My Favorite Stock

• May 18, 2005
• Tim Truebenbach

And
just like that things are back on track!  Or are they?  The major
averages rallied strongly and closed with heavier volume.

 

 

 

Wednesday’s action resulted in
a blatant accumulation day. Most importantly, the S&P 500 and NASDAQ both find
themselves above both 50- and 200-day moving averages.  Healthy markets need to
have stocks trading above 200-day moving averages in the least.

 

The good news is that this
market has leadership!  Google (GOOG), my favorite stock, continues to
push higher. 

 

 

Chicago Mercantile Exchange
(CME) is setting up in a double-bottom base with a pivot point of 220.59.

 

 

Micro Systems (MCRS) and
Genentech (DNA) have solid uptrends in place following recent breakouts. 
This is a good time to spot strong stocks showing accumulation coupled with
earnings growth exceeding 20%.  These are the names that will advance the
quickest.  

 

One point to make is that this
market has been choppy since early 2004.  Since we know this and we have been
seeing strength, make sure you protect your downside with either options, stops
or proper money management.  Inevitably, we will trend higher, but it is
important to protect capital through any false signals.

 

Good Trading,

 

Tim