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Dow Win Streak Continues, Transports Lead

John Darsie

The Dow extended its win streak to nine days with another small gain Wednesday, closing once again at a new all-time high. There hasn't been a great deal of momentum during this record-setting run for the blue chip index, but the 2013 rally grinds on. If you subscribe to Dow Theory, the action has been particularly bullish--the Transports continue to lead the way higher. The Transports ETF (IYT) finished the day up 1.53%, and 19 of 20 components in the Dow Transportation Index finished with gains.

While the indices continue to slowly melt higher, there continues to be great selective action for traders. We like to see strong stocks break out, form upper level bases and then extend higher, and we have seen several stocks perform in that manner over the past few weeks.

In a conversation about strong stocks, you have to start with LinkedIn (LNKD). The stock has been irrepressible since earnings, hardly pulling back at all on its way to a nearly 50% gain. Over the last two weeks LNKD has put in a nice upper level base to digest its recent strength, and today the stock ignited to new all-time highs once again, finishing up 1.86%. Right here it's hard to initiate new longs, but if upper level bases continue to form, this stock will continue to be on traders' radars.

Netflix (NFLX) is not making new all-time highs, but is more of a story of redemption. And who doesn't love a good comeback story. NFLX saw a precipitous fall from grace after topping out around $300 in 2011, losing more than 80% of its value in just over a year's time. A monster earnings report in January ignited a huge overnight move that has continued, and the good news just keeps on coming. Today the stock broke higher out of an upper level consolidation, surging to a 5.60% gain thanks to news of an integration with Facebook's platform. Thanks to the heavy short interest still present in NFLX, you could see it challenge recent pivot highs above $197.

Research in Motion (BBRY) is another stock that saw a steep fall from its peak, and is fighting to regain former glory. The release of the new BlackBerry 10, and a new symbol for the company's stock, has helped stoke the embers of what was once thought to be a dying company. An hour before the closing bell today, news that a major buyer had placed orders for 1 million BlackBerry phones helped push the stock sharply higher. BBRY closed the day up 8.09%, and could be a laggard stock that continues to bounce as leaders get a bit exhausted.

Traders who keep getting sucked into Apple (AAPL) are kicking themselves as the stock continues to be dead weight. Traders are conditioned to follow the former market leader closely, but most every sign of life is then greeted by selling in the subsequent session. Everyone is eager for some sort of announcement regarding AAPL's mountain of cash, but CEO Tim Cook and the AAPL board continue to hoard. Shift your attention elsewhere to avoid not only frustration, but significant opportunities that are all over this market.

*DISCLOSURES: Scott Redler is long BBRY, BAC, LNKD, S, FB, F, WMT. Short SPY.