Market Whispers
The market
has been whispering lately. There have
been no major signs of accumulation or distribution. I have seen two softly
spoken comments by the market that things are improving: The first was the 1%
gain in the Nasdaq last Thursday on higher volume than the day before. The
second has been the market’s ability to see its biggest downside early on in
the trading day, while recovering in the afternoon. This latter observation is what bull markets are made of. In the mid-1990s, the market would see a selloff
in the morning, only to close at or near its best levels.
Growth stocks have been consistently
breaking out, but then returning to pre-breakout levels before trying to move
higher again. University of Phoenix
Online
(
UOPX |
Quote |
Chart |
News |
PowerRating) best proves this. The stock initially broke out on
March 4. After a two-day move, it got crushed, only to return to new highs on
March 28. Do you feel like you’re missing something here? Well, you aren’t.
This is how a wide, loose base with choppy price action forms. At this point,
with the stock setting higher lows and higher highs, maybe it will work itself
into an ascending base for the second half of the year, or maybe not. For now,
it is just an example of the choppy action growth has been experiencing.
A more recent example would include Christopher
Banks
(
CHBS |
Quote |
Chart |
News |
PowerRating).
JDA Software
(
JDAS |
Quote |
Chart |
News |
PowerRating) looked promising in its break through resistance at 29.69 on March
27, but today’s warning from Peoplesoft
(
PSFT |
Quote |
Chart |
News |
PowerRating) was more than JDAS could handle as it has now began trading below its
pivot.
Other recent breakouts you may wish to
follow as an indication of how things are shaping up include: Direct
Focus
(
DFXI |
Quote |
Chart |
News |
PowerRating), Verisity
(
VRST |
Quote |
Chart |
News |
PowerRating),
and DRS Technologies
(
DRS |
Quote |
Chart |
News |
PowerRating).
Children’s
Place Retail
(
PLCE |
Quote |
Chart |
News |
PowerRating) has been setting up in a four-month base,
but has yet to break through resistance.
Other stocks that have been setting up
include: Itron
(
ITRI |
Quote |
Chart |
News |
PowerRating), Movie
Gallery
(
MOVI |
Quote |
Chart |
News |
PowerRating), Krispy Kreme
(
KKD |
Quote |
Chart |
News |
PowerRating), Panera Bread
(
PNRA |
Quote |
Chart |
News |
PowerRating), Advent
Software
(
ADVS |
Quote |
Chart |
News |
PowerRating), Investors Financial
Services
(
IFIN |
Quote |
Chart |
News |
PowerRating) and HPL Technologies
(
HPLA |
Quote |
Chart |
News |
PowerRating).
At this point, we just need to await
growth to start following through and holding the breakout levels, rather than
trading below the pivot points so frequently.
Good Trading,