CALM Might Not Be Flashy, But It’s Ripping Higher

  • February 17, 2004
  • Tim Truebenbach

The
“leading” Nasdaq seems to be taking a breather as
the S&P 500 and NYSE-related indexes have assumed control. The S&P 500
hit a new high today as NYSE volume came in heavier than Friday’s levels.
The Nasdaq also enjoyed a nice rally, but volume fell short of the 1.8 billion
shares that traded on Friday.

image src=”https://tradingmarkets.com/media/2004/Tim/tt021704-01.gif” />

image src=”https://tradingmarkets.com/media/2004/Tim/tt021704-02.gif” />

I wouldn’t count the
Nasdaq out as we all know that it tends to make very big moves very quickly.
The largest positive development we have seen over the past week has been the
re-emergence of a common pattern that has propelled the averages higher since
March of 2003. We are seeing lighter-volume declines and higher volume rallies,
just as we saw in the S&P 500 today.

^next^

We are also seeing one other
major positive that I closely follow: growth stocks pushing to new highs and
even breaking out successfully. Dick’s Sporting
Goods
(
DKS |
Quote |
Chart |
News |
PowerRating) has been strong over the past few weeks after
breaking through resistance at 52.12 and 53.25.

image src=”https://tradingmarkets.com/media/2004/Tim/tt021704-03.gif” />

They may not be the flashiest
company out there, but egg-producer Cal-Maine Foods

(
CALM |
Quote |
Chart |
News |
PowerRating) ripped higher on above-average volume today and pushed through a
pivot point at 41.09. The next step for this and other breakouts is strong follow-through
after the initial push.

image src=”https://tradingmarkets.com/media/2004/Tim/tt021704-04.gif” />

Sina

(
SINA |
Quote |
Chart |
News |
PowerRating) and Gen-probe
(
GPRO |
Quote |
Chart |
News |
PowerRating)
managed to hold support at their 50-day moving averages yet another day. It
is always positive to see recent leaders able to hold areas of major support.

image src=”https://tradingmarkets.com/media/2004/Tim/tt021704-05.gif” />

The market environment still
remains positive as things appear to be shaping up in both the indices and growth
stocks for higher prices over the next few weeks and months. There is no alternative
for higher prices, so that will be the next confirmation of the positive action
we are looking for. In my trading service, we list growth stocks that have been
doing well in recent weeks, and those are names like
(
YHOO |
Quote |
Chart |
News |
PowerRating) and
(
ARO |
Quote |
Chart |
News |
PowerRating)
that I want to see push higher as well as other names rally off support.

Tim Truebenbach

timt@tradingmarkets.com