Posted on September 17, 2008 - by andrew

Bullish chart - CNQR building strong cup pattern

Concur Technologies (CNQR) has been a bright spot during the market’s recent correction. It’s a member of the Computer Software-Enterprise group and has superior marks in Investor Business Daily’s Smart Select Ratings. CNQR is one of the growth stocks on my watch list that I’m really, really excited about!!!

Fundamental analysis for CNQR

Most of my research on CNQR was done by reading IBD and using the Smart Select Ratings that come with my IBD subscription. I highly recommend Smart Select Ratings if you want to save time while picking stocks.

Here’s a quick summary of CNQR’s fundamentals:

1. Group is ranked #35 - sticking to groups in the top 50 of IBD’s Industry Groups Rankings gives you the greatest chance of success.
2. Top-ranked stock in its group - the top 5 stocks in a group are usually the strongest
3. Stellar IBD Smart Select Ratings
4. Up/down volume is 2.1 - anything above 1 is bullish

CNQR has very attractive fundamentals. However, today’s Base Reader article in IBD said that Concur’s earnings were expected to slow down slightly in the next quarter. To me, that’s a risk worth taking given the strength of CNQR’s other fundamentals.

Technical analysis for CNQR

All of my technical analysis for CNQR was done using IBD’s Weekly and Daily Charts. By viewing its weekly chart, CNQR looks to be in the 6th week of a cup base. CNQR is showing a small -18% decline in its base. Here’s a screen shot courtesy of StockCharts.com:

1. Huge run-up in August (Point 1) on huge volume (Point 2) - this is a sign of strong demand by big investors
2. Soft decline much (Point 3) on very light volume (Point 4) - shows support by institutional investors
3. Building accumulation (Point 5) on higher volume (Point 6) - shows that investors are buying shares
4. Buy point is $49.09, or 10 cents above the high on the left side of the cup

CNQR’s chart looks great to me. It’s been rare in this correction to see a chart that does not have heavy distribution in it. This low distribution is the most attractive part about CNQR’s cup base.

Conclusion

I am extremely bullish on CNQR. Unless it sells off in heavy volume, I will definitely buy CNQR when:

1. it breaks out above its $49.09 buy point on heavy volume (+50% higher than average daily volume).
2. a new rally begins.

For right now, just be on the look out just in case CNQR shows any red flags.

More Reading

If you’re interested in learning more about how to find winning stocks and increase your chances of success, I strongly recommend subscribing to Investors Business Daily. I read IBD everyday so I know what’s going on in the market and which stocks are doing good or bad. Subscribe to Investor’s Business Daily Digital Edition – Get 4 Bonus Weeks!