New Buy:(MPWR)

(MPWR) came up on what has been my best screen last night, and it really has most of what I look for. Earnings and Sales growth decelerated in the recent quarter, but beat estimates and were good enough for the stock to breakout yesterday on volume almost four times average. The stock cleared a first stage cup base on base buy point of $27.60 to close yesterday at $29.91.

Estimates call for earnings to grow 44% this year and 30% next year - just the kind of growth I look for. All the other fundamentals are solid and the group strength is good.

What concerns me a bit more is the general market. The currently rally is not strong. I decided that I like (MPWR) enough to take a chance on it, but I wanted to see what the overall market looked like today - I'm skeptical and cautious.

Initially (MPWR) shot up but throughout the day it pulled back with the overall market. On a positive note it held the buy point most of the day and closed above it. My concern was that I didn't want to make a new buy into a distribution day, which would've been the third in three weeks for the NYSE indices. Midday the market was headed for just that - down on higher volume than the prior day.

(MPWR)'s pullback looked like a healthy break from the prior day's move on much lower volume, so I decided to pick some up at $27.64 with a tight stop of 3%, and just close out the position around 3:30pm if the market was on track for a distribution day. The afternoon came and as the market continued to drop volume dried up, so I held my position.

I still have the tight stop in place and I moved my stop up on (THOR). Many breakouts have been failing and I don't think this is a market to give stocks much room in. If they work, great - otherwise I get out.

-Geoff