Here Are Some Solid Candidates To Stalk

  • January 7, 2003
  • Tim Truebenbach

The market posted the evidence we were waiting for
 before
moving back into stocks on Monday.  The
Dow and S&P 500 rallied 2% on heavier volume than Friday. 
The only problem with the current market is that Tuesday’s action was
exactly what we didn’t want to see the day after a follow-through. 
The day was plagued with distribution in the Dow and S&P as they
finished lower on heavier trade.  The
index that has not confirmed the newest rally yet, the NASDAQ, showed the best
strength as it managed a small gain on the day.


 

I wouldn’t necessarily
recommend putting all of your capital to work, but I do think there
is nothing wrong with stalking solid candidates that exhibit solid technical
and fundamental criteria. As always, it
will be important to see how this rally plays out and control our risk by
knowing where we will bail on a position that isn’t working before
entering the trade and using proper money management.

Ebay and NBTY were two of the first names out of the
gates yesterday. 

Ebay
(
EBAY |
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PowerRating) went
through its pivot point of 70.95 on very heavy volume and has since held above
it.  It has also managed to curb
volume during the consolidation following the initial move.


  

It was nice to see the stock perform while other
internets such as Hotels.com
(
ROOM |
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got slaughtered.


 


(
NBTY |
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picked up towards the close of trading.  The
company boasts solid fundamentals but lacks the group strength I would
normally like to see. Regardless, the
stock has managed to follow through today on the initial move.


 

Today we have been watching the progress of Hyperion
Solutions
(
HYSL |
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PowerRating) as it attempts a move through the pivot of
30.10.  So far, it has been unable
to amass a solid gain although volume has been running pretty heavy on the
attempt.


 

United Online
(
UNTD |
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PowerRating)
has formed a base that dates back to 11/29 since its initial move in the
fourth quarter.  Today, it is
trying to make some headway through its Buy Point of 17.60 on above-average
volume.


 

Other stocks such as Accredo
Health
(
ACDO |
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PowerRating), Nextel
(
NXTL |
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and Symantec
(
SYMC |
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PowerRating) continue to set
up.  In this new, unproven rally
it is important to insist on great fundamentals and technicals.
Both will be necessary in a stock’s chances for success.

 

Whether this confirmed rally marks a new Bull Market or a
brief continuation of the move that began in the fourth quarter, it will be
important for us to stay on top of buy prospects and keep risk in check.
Force the market to prove itself and pull you in while following a
strict set of rules. When a Bull move
begins, it will also be much more lucrative to set aside all personal opinions
that cast doubt or hesitation over chances for success…that is what rules
are for.

Good Trading and Happy 2003!

Tim