Here’s Where I See Healthy Signs
Since
Monday, we have had a few cautionary signs to this market’s
advance. The major averages left big
tails as they closed at their session lows on Monday while volume came in very
heavy.
 
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Some of the recent breakouts
have also been running into some severe problems.
Varian Medical
(
VAR |
Quote |
Chart |
News |
PowerRating) was one of
the first to fall apart out of nowhere. The
stock has since regained some ground following a positive earnings
pre-announcement.
 
Group
1 Software
(
GSOF |
Quote |
Chart |
News |
PowerRating) blasted through its 50-day moving average
today, after closing poorly on Monday.Â
 
Stericycle
(
SRCL |
Quote |
Chart |
News |
PowerRating) was one of the less-pronounced casualties as it reversed from new
highs on Monday to close down slightly. Today,
it opened poorly and never really put up a fight to fill the gap.
 
After these two signs of
trouble, what do I think? I think
some profits should be taken, caution should be used moving forward, but I
would not change my stance other than these slight nuances.
The market has not produced enough distribution to lead us to think it
is headed lower. The failing breakouts
could lead to further distribution in the market, but I am also seeing some of
the best stocks still pushing higher or consolidating their gains in a healthy
manner.
Hi
Tech
(
HITK |
Quote |
Chart |
News |
PowerRating) hit new highs today on above-average volume.Â
This is a name to keep an eye on for entry points as long as the market
remains healthy.Â
 
Ebay
(
EBAY |
Quote |
Chart |
News |
PowerRating) faced brief distribution before institutions decided to lay off
the selling. The stock has been a
solid performer since the October rally.
University
of
Phoenix
(
UOPX |
Quote |
Chart |
News |
PowerRating) is consolidating recent gains very nicely.
 
For now, we have seen both
healthy growth stocks pushing higher and others crumbling.
This may be a sign of trouble, or it could simply be a Bull Market
doing what it does best: keeping
investors in doubt about the environment.
Keep an eye out for very
sound companies with solid charts. The
market will give us much better signals as when to lay low.
Meanwhile, it is important to follow the accumulation evidence the
market has already laid out and the solid performance of some of the best
growth stocks.
Keep stops tight and money
management (position size) even tighter.
Until Thursday,