Below are Earnings Surprises since Jan 1, 2011 that were up 8% or greater on the day of earnings. You can take this list and drop it into Telechart. Sort by 5 day rate of change and look for stocks that have pulled back after their initial post earnings rally.

See the Earnings Thrust post from earlier this week on what a pullback would look like: http://patientfisherman.blogspot.com/2011/02/how-to-manage-earnings-thrust.html

Symbol	Description	Date	%Surprise	%Chg Earnings Day
RHB	REHABCARE GROUP INC COM	2/8/2011	8	45.47
TDSC	3-D SYS CORP DEL COM NEW	2/17/2011	35	40.43
TBL	TIMBERLAND CO CL A	2/17/2011	61	30.03
KND	KINDRED HEALTHCARE INC COM	2/8/2011	23	28.34
ABMD	ABIOMED INC COM	2/3/2011	78	21.64
REV	REVLON INC CL A NEW	2/17/2011	196	21.45
ELOS	SYNERON MEDICAL LTD ORD SHS	2/16/2011	700	20.72
SCHS	SCHOOL SPECIALTY INC COM	2/17/2011	7	19.87
CRUS	CIRRUS LOGIC INC COM	1/27/2011	3	18.81
ACAT	ARCTIC CAT INC COM	1/27/2011	257	17.57
KNL	KNOLL INC COM NEW	2/4/2011	18	16.7
PJC	PIPER JAFFRAY COS COM	1/26/2011	102	16.28
RBN	ROBBINS & MYERS INC COM	1/7/2011	33	15.9
IMN	IMATION CORP COM	2/1/2011	633	15.05
GT	GOODYEAR TIRE & RUBR CO COM	2/10/2011	300	14.31
EL	LAUDER ESTEE COS INC CL A	2/3/2011	18	14.13
SSYS	STRATASYS INC COM	2/9/2011	24	13.8
SBH	SALLY BEAUTY HLDGS INC COM	2/3/2011	16	13.78
LQDT	LIQUIDITY SERVICES INC COM	2/3/2011	70	13.31
LXK	LEXMARK INTL NEW CL A	2/1/2011	15	13.23
MSTR	MICROSTRATEGY INC CL A NEW	1/26/2011	72	12.91
FCFS	FIRST CASH FINL SVCS INC COM	1/26/2011	9	12.64
PIKE	PIKE ELEC CORP COM	2/8/2011	400	12.53
AET	AETNA INC NEW COM	2/4/2011	2	12.47
DEST	DESTINATION MATERNITY CORP C	1/27/2011	19	12.24
HAR	HARMAN INTL INDS INC COM	2/3/2011	52	12.16
ARGN	AMERIGON INC COM	2/17/2011	50	11.73
ENTG	ENTEGRIS INC COM	2/1/2011	21	11.5
AN	AUTONATION INC COM	2/3/2011	29	11.33
CAB	CABELAS INC COM	2/17/2011	9	11.31
EAT	BRINKER INTL INC COM	1/25/2011	19	11.3
NOR	NORANDA ALUM HLDG CORP COM	2/16/2011	25	11.02
ESI	ITT EDUCATIONAL SERVICES INC	1/20/2011	1	10.74
SBGI	SINCLAIR BROADCAST GROUP INC	2/9/2011	3	10.45
SIRO	SIRONA DENTAL SYSTEMS INC CO	2/4/2011	19	10.45
AVID	AVID TECHNOLOGY INC COM	2/4/2011	362	10.1
CFX	COLFAX CORP COM	2/15/2011	18	10.05
FLWS	1 800 FLOWERS COM CL A	1/27/2011	24	9.8
HP	HELMERICH & PAYNE INC COM	1/27/2011	15	9.52
STEL	STELLARONE CORP COM	1/26/2011	11	9.51
AMSC	AMERICAN SUPERCONDUCTOR CORP	2/1/2011	21	9.5
BCO	BRINKS CO COM	2/3/2011	49	9.11
EVR	EVERCORE PARTNERS INC CLASS	2/2/2011	13	8.87
ROK	ROCKWELL AUTOMATION INC COM	1/26/2011	18	8.86
SF	STIFEL FINL CORP COM	2/15/2011	31	8.66
HS	HEALTHSPRING INC COM	2/18/2011	14	8.62
GNTX	GENTEX CORP COM	1/27/2011	4	8.48
SWK	STANLEY BLACK & DECKER INC C	1/27/2011	14	8.47
NVMI	NOVA MEASURING INSTRUMENTS L	2/15/2011	8	8.43
ARMH	ARM HLDGS PLC SPONSORED ADR	2/1/2011	40	8.35
RL	POLO RALPH LAUREN CORP CL A	2/9/2011	33	8.28
PTRY	PANTRY INC COM	2/8/2011	24	8.19
HOG	HARLEY DAVIDSON INC COM	1/25/2011	40	8.06
ORB	ORBITAL SCIENCES CORP COM	2/17/2011	57	8.01
CY	CYPRESS SEMICONDUCTOR CORP C	1/27/2011	4	7.99

