Five Stocks To Watch

• June 1, 2004
• Tim Truebenbach

The NASDAQ and S&P 500 both
tested and held support at their respective 50-day moving averages. 
Unfortunately, there is really no really buying interest to speak of as the
last day of clear, above average volume was back in April. 

 

This market is currently in a
confirmed uptrend which simply means there has been evidence of accumulation. 
In my opinion, this evidence was very weak as volume has been extremely light
into the rally that has now taken the NASDAQ almost 7% above its 5/14 low. 

We have seen a few growth
stocks break out and move slightly higher.  Idexx Labs (IDXX) provides an
example as it moved out of a short base and now holds a gain of about 5% from
the point of 63.71. 

 

Akamai Tech (AKAM) attempted
a move through its pivot point of 15.57 today, but volume was not very heavy.

 

comm (QCOM) has been
working through a double-bottom base with a buy point just above $69.  This
has been a strong stock for months now, and continues to display fairly strong
earnings.

 

eResearch (ERES) showed that
this market does contain danger and warrants caution.  The stock surpassed its
pivot point of 23.85 with heavy volume on 5/25.  One day’s trading (today) has
seen the entire gain quickly erased. 

Overall, I would say this
market may contain trading opportunities at best.  Plenty of risk still
remains to only make small amounts of money.  Broad examples include the
recent action behind Research in Motion (RIMM) and Sanderson Farms (SAFM). 
Both of these names show that it was initially difficult to make money on the
long side as they showed strength and then quickly dropped; followed by quick
short squeezes into the current market rally.  Looking back, it was entirely
possible to buy them into weakness (and miserable price/volume action) and
that would have produced strong gains…but with a lot of risk.

The best thing this market
currently appears to offer is higher-risk opportunities for very nimble
traders, or a large cash position while we wait for
the market to show us something a little more convincing.

Tim Truebenbach