The trend is still up, so follow it
Timothy J. Truebenbach is the
President of True Capital Management and general partner of True Capital
Partners LP, a hedge fund. He uses a disciplined model that trades on the
intermediate-term time frame. For a free trial to Tim’s Nightly Stock Analysis
Report
click here or call
888-484-8220 ext. 1.
It’s
tough to get excited about a market that is
going nowhere fast. It’s true
that less than 1 month ago the NASDAQ hit its highest point since February of
2001, but the action is just not that consistent during this recovery.
The stock market is actually in
a confirmed uptrend with today’s trading being one of the few distribution days
we have actually seen in the past 2 weeks. A rally is usually in trouble if
professional selling starts to stack up day after day, but that is still not the
case. The bottom line is that the market and buyers have very little reason to
pull it together based on last week’s economic data. The market hates
uncertainty and this is exactly what we are seeing primarily from the new
Federal Reserve chairman, Ben Bernanke and the Fed as they have done little to
indicate what direction rates will take in the near future.
Leading stocks have seen
rotation recently. Google
(
GOOG |
Quote |
Chart |
News |
PowerRating) has entered a new base-building period
while Apple
(
AAPL |
Quote |
Chart |
News |
PowerRating) tries to find its footing.
Smaller-cap names such as Click
Commerce
(
CKCM |
Quote |
Chart |
News |
PowerRating) and Vital Images
(
VTAL |
Quote |
Chart |
News |
PowerRating) have attempted to take the
reins. Up to this point, they have been faced with the market’s resistance.
Since the market has yet to
show overwhelming evidence, it is best to remain with the trend that has been in
place since October: up. The noteworthy fact is that it has paid better to buy
into the pullbacks rather than chase stocks with solid fundamental and technical
traits higher.
Enjoy your Investing!
Tim
Comments@TrueCapitalManagement.com