FLS: Solid Fundamentals = Higher Price!

Flowserve Corp (FLS) This Irving, Texas-based company makes pumps, valves and mechanical seals. Earnings grew at a strong pace the past several quarters, with triple-digit gains two out of the past three periods. Sales growth ranged from 19% to 26% in the past three quarters. Other fundamentals are also solid. The stock started consolidating in early June. Its trading pattern looked more like a flat base as Flowserve was trading rather tightly with 10-week support. But in the shortened week of July 4, the stock plunged 17%, sinking below its 10-week line. If it weren't for a short week, volume would have probably been above average. Nevertheless, the following week brought a reprieve, as the stock soared 15%, regaining its support line. Turnover was high. The plunge and fast recovery gave the pattern a V-shape, which is considered a weak structure. Still, the base has three weeks of gains on above-average volume, a constructive factor. It cleared a 140.45 buy point Monday. Good Trading!