Just The Way We Like It
The market continues to impress. The last
several days saw the major averages pull back in lighter trade…just the way we
would like to see it.
The “M” seems to be taken care of for the time being. On the other
hand, growth stocks have not exploded onto the scene yet. There are successful
breakouts here and there, but wherever success is found, multiple failures are
not that far behind. Penn National Gaming
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PowerRating) attempted a breakout of a
five-month base on 12/7, and has since failed to push higher. Was the base
V-shaped and prone to failure? Was the handle too short or nonexistent? I
don’t believe in many of the excuses lately, except for one: growth stocks
breaking out are dangerous right now and have not yet begun to work
Direct Focus
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PowerRating) attempted a move out of a short handle yesterday
with volume that was well above average. Today the stock spent the morning
retracing the move.
The successful homebuilding group has managed to pull back on lighter trade
and appears set for a bounce. Two of the group’s leaders, Ryland
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RYL |
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PowerRating) and
NVR Inc
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NVR |
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PowerRating) display this action very well.
There are still not a lot of prospects to go after, and the stocks that are
setting up have not had much success. As the weeks and months go by, this will
eventually change as the market continues to move away from the bottom.
Until Thursday,