above levels, including sales. They own stakes in transmission, storage and gathering of natural gas.

 

As well even though RS is 94 and rising, A/D is D+ indicating short term selling, and U/D (more long-term) is mediocre at 1.1. Group RS is < 80 meaning it's not in top 40 performing groups. I'm trying to focus on high ranking groups to minimize risk.

 

EQM is rebounding off the 10 week and in buying range with very nice volume on the daily!

 

 

WETF

 

Wisdomtree is another fundamentally strong stock that runs a catalog of ETFs. Sales and earnings seem even higher. I calculated ROE to be 20% in 2012, as it is not indicated in Marketsmith, but it shows 18% for 2011. It's up about 100% this year.

 

The number of funds owning the stock is increasing substantially, A/D is B- and U/D is 1.3. These numbers are way better than EQM so far. RS line is similar to EQM and group RS is stronger, too.

 

The chart looks not as civil as EQM but the liquidity makes me more comfortable. It never broke the 10 week on the ascent to the pull back which starts with a crazy flash crash type event before pulling back in a more orderly fashion. It continues to find support, although the weeks are always ending red.

 

WETF is in buying range, or basing at this point (4th down week), it's a coin toss right now. But it is showing 10 week support.

 

Conclusion

WETF wins this battle of the pullbacks for me, although I'm concerned of the lack of choice right now, but it could just be a quiet Friday. Or is this another June of gloom