Don’t Count These Stocks Out

• November 11, 2003
• Tim Truebenbach

The market looks like it is
in correction mode for the short-term. Volume came in
extremely light and may be attributed to the Veteran’s Day holiday.

The major averages
stand only a few percent off their highs. The S&P 500 for
example, is only off by about 1.5%. This correction seems
mild, to say the least.

Growth stocks are a different
story. They seem to be taking the brunt of the selling.
Accredited Lenders
(
LEND |
Quote |
Chart |
News |
PowerRating), Ryland
(
RYL |
Quote |
Chart |
News |
PowerRating), Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating),
(
SINA |
Quote |
Chart |
News |
PowerRating),

(
USNA |
Quote |
Chart |
News |
PowerRating) and Sandisk
(
SNDK |
Quote |
Chart |
News |
PowerRating) are just a few examples.
Most of these names have been taking
hits in as healthy a way as a declining stock can take!

Take a look at Yahoo!’s
volume into its pullback that has taken it
almost 10% off its high. The
volume is far below its 50-day average
and the stock has yet to bump up against its 50-day moving
average.

Don’t get me wrong, there are
a few spots that warrant caution. But even
some of these areas can be looked at in a positive
sense. I am immediately speaking of stocks like Aeropostale

(
ARO |
Quote |
Chart |
News |
PowerRating). The stock has been blasting through moving
averages on its way down, and was unable to
arrest the selling even with Merrill’s positive
retail upgrades this morning. Although it was positive
to see this stock finish near the highs for today’s session.

For the most part, this
appears to be a healthy correction in the market. Since it
will probably lead to higher prices over the
next few months, now is a great time to move
into leading groups and stocks. It is also a good time to
look out for new growth-oriented names that are setting up and under
accumulation, or professional buying. Internet and medical
stocks have been solid leaders in this Bull
Market, and I would definitely not count them out yet.