The Pitch Is Back
And the
reversal reverses.
Good volume, good price movement, good
leadership, good finish.
Naz turnover swelled 18% over that of
Wednesday.
Wednesday, I had suggested taking
one’s eyes off one’s screen to look at a few charts in the context of the bigger
picture.
This is a good exercise if you find
yourself getting too caught up in the day-to-day fluctuation that’s normal for
any market.
Taking a glimpse at the following
charts of market leaders shows you that, in every case, a pullback is entirely
normal, and, indeed, desired.
Big moves take time to build.
At least they did prior to ’98.
Since then, movements in equities have
become more compressed, with moves that used to take six months now taking place
in six weeks.
This a function of speedier
dissemination of news and increased electronic trading capabilities.
Nevertheless, big-winning stocks don’t
go up every day.
As I’d said Tuesday, one benefit of
pullbacks such as this week’s is that they "…potentially give the
intermediate or swing player logical pivots from which to enter initial or
add-on positions in the days and weeks ahead."
If you, by chance, trimmed some of
your positions on Tuesday and Wednesday and are now grousing about it, relax.
If this is an enduring bull run, and
assuming the names you were in were bona fide leaders, there will be much more
daylight ahead for them and for your account.
For intermediate players, however,
it’s also important to realize that jumping back into a name that you’d just
exited is a high-risk play.
That is, unless a stock is just
emerging from, or close to, a base.
Otherwise, you’re buying a stock
that’s extended, an unattractive risk/reward situation.
Some time back, I’d mentioned that EMC
(
EMC |
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watching for clues as to the sentiment of institutions.
These are companies boasting fast
earnings growth (at least 30% in each of the next two fiscal years) of a highly
stable nature.
I’d explained that, compared with
other big techs such as Dell
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Applied Materials
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Internet on the U.S. economy.
Two others that I was watching closely
were Oracle
(
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(
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growth for companies of this huge size, high stability of earnings, and high
exposure to the Internet.
On this score, EMC put in back-to-back
up sessions on solid activity.
Cisco, and Sun also rose Thursday on
higher volume, while Oracle has more work ahead of it.
Among the names, Juniper
(
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"4" of a 1-2-3-4 Cooper pullback on slightly increased trade.
BEA
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Flextronics
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(
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staged a high-volume, wash-and-rinse day) bounced off their lows on increased
trade.