Momentum is the ability of a stock to outperform against other stocks. It is a result of an expectation by market participants of a higher valuation of any given stock or group of stocks. This expectation can be valid or not valid (irrational exuberance). As momentum traders, we do not look at things like P/E ratios, we focus on whether a stock has momentum and if that momentum will continue.

Past research has proven that momentum does exist in the market. Refer to my research page located at: http://patientfisherman.blogspot.com/2010/09/research-papers-momentum.html

You can also read several books to get a thorough understanding on momentum and its inner workings:

• How To Make Money in Stocks - William O’Neil
• Smarter Investing in Any Economy - Michael Carr
• Beat The Market - Invest By Knowing What Stocks to Buy and What Stocks To Sell - Charles Kirpatrick

Momentum can occur as a result of superior earnings, new sales agreements, supply shortages, earnings guidance, regulatory changes and any other event that can lead to the possiblity of increased earnings on any stock or group of stocks.

The Key to trading momentum, is to believe that momentum exists and stocks or group of stocks can outperform all others during certain time frames. We buy high and sell higher.

Momentum can occur on any time frame, 5 days, 1 month, 6 months or a year. Using Bluefin, we try to take advantage of momentum movements by focusing on groups of stocks with momentum, known as sectors.

Basically, we are looking for a relative strength calculation which measures the performance of price from today to some point in the past. You can then take this value and rank it against a set of stocks to find out which stocks outperform across the group.

In its most basic form relative strength can be calculated by
Price Today - Price X Months ago / Price X Months ago * 100

If you wanted calculations across multiple time frames in Telechart it would look like this:
100*(c-c21)/c21 for 1 month
100*(c-c126)/c126 for 6 month
100*(c-c252)/c252 for 12 month

In Bluefin, we use the MDT calculation created by Pradeep Bonde over at StockBee. We apply this formula to all stocks and sectors and then rank those stocks and sectors on various conditions to generate our Emerging 50 and Sector 50 watch lists.

By using momentum calcuations in Bluefin, we can keep our money in the best performing stocks, significantly outperforming the market indexes.

In the next article about momentum, I will walk you through setting up the relative strength calculations in Telechart and then cover some recent examples of momentum trades found in Bluefin.

Recently, over at the Stockbee site we had a discussion concerning people jumping from one method to the next. Stockbee published some findings on a Kirk Report study, which you can read: 3 Things you can learn from Charles Kirk

This piqued my curiosity so I decided to look back over the past 30 days (give or take a week or so on some stocks) and find every breakout that occurred using the StockBee MDT Break out. Whether you use an exhaustion method, trend based or N-Day Breakout entry signal, many of these would of appeared in your scan.

Hindsight is 20/20, so I attempted to find stocks that offered a reasonable buy opportunity. I reviewed over 2000 stocks with our standard liquidity filter applied: MINV3.1 > 1000. They were absent of heavy volume selling days prior to the breakout. All stocks were within 10% of their 6 month high. I've also left the time-frame at 6 months so you can get more perspective on the entire move. With that said, there are still a few ugly ducklings in the result set.

So, what's the point? Did you catch 20% of these? How about 80% of the "Mona Lisas". These are the stocks with a chart pattern that is such a work of art, you wonder how you could of possibly missed it? If you did not catch them, then why are you looking at other breakout signals? Why haven't you committed to mastering one? I'm right there with you if missed some of those perfect setups. I keeping asking myself "How did I miss that one?!".

