Here’s why I still favor growth stocks
Timothy J. Truebenbach is the
President of True Capital Management and general partner of True Capital
Partners LP, a hedge fund. He uses a disciplined model that trades on the
intermediate-term time frame. For a free trial to Tim’s Nightly Stock Analysis
Report
click here or call
888-484-8220 ext. 1.
The action we are seeing out of the market
appears sound as a confirmed uptrend remains in place. The Dow, S&P 500 and
NASDAQ have accumulated only 2 distribution days in the past several weeks and
that is not enough to run for cover.
For the most part, we have a few different things going on in the stock market.
Small- and mid-cap stocks are enjoying a strong showing as is the case with many
Bull rallies. Growth stocks are one of the best places to put money during a
good market and this is no different. Names like Tradestation
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Meadow Valley
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are a stone’s throw from new highs. Fundamentally sound names such as these can
be volatile, but they seem to be attracting new money into every dip.
Secondly, we have strong leadership coming out of the Dow, which is only 1.5%
off its high. Names such as Caterpillar
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BA |
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Gamble
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represent groups that money has been flowing into and leading the market higher.
One thing you may wish to note on your own is which industry groups the
above-mentioned names hail from as those are your market leaders.
Lastly, we have the recovery of technology. Very
badly beaten stocks such as Intel
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are trying to appeal to investors as the NASDAQ (primarily the NASDAQ 100) works
its way out of a bottom.
The three different groups within the market tell very different stories from
day to day, but if you are looking to put your portfolio to work in individual
names or portfolio’s, you are probably going to see varied success between these
three groups. In my humble opinion, you will see the biggest bang for your buck
(assuming the market continues upward) out of the first group, followed by the
second and ‘old tech’ will comprise the laggards of the market.
Enjoy your investing and keep tabs on the market’s price and volume action each
and every day.
Tim