Amgen (AMGN) staged an impressive breakout two weeks ago, overcoming resistance at $61.80, line a. The major 61.8% Fibonacci retracement resistance is at $72 with the 2005 highs at $86.92.

• Relative performance broke through its downtrend, line b, in May
• The RS line is now in a clear uptrend, line c, with higher highs and higher lows
• Weekly OBV has confirmed the price action, surging through resistance (line d) in early 2010
• There is good support now in the $61-$62.20 area, with further support at $58

Apollo Group (APOL) is a $7.1 billion education and training services company. It closed strongly last week, as the resistance going back to September 2010 (line f) was overcome.

• The 50% Fibonacci retracement resistance from the 2009 high of $90 is at $61.74, with the 61.8% resistance at $68.34
• The two-and-a-half-year downtrend in the RS line was broken in May and has moved further above its rising weighted moving average in the past few weeks
• Volume increased last week, and the weekly OBV is above its weighted moving average but still below its long-term downtrend, line h
• The uptrend in the weekly OBV, line i, suggests accumulation
• There is first support at $54.40, and then at $51.80-$52.20

What It Means: Even though the Nasdaq 100 is still well below the 2011 highs at 2,438, last week’s positive action versus the S&P 500 could be forecasting a good earnings season for the stocks in this index.

Comparing the raw performance data of stocks versus a major average is another way to identify the market-leading stocks.

Three of the four stocks mentioned today have just completed bullish weekly chart formations. Therefore, even though they are currently close to their Starc+ bands, new longs would be favored on a pullback, which should come before the end of January.  Options traders could also look to establish bullish option position on such a pullback.

How to Profit: Those who are currently long Ross Stores might consider hedging part of their position on a move to the $51.50-$52.50 area to lock in some profits.

For Amgen, go 50% long at $62.04 and 50% long at $61.12, with a stop at $58.84 (risk of 7.7%).

For Apollo Group, go 50% long at $62.04 and 50% long at $61.12, with a stop at $58.84 (risk of 7.7%).

From my Sept. 19 recommendation, buyers should be long Microsoft at $25.78, with a stop at $23.42. In December, I again recommended buying at $25.78. On these positions, use a stop at $25.32. I will be looking for another entry point on the first pullback.