Leaders Lead
The true leaders
continued to lead Wednesday while the big-cap techs gave ground. This is what
separates the successful intermediate-term traders from the pack. By monitoring
the high relative strength stocks in healthy price trends, we spot the
leadership while the indexes mislead the crowd.
Serologicals
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rose 3.1% on increased volume into new high ground. The stock’s relative
strength line, which measures its performance vs. the S&P 500, also made a
fresh high.
Atlantic Coast Airlines
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added 4.3% on strong volume and appears to be basing here.
PeopleSoft
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which I singled out in Tuesday’s commentary as forming a fake cup-with-handle,
ran into further headwinds.
SunGard Data Systems
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is trying to consolidate after a pullback following a prior breakout. So far,
its relative strength line is holding up.
All stocks are risky. In
any new trade, reduce your risk by limiting your position size and setting a
protective price stop where you will sell your new buy or cover your short in
case the market turns against you. For an introduction to combining price stops
with position sizing, see my lesson,
Risky Business.
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