Green Light, Proceed With Caution
Okay, we’ve had two, maybe three,
great bullish signs. Greenie is acting like he’ll get the Fed out of our way.
The Florida standoff appears to be coming a conclusion. And the Nasdaq Composite
recorded a powerful accumulation day. But remember: It’s a market of stocks,
not a stock market.
There are some setups out there, but
I’m not seeing yet the kind of base-and-breakout proliferation that would cause
me to go whole hog here. That’s fine. Once the market bottoms the leaders can
take some time getting into position. We saw that in 1990-91. The market
bottomed in October, then came alive in January. In the present context, we
have, after all, come down 50% on the Naz. Ideally, this market will digest here
without revisiting the old lows, giving the high relative strength stocks time
to form proper bases.
As for our news movers, Celgene
(
CELF |
Quote |
Chart |
News |
PowerRating)
appeared to benefit from a report from the Dana-Farber Cancer Institute and
Harvard Medical School. Researched presented data results at the 42nd annual
meeting of the American Society of Hematology on laboratory studies evaluating
the activity of Celgene’s IMiDs(TM) on multiple myeloma cells. The results
suggest that IMiDs may be beneficial in the treatment of multiple myeloma.
The top field of all charts in this
commentary uses a logarithmic price scale and displays a 50-day price average in
red. In cases where the displayed security has traded long enough, the top field
also will exhibit a 200-day moving price average in black. In the second field,
a blue relative strength line represents the displayed security’s price
performance relative to the S&P 500. The third field displays vertical daily
volume bars in black with a 50-day moving average in blue for volume.
Shares in Celgene gained 7 5/8 to 69
1/2 of nearly 1.8 million shares, about 44% average daily trade over the past 50
sessions. This action follows sharp gains on strong volume in the prior session,
clear evidence of institutional accumulation.
The stock’s relative strength line —
which plots its performance against the S&P 500 — is forging ahead, a
health sign. And it has strong TradingMarkets relative strength ratings for the
intermediate term. As of Monday’s close, those scores were 95 for the past 12
months and 91 for the past six. I’d still like to see the stock’s relative
strength line enter new high ground, either before or with a breakout in the
stock.
Also take note that the stock is
closing in on resistance at 74 7/8 a share.
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