The NASDAQ Composite gave up 1.7% this week as earnings proved disappointing in most cases, but the size of upside surprises was above the norm.


The largely disappointing earnings combined with with relatively large surprises contributed to market uncertainty and therefor higher volatility.

Nevertheless, The market uptrend continues with the NASDAQ continuing t find support when threatened at about the 50 day average level.

No New Features This Week

Use Limit Orders when Buying at Open

At 3:01 pm on Thursday we issued an alert for ClickSoftware Technologies (CKSW). CKSW was on our CWH watchlist with a breakout price of 9.72 and we issued an alert when the price was 9.75. The stock closed for the day at 9.82. If you were lucky enough to place an order before the close you were in for a massive windfall as the stock gapped up at next day's open to 12.53 on news that the company was to be acquired by Fransisco Partners for $12.65 a share.

If instead of buying on the alert, you placed a buy at open order at market then you would be surprised at the 28% premium that you would have to pay with very little upside potential to 12.65 of less than 1%.

To avoid gaps-up when an acquisition is made we recommend a limit order no more than 5% above the breakout price. We show that limit on our email alerts. Here's the alert for CKSW with the relevant prices circled.

Note that the stock closed for the day within the limit price so a buy order on receipt of the alert with a limit of 10.21 would have been executed, but an overnight order with the same limit would not have been executed as the stock opened at 12.53.





Conclusion

When acting on an alert to either place an immediate order, or to place an overnight order, place a 5% limit on the order. You will find the limit price on the alert we send.