More Healthy Signs
The overall market is acting superb!
Today’s declines all came on lighter volume than yesterday. This gives
the market a chance:
-
to digest recent
gains -
for volatility to
increase, as measured through the
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PowerRating), and -
for bearish sentiment to increase.Â
We are also seeing the healthy sign of more new highs than new lows.
 
Periods such as this are where we have an easy
opportunity to identify the truly strong stocks in the market.
Pixar
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PowerRating) is an example of a stock that bucked today’s trend with
a positive close. After its
recent move, it has given up very little ground so far.Â
It’s always a good idea to check its group, Leisure-Movies, for other
names that may be showing strength.
 
If we are in a new Bull Market, our goal lies in making
investments in solid companies at the least risky of times.
If you have been practicing a similar strategy to the one that I follow, you do
not have large losses to recover. If
you are new to this investment philosophy and do have some losses, there is no
rush in recovering them until the right opportunities appear. When that happens, money will be there for the taking.
Rushing into a stock simply because it is going up, and
not following the rules, can lead to situations like Hotels.com
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PowerRating). I actually owned the stock through its pivot of 64.50, but over the
next few days I was not seeing above-average volume support the move.
I sold the stock for a meager couple of points as it marched higher on
light trade. In two short days,
it has declined lower than my sale price because reality finally set in that
stocks can’t go very far without volume.
At this time, watch the daily averages and track stocks
that are setting up in bases. The
longer this market hangs in there, the closer we are going to get to some very
solid trades and investments.
Have a Great Weekend!