Cerner (CERN)

Here’s a company of unexceptional performance. Earnings decelerated for the fifth quarter in a row at last report. The company missed sales estimates and they were lower for the third quarter in a row and negative year over year.

And yet the stock goes higher. Much higher. Recently it went higher in 12 of 15 days, which O’Neil says qualifies the company as a buy candidate on its next significant pullback. That would be now.

Cerner is the leader in medical software, a mid cap stock in a filed of mostly tiny companies. And it is rising because of President Obama’s stimulus plan that gives inducements to digitize medical records in an effort to reduce costs in the system.

We frankly doubt this company has the wherewithal to deliver on these promises, but that’s besides the point. The market believes and that’s all that counts. Price recently ran over 40% in a month and half and has now pulled back to the 50 MA, from which it began to rise on Monday.

We are not fans of the volume on the pullback, nor of the volume on Monday as it began to rise. We don’t think it matters. With medical stocks leading the 52 week highs lists we consider this a buy here using the 50 MA as your stop.