If You’re Looking For Shorter-Term Moves, Try This Sector
There’s
not a lot to be said about the current market other than to avoid it…FOR
THE TIME BEING.
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The S&P 500 found support
at its 50-day moving average as volume came in heavier than yesterday, technically
amounting to a distribution day. Short-term, I wouldn’t be surprised to
see a rally. All day long, I constantly see bearish investors on CNBC and they
are usually wrong. I still believe we are in a correction that was needed before
we could continue on with the market’s overall uptrend. Once the averages
start to rally again I will be watching to see if they can shift the current
pattern and trade higher on heavier volume instead of lighter trade.
^next^
There have been some encouraging
action out of growth stocks to help provide evidence that we are in a good market
overall. Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating)
is one such example that has been wrought with accumulation. The stock has been
stair-stepping higher ever since this correction began in late-January.
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Bankrate.com
(
RATE |
Quote |
Chart |
News |
PowerRating) is another example. The stock broke out of a base on 3/5/04 and
has acted well ever since. It was also nice to see quarterly earnings’
growth rate pick up in the latest quarter to 56%.
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If you are looking for shorter-term
moves, now may be a good time to hone in on the Nasdaq
and technology after about 7 weeks of declines. For the rest of us, it is best
to wait for some accumulation to show itself in the market. It would be very
healthy to look for a strong move of at least 2% on heavier volume than the
previous day and above-average.
There are plenty of stocks
to consider once the market gets back on track. Many names will most-likely
come from groups that have been holding up during the declines. Telecom
and Wireless may be a place to
look, along with China-related
companies.
Until next time,
Tim Truebenbach
timt@tradingmarkets.com