Techs and telecommunications returned as leaders in the relief rally. All major averages were up yesterday except the Dow, which lost five points. Retail, drugs, brokerage, and banks didn’t join in the rally.
Volume in the generals was good, led by Dell (DELL), which gained 7.9%.The institutions came back for Dell in a big way yesterday after a 56% retracement to 35 5/8 (off the October 1998 low of 20 3/8 to the February 1, 1999 high of 55).
The rest of the generals–MSFT, INTC, CSCO, SUNW, WCOM, and EMC–all rallied big on good volume as well. Even IBM–love it today, throw it away tomorrow–tacked on 2.2%. Maybe that 210 analyst will decide which price target he wants. (Like companies change every other week–not quite.)
No, it’s not unusual for the market to act like it did yesterday. Reminder: it might be too pat for the S&P 500 to just barely touch its 50-day exponential moving average (as it did yesterday) and then run–that would make it too easy for the masses. How about a quick, strong flush below the 50-day EMA, which would shake some riders, then a re-cross of the average on a way up to challenge the highs, and, I hope, make new highs? Stay tuned.
Target Stocks Of The Day It is especially important to stick with institutional, high-performance stocks at quarter-end. They will be all over them, and you should be, too.
Excellent patterns at or near highs include Sun Microsystems [SUNW>SUNW], Schwab [SCH>SCH], Cisco [CSCO>CSCO], EMC [EMC>EMC], Network Appliance [NTAP>NTAP], MCI Worldcom [WCOM>WCOM], and Airtouch Communications [ATI>ATI]. Also watch Dell [DELL>DELL] and IBM [IBM>IBM]–both had very positive volume and institutional money flow yesterday.
High-flyers from our Proprietary Momentum List that are in position include DoubleClick [DCLK>DCLK], RealNetworks [RNWK>RNWK], CMGI [CMGI>CMGI], and Go2Net [GNET>GNET]. But unless you can get instant reports of your executions and are able to stop yourself out the same way, stay away from these four stocks.
Editor’s note: If you want to learn more about Kevin Haggerty’s trading strategies, click
on the link below to go to his new series of tutorial articles.