The Biggest Dilemma
Volume is
running extremely high on this Thursday
of trading, as institutions fulfill their appetite to own stocks.Â
As long as we close at these levels, there is no doubt that this market
is under solid accumulation.
The biggest dilemma has been
in finding solid growth stocks preparing to break out out towards all-time
highs. There have been a few here
and there, but most of the action has been sporadic and has made it very hard
to stay with a company without exposing oneself to far too much risk.
Symantec
(
SYMC |
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Chart |
News |
PowerRating) comes to mind as my first example. The
stock hails from the #2 group, Computer Software-Security.Â
The attempted breakout came on 11/14 as it pierced through the pivot on
below-average volume. It fell
apart, but has since recovered to new highs.
Â
Hotels.com
(
ROOM |
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Chart |
News |
PowerRating) is another stock that
initially broke out on below-average volume, only to come on strong with today’s
rally in the market.
Then we move along to a stock
all of us would have loved to own, but have faced problems with enough thinly
traded issues before to avoid Lannett Company
(
LCI |
Quote |
Chart |
News |
PowerRating).Â
This stock’s average volume is 52,500 shares as of today.Â
When it broke out on 10/30, the average volume was well below this
amount.
Scansource
(
SCSC |
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Chart |
News |
PowerRating)Â is stock with a little better average of almost 100,000
shares a day. This name chopped
around its ideal buy point of 70.90 for a couple of days before pushing
substantially higher today.Â
Â
Sure there are stocks that
look like they are almost good enough. But
one thing I have learned over the years is that if all pieces of the puzzle
don’t fall into place, it’s not worth the risk. At
best, it will result in a few profits only to be given back with losses when
things correct.Â
The market is acting very
well, and if it continues, we will see plenty of names to go after. Nothing
goes straight up, unless it’s about to end.Â
Leaders like Forest Labs
(
FRX |
Quote |
Chart |
News |
PowerRating)
will consolidate and find support off their 50-day moving averages and allow
us an entry if this market is the newest Bull Market.
With the recent run-up in the
major averages, sentiment has gotten pretty bullish. Now
is the time to be careful and make sure that downside is protected with stops
or by taking partial profits. We
very well may continue higher, but as soon as the market begins to produce
solid setups, we will play catch-up very quickly for any gains that we have
had to let go by, as the market proves itself.
Spend this weekend sifting
through stocks and leading groups. If
names are going to start appearing, we’ll find them the old-fashioned way…by
looking through the market. Pay
special attention to the following groups: INTERNET,
MEDICAL, LEISURE and COMPUTER SOFTWARE.
Have a great weekend!