More Positive Signs
Happy New
Year! 2002 has already seen the market start off on a positive note.
The positive improvements that I have noticed in the market over the past few
months continue to show themselves as earnings season approaches. One positive
came from a day of accumulation in the major indices after lackluster holiday
trade.
The market’s trend of opening weak
and finishing strong was seen again yesterday. This is one of the key traits I
can recall that was evident from my young career in the early 1990s. The
Put-to-Call ratio remains in check. Bearish investment advisors upticked. The
CBOE volatility index has not succumbed to complacency after the recent gains
the market has shown. All of these indicators are pointing to nervous, skittish
investors that are necessary for a bull market to continue advancing.
How do we make money off this?
Patience is still important. The market continues to improve and eventually
growth stocks will be ready to offer profits on a more consistent basis. There
are still very few stocks to go after that really deserve strong attention, but
more and more stocks are forming solid bases and holding above their breakout
points in relation to stocks that are failing.
Christopher Banks
(
CHBS |
Quote |
Chart |
News |
PowerRating) gapped higher
on 12/21 and has successfully stayed above pivot point of 30.20.
Verisity
(
VRST |
Quote |
Chart |
News |
PowerRating) broke out on 12/27 and
is building on that move.
Krispy Kreme
(
KKD |
Quote |
Chart |
News |
PowerRating) has not been able
to run away, but it has held above its buy point of 42.15 for the past couple of
weeks.
First Horizon Pharmaceutical
(
FHRX |
Quote |
Chart |
News |
PowerRating)
was unable to build on its initial breakout.
The next example is why stops are so
important in limiting losses. Fair Isaac
(
FIC |
Quote |
Chart |
News |
PowerRating) is getting taken apart this
morning on negative news. FIC went through its pivot on 12/28, only to close
poorly and trade lower the following day…not the kind of breakout action
investors would like to see, and a sign of caution.
In the meanwhile, PEC Solutions
(
PECS |
Quote |
Chart |
News |
PowerRating)
is consolidating its recent advance and is currently setting up in a 5-week
base. Peoplesoft
(
PSFT |
Quote |
Chart |
News |
PowerRating) continues to work up the right side of its base.
Option Care
(
OPTN |
Quote |
Chart |
News |
PowerRating) is working up the
right side of its 5 ½-month base.
Direct Focus
(
DFXI |
Quote |
Chart |
News |
PowerRating) is working on the
handle of its multi-month base.
As the weeks and months progress, pay
close attention for very subtle improvements in the overall market, and quantity
and quality of stocks emerging from sound bases.
Good Trading,