Hanging In There
The major
averages seem to be hanging in there after Tuesday’s bout with
distribution.
The problem I have started to see is
lack of conviction in the leadership. The Ciscos
(
CSCO |
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YHOO |
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can only bounce so far, before they succumb to overhead supply. Without real
leadership taking over, this market isn’t going to rally forever.
I will go through a quick run-down of
stocks that have made it onto my “leader board,” or stocks that I am
watching for potential leadership qualities. Please keep in mind that these
stocks have not broken out to new highs with explosive strength or overwhelming
conviction, or they have not broken out at all, (this being the current
problem):
(
CYTC |
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PowerRating),
(
BVF |
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PowerRating),
(
ACDO |
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PowerRating),
(
DORL |
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PowerRating),
(
LLL |
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PowerRating),
(
GISX |
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PowerRating),
(
APOL |
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PowerRating),
(
KKD |
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PowerRating),
(
ESRX |
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PowerRating),
(
CERN |
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(
ADVP |
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PowerRating).
Advance PCS
(
ADVP |
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PowerRating) lacks in the
fundamental department that I qualify, but is setting up the handle of a short,
six-week base. The first two mentioned,
(
CYTC |
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PowerRating) and Biovail
(
BVF |
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PowerRating) have not been
able to break out with any conviction and have been subject to steep selloffs.
A third stock in this category is Engineered Support
(
EASI |
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PowerRating).
Accredo Health
(
ACDO |
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PowerRating) worked its way
up the right side of its base, and then fell victim to selling. L3 Comm
(
LLL |
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broke out of a nice handle, and only managed a 6½% rally past the pivot point
before pulling back. The jury is still out on this one, as we wait to see what
today’s close brings.
Krispy Kreme
(
KKD |
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News |
PowerRating) may make the
best doughnut in the land, but the base does not yet offer the best setup on a
technical basis. Admittedly, it is still working up the right side and may only
need a short while longer. Fundamentals are there on this one and more
importantly, it proved its merit in the April-May rally.
At this point, it continues to be
important to eye things conservatively. The market appears to be all right, but
the underlying leadership may be saying otherwise. As a person who buys stocks
or spends time in cash, I would like nothing other than the first point to
materialize, but we must still be patient for the correct time when the market
is handing out profits.
It is just as important now, as ever, to
stay tuned into the market and individual stocks, so I will continue with my
daily and weekend research. Hopefully this picture will clear up soon and offer
great opportunities for everyone.
Until Tuesday,