How To Find The True Strength In The Chinese Internets
The
market finally showed a tired day of trading after so many bullish
recoveries over the past week and a half. On Tuesday, we saw the major indices decline on
heavier trading volume than Monday, amounting to distribution.
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Growth stocks took it on
the chin and it is almost an expected decline after the moves we have been seeing.
Almost every stock that had something of a base pattern has been breaking out
to new highs without regard for quality. Artisan
Components
(
ARTI |
Quote |
Chart |
News |
PowerRating) moved higher the past few days, but the
stock was a little late to the game and has underperformed most stocks in the
market. The breakout ran into trouble as the name took a strong hit.
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^next^
American
Pharma
(
APPX |
Quote |
Chart |
News |
PowerRating) is another name that broke out long after
the recent run had begun, and has been unable to hold its pivot point of 39.40.
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Netflix
(
NFLX |
Quote |
Chart |
News |
PowerRating) has been in a recent article and a very popular stock among readers
of this column. After setting a new high in the morning, it retreated on above-average
volume.
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SINA
(
SINA |
Quote |
Chart |
News |
PowerRating) made a similar attempt at breaking through a 49.54 pivot point before
turning back. The major difference was that volume was not very strong into
the move and ended up below average. This amounts to a day of consolidation,
in my book.
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Also from the same group,
SOHU
(
SOHU |
Quote |
Chart |
News |
PowerRating) found support while CHINA.com
(
CHINA |
Quote |
Chart |
News |
PowerRating) was unable to hold its recent breakout through 12.10.
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The Chinese Internets will
be worth watching, in the event of a market correction or consolidation. I like
the group’s prospects and their true strength will show best during adversity
(if it is really there).
^next^
It is never fun to watch
stocks decline or markets come under distribution, or professional selling,
but the fact is we have barely seen anything, other than today. There is really
no cause for concern until we see a consistent string of selling. This market
remains locked in an uptrend and selling will most likely offer new setups and
buying opportunities.
Have a great week and look
to the stocks that looked the strongest since late-December, such as
(
WRLD |
Quote |
Chart |
News |
PowerRating),
NFLX,
(
YHOO |
Quote |
Chart |
News |
PowerRating),
(
EBAY |
Quote |
Chart |
News |
PowerRating),
(
FARO |
Quote |
Chart |
News |
PowerRating),
(
PRTL |
Quote |
Chart |
News |
PowerRating), etc., for the market’s
real direction.
Tim Truebenbach
timt@tradingmarkets.com