American Oil & Gas Inc. AEZ


Akamai Technologies, Inc. AKAM


Align Technology, Inc. ALGN


Autoliv Inc. ALV


Amazon.com, Inc. AMZN


Aruba Networks, Inc. ARUN


Atmel Corporation ATML


Baidu.com, Inc. (ADR) BIDU


Biovail Corporation (USA) BVF


BorgWarner Inc. BWA


Casey's General Stores, Inc. CASY


Caterpillar Inc. CAT


Coeur d'Alene Mines Corporation CDE


Chipotle Mexican Grill, Inc. CMG


Cummins Inc. CMI


CNH Global N.V. (ADR) CNH


The Cooper Companies, Inc. COO


Corn Products International, Inc. CPO


salesforce.com, inc. CRM


CTC Media, Inc. CTCM


Citrix Systems, Inc. CTXS


Cytec Industries Inc. CYT


Daktronics, Inc. DAKT


Deere & Company DE


Dollar Tree, Inc. DLTR


DemandTec, Inc. DMAN


Digital River, Inc. DRIV


Ebix, Inc. EBIX


Ecopetrol S.A. (ADR) EC


EXACT Sciences Corporation EXAS


Expedia, Inc. EXPE


Sourcefire, Inc. FIRE


Ferro Corporation FOE


Fossil, Inc. FOSL


Five Star Quality Care, Inc. FVE


Grupo Financiero Galicia S.A. (ADR) GGAL


Green Mountain Coffee Roasters Inc. GMCR


General Communication, Inc. GNCMA


The Hain Celestial Group, Inc. HAIN


Craft Brewers Alliance, Inc. HOOK


HealthSpring, Inc HS


Homex Development Corp. (ADR) HXM


ICICI Bank Limited (ADR) IBN


Infinera Corp. INFN


Infosys Technologies Limited (ADR) INFY


Isilon Systems, Inc. ISLN


Ivanhoe Mines Ltd. (USA) IVN


JA Solar Holdings Co., Ltd. (ADR) JASO


51job, Inc. (ADR) JOBS


Joy Global Inc. JOYG


LogMeIn, Inc. LOGM


Lubrizol Corporation LZ


Minefinders Corp. Ltd. (USA) MFN


MIPS Technologies, Inc. MIPS


The Mosaic Company MOS


Netflix, Inc. NFLX


Nelnet, Inc. NNI


Newpark Resources, Inc. NR


NetApp Inc. NTAP


NxStage Medical, Inc. NXTM


Netezza Corporation NZ


OSI Systems, Inc. OSIS


Pan American Silver Corp. (USA) PAAS


VeriFone Systems, Inc. PAY


priceline.com Incorporated PCLN


Penn Virginia Resource Partners L P PVR


Rackspace Hosting, Inc. RAX


Radware Ltd. RDWR


RPC, Inc. RES


Cohen & Steers Quality Income Realty Inc RQI


Riverbed Technology, Inc. RVBD


Banco Santander-Chile (ADR) SAN


Sally Beauty Holdings, Inc. SBH


Sycamore Networks, Inc. SCMR


COMSCORE, Inc. SCOR


SINA Corporation (USA) SINA


Silver Wheaton Corp. (USA) SLW


Sohu.com Inc. SOHU


ReneSola Ltd. (ADR) SOL


Spreadtrum Communications, Inc. SPRD


Sociedad Quimica y Minera (ADR) SQM


Savient Pharmaceuticals, Inc. SVNT


SAVVIS, Inc. SVVS


Skyworks Solutions, Inc. SWKS


TransGlobe Energy Corporation (USA) TGA


Turkcell Iletisim Hizmetleri A.S. (ADR) TKC


The Timken Company TKR


Terremark Worldwide, Inc. TMRK


Tanzanian Royalty Exploration Corp. (US) TRE


Tata Motors Limited (ADR) TTM


Travelzoo Inc. TZOO


ValueClick, Inc. VCLK


VirnetX Holding Corporation VHC


VMware, Inc. VMW


WABCO Holdings Inc. WBC


Warner Chilcott Plc WCRX


Xyratex Ltd. XRTX


Ixia XXIA