Beneath The Surface
I like
sessions such as Thursday,
when the averages show you little, volume is slack, and people are thinking
about the upcoming summer weekend.
There will be plenty of days in which
the averages have little to say — yet the leaders will be making noises, there
for anyone who cares to listen.
Thursday was one of those days.
The value of having a set of leading
stocks on your screen so that you have a good idea of what’s going on beneath
the surface each day can’t be overestimated.Â
There’s a reason why these names are
referred to as “leaders.”
By following this exercise — and by
looking at the market through a set of glasses colored by the four concepts of
accumulation, distribution, support, and resistance — you will, over time, gain
a better feel for the market than the vast majority of other participants.
Most of these “other
participants” believe that reading the supply and demand of a market or
stock is secondary to the fundamentals.Â
Actually, most believe that the
technicals are some sort of black magic.
Successful traders, however, know
otherwise.
…Again, the directional trade that
we’ve seen in the wake of past 8%-12% intermediate-term corrections is not what
we should expect this time around.
The backing and filling of late is,
thanks to the still-meaningful resistance atop many issues, from glamour to
goat.
Meanwhile, on Thursday, the
“right” names did the “right” things on the tape.
For instance, after a one-day
pullback, SDL
(
SDLI |
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PowerRating) charged ahead to a fresh high on volume, up 7%.
Others in our “Group of
Seven” enjoyed a respectable session: Techne
(
TECH |
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PowerRating) was up 11%,
Keithley
(
KEI |
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PowerRating) +7%, Linear
(
LLTC |
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PowerRating) +6%, Sanmina
(
SANM |
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PowerRating) +1%, Newport
(
NEWP |
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PowerRating) flattish, Micron
(
MU |
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Chart |
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PowerRating) -3%.Â
Corning
(
GLW |
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PowerRating), another important
issue, escalated 5%.
Among the bells, 17 of 21 issues
gained. EMC
(
EMC |
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PowerRating), Nokia
(
NOK |
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PowerRating), Oracle
(
ORCL |
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PowerRating), and Nortel
(
NT |
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PowerRating)
continue to look solid.
Elsewhere, yet another disappointing
session for RF Micro
(
RFMD |
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News |
PowerRating).
And Xilinx
(
XLNX |
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PowerRating) couldn’t do
much to salvage Wednesday’s failure of Tuesday’s breakout from a three-month
base.
XLNX’s cousin, Analog Devices
(
ADI |
Quote |
Chart |
News |
PowerRating),
also fell further into its 11-week, O’Neil cup-with-handle.
More pluses: Constructive work was
seen in a host of names, including Brocade
(
BRCD |
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Chart |
News |
PowerRating), Check Point
(
CHKP |
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News |
PowerRating),
Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating), Digital Lightwave
(
DIGL |
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Chart |
News |
PowerRating), Koninklijke
(
PHG |
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Chart |
News |
PowerRating), Veritas
(
VRTS |
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PowerRating), Voicestream
(
VSTR |
Quote |
Chart |
News |
PowerRating), etc.
Worth
Watching: Check Point
(
CHKP |
Quote |
Chart |
News |
PowerRating).
Go, Lakers!
With rare
exceptions, stocks with less than 300,000 shares of average daily volume will
not be mentioned in this space.