Orderly First Pullbacks

April 20, 2001
Daniel Beighley

Stocks pulled back Friday in an orderly corrective manner from what had
become heavily overbought levels. The Nasdaq pulled back by about 1% Friday,
which really wasn’t that much of a pullback given Nasdaq’s 14% overall gain for
the week. Since the Nasdaq had pulled off a three-straight positive close win
streak, the Friday breather could likely help keep the apparent new uptrend
intact.

What also was constructive was the way several sectors held on to closes
above their 50-day moving averages. The SOX
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Internet Index
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continues, then these areas might be worthy of calls and call spreads as the
market pivots back into the direction of what might hold up as the new trend.