Keep Your Eye On the Base
During the final phases of bear markets, many stocks
often are well through their bottoming phases. You’ll see them form nice long
bases and exhibit signs of institutional accumulation. This does not make them
blatant buy candidates, of course. But these are the stocks you’ll want to be
watching and perhaps nibbling on.
Here’s a good example I found in the “Stocks
Building a Base” list from our indicators page.
In the midst of the bear market, FPL Group
(
FPL |
Quote |
Chart |
News |
PowerRating) has been
doing well with a three-month Relative Strength ranking of 84 and has been in a
steady uptrend since the beginning of 2000. The most important thing from an intermediate-term
trader’s perspective, however, is that the stock has been in the process of
building a base for the past three months.
Also rounding out the favorable technical picture is that FPL
has been bouncing rather consistently off its 50-day moving average on
pullbacks. Swing traders will also want to keep an eye on this.
Until Thursday,