July 2010

July 2010

The charts referred to below can be viewed at http://www.ibdinvestor.blogspot.com/

· The market is Follow-Thru’d on 7/13, but will this rally succeed after two previous failures?

· LED lighting is looking bright, Veeco Instruments (VECO) and CREE Inc. (CREE) are making it brighter

July started off with the market correcting down, then follow-thru’d on July 13, but after the two 2 previously failed FTD in June, cautious measures are being taken before entering this one. This rally has climbed back up to the 200 day moving line but has been met with some resistance, so a push above this will confirm this FTD. This attempt does has more stock leadership, which increases the odds of success. Leaders are Foreign Banks (Chile's Banco Santander (SAN), Bancolombia (CIB)), Cloud Computing (Salesforce (CRM), VM Ware (VMW), and LED lighting (Cree (CREE), Veeco Instruments (VECO)).

Semiconductor factory workers using Veeco equipment inspect wafers that will be turned into LED chips.

This month’s stock spotlight is Veeco Instruments (VECO) which provides manufacturing equipment for 80% of the world’s LED lighting makers. Their second quarter earnings more than tripled, which beat analyst expectations. The company also reported a backlog of orders and raised the company’s outlook. This will also be good news for CREE Inc. (CREE), a maker of LED lighting. LEDs are everywhere: computer screens, TVs, car lights, street lights, home and business lighting. More expensive than incandescent or fluorescent lights, VEECO’s equipment aims to “greatly decrease” its price, according to Veeco Chief Executive John Peeler. LED’s also have other advantages; less power consumption, up to 1/10^th that of an incandescent bulb and less maintenance. John Valero facilities director at the Hard Rock Café in Las Vegas, says the cost to light the outside of the Hard Rock has been cut to $1,900 a year from $18,000 after their LED conversion.