On Second Thought…
A wash.
At first blush, that’s what Tuesday
seemed like in the growth sector.
The Naz emerged with a small gain as
volume swelled 18%.
But when all was said and done, it
wasn’t such a neutral day after all.
On the plus side:
1) the index gave back none of
Monday’s 3.3% romp, 2) activity was the third heaviest in the last nine weeks
and the heaviest session in the last 12, and 3) the index went out above
Monday’s high as some tech buyers surfaced in the final 15 minutes.
The vogue names were evenly split as
to winners and losers. Among the losers, about one in three retreated on rising
volume.
In all, nothing to jump up and down
about.
But not bad, either.
It’s been a while since we’ve seen an
advance in which you could actually take your time with entries.
I was speaking with Greg Kuhn recently
and we noted that even if one was still in a 100% cash position, one shouldn’t
feel left out of the new advance.
For the tech stars will have plenty of
opportunity to strut their stuff.
Of course, what they do with it is
another matter.
Along these lines, the
intermediate-term trader has gobs of time to:
1) Build full-sized positions as
stocks scale the right side of their cups but before bases are completed (known
as “cheating,” and easier said than done, in many cases), or
2) Establish half-sized positions on
the way up (cheating, again), then add the second half as the base is completed,
or
3) Wait until the final breakouts to
establish full-sized positions (the lowest risk entry).
If you’re an inexperienced trader
and find yourself getting whipsawed out of positions by attempting No. 1 or No.
2, stick with No. 3.
In any case, to each his own.
The main thing to remember is to pick
spots you’re comfortable with, honor your stops
religiously, and let the market come to you rather than the other way
around.
Letting the market come to you is much
easier in the aftermath of a 41% bear market decline as opposed to a 12%
intermediate correction.
Among the names, Art Technology
(
ARTG |
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PowerRating),
showing nine accumulation days in the past 18, continued to motor up the right
side of its 14-week cup…this is a good example of how the best names early in
an advance make themselves the hardest to buy…only once did the stock pull
back for more than a day (on one occasion it declined two days in a row) en
route to a 125% gain in the past 18 sessions.
Aurora Biosciences
(
ABSC |
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PowerRating)
remained confined to a narrow range after running up 134% off the May 24 low.
A couple of glamours that had lagged
some of their brethren over the past several weeks, Broadcom
(
BRCM |
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PowerRating) and
Broadvision
(
BVSN |
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PowerRating), impressed, the latter in particular.
Along these lines, Jeff Cooper pointed
out in his preopening
commentary: “As leaders break out of congestion, and to new 60-day
highs–and stick–confidence will build and money will find its way to play the
low-level setups as well.”
Celgene
(
CELG |
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PowerRating) pulled up just
short of the top of its three-month, w-shaped base…volume dried
constructively.
Copper Mountain
(
CMTN |
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PowerRating) bounced
back for the second day following Friday’s high-volume downdraft.
Some of the early breakouts were
distributed, including SDL
(
SDLI |
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weeks), Corning
(
GLW |
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PowerRating), and Techne
(
TECH |
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PowerRating).
GSI Lumonics
(
GSLI |
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the top of its handle.
M Systems
(
FLSH |
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three-month O’Neil cup-with-handle on husky turnover.
Millennium
(
MLNM |
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act impressively.
Pericom
(
PSEM |
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PowerRating) busted out of a
three-month base on volume 253% above normal.