I’m Watching These Leaders
The
major averages were able to close marginally higher today, but
volume came in lighter. We have not
seen any solid accumulation since 4/2 and we are more than due to
re-establish a healthy market.
Â
Right now is definitely a
time to be cautious. Cash may not
be the best place to go with an entire portfolio, but if there are no stocks
to buy without a ton of risk and current holdings are flashing warning signs, it may be a good parking place.
The S&P 500 flashed
blatant distribution days on 4/9, 3/31 and 3/28.Â
The NASDAQ flashed blatant distribution days on 4/9, 3/31 and 3/27.Â
Both indices hit resistance and came under heavy selling on 4/7, as
they reversed and closed at their lows for the day and this could also be
considered a distribution day. This
market is much more uncertain than a week ago when we saw the massive rally on
4/2 followed by very heavy volume.Â
For now, things need to be
played more cautiously. Insist on
solid setups before making new purchases. Even then, it may be a good idea to use a smaller position than when
everything is working. If we see
another day or two of distribution, cash may be called for.
Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating) was setting up a
low-level handle for a massive multi-year base, but it appears to be wedging
higher. It is three weeks long
and volume has been increasing. This
is the type of setup that may carry extra risk. The stock saw a nice boost on heavy volume after reporting solid
earnings numbers today.
 
Cognizant Tech
(
CTSH |
Quote |
Chart |
News |
PowerRating) was
setting up, but has been delivered a solid blow over the past couple of
sessions, particularly today.
 
After poor, choppy action,
Netease
(
NTES |
Quote |
Chart |
News |
PowerRating) filled a gap and bounced right back. The initial breakouts through 17.82 appeared very solid. At this time, it will be interesting to see how this stock acts in
terms of price and volume.
For the time being, early
leader United Online
(
UNTD |
Quote |
Chart |
News |
PowerRating) seems to have come off the ropes and arrested its
losses.Â
 
Thus far, one of the best
performers and best-acting stocks is still probably Hi Tech Pharmaceutical
(
HITK |
Quote |
Chart |
News |
PowerRating). The company boasts stellar earnings growth
(three consecutive, double-digit
gains) and an ROE in excess of 20%.
 
As we move forward and watch
the market’s price-and-volume action over the next couple of days, it will
also be very important to see where leaders are coming from and how they are
trading. When we start to see
leaders crumbling without a fight and no new setups appearing, trouble may
lie ahead. On the other hand, if
they find and hold key areas of support and power higher, we may find
ourselves able to make more money.
Enjoy your weekend,