This Is What I See In These Two Large Cap Stocks
A couple of slight changes I am seeing.
What is not changing? The technical condition of the market is still fine. Every
pullback has been minimal, controlled and bought up very quickly. It is also a
positive that there are just many more stocks and sectors in good technical
shape than poor technical shape. This is in stark contrast to the better part of
the past three years.
BUT…I think you can pull off the pedal here. Keep buying the new breakouts if
they occur…but lay off the extended names. I believe extended names start to
rest or pull back here. This is a product of success, not weakness. This is a
product of being overbought on a price basis.
Changes…just a few you need to look at. As I have told you, I can more easily
isolate weakness in a good market. Here are a few signs of weakness.
(
GE |
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PowerRating). I know
this stock alone does not matter to you, but I still believe it is important
to watch. I believe Friday’s action may have topped the stock near-term.
Â
(
MSFT |
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PowerRating) also
is acting toppy. It is not getting a head of steam and is on the verge of
breaking its moving averages.
I am also noticing
a few breakdowns in the SEMIS.
RETAILERS are
starting to act suspicious as
(
WMT |
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News |
PowerRating) breaks down.
These negatives by
themselves don’t mean a lot. I just believe in looking for clues underneath the
surface that cause me to take a step back.
Continue to play the
breakouts and continue to buy the pullbacks…of course, that’s until things
change…and it has not happened yet.
Lastly, sentiment
remains as poor as can be as complacency, bullishness and speculation are
pervading the market just seven weeks off of a six-year low on the NYSE. Keep a
close watch because I do not believe the market accommodates the masses for too
long…but give the technicals priority.