These Stocks Continue To Find Institutional Support

The
S&P 500 re-captured its 50-day moving average on Tuesday and the
NASDAQ is not far behind.  Since 2005 began, the market has been in the midst
of a correction following its strong fourth quarter.

 

 

Individual stocks have done
what they normally do when the market succumbs to the selling pressure we have
seen: pull back in price.  The best thing about that is it allows them set up
and establish new base patterns.  Google (GOOG), for example, is using
the market’s newly found strength to push out of a 10-1/2 week cup and
high-handle base. 

 

 

Yahoo! (YHOO) is in
the seventh week of a double bottom base pattern, with a pivot point at 39. 
The stock reported blow-out numbers after Tuesday’s bell of 25 cents versus
the estimate of 11 cents.  This fundamental growth is what one should expect
out of a leading company.

 

 

Ebay saw a
steep decline as the stock may very well have formed the left side of a new
base.  If that is the case, it is rounding out the bottom before building back
up the right side.  The company reports earnings tomorrow after the close.

 

 

I specifically mentioned
these three stocks to demonstrate one more thing: excellent strength coming
out of the internets.

Despite all of the negative
news following December’s same-store reports, retailers (RTH) are still
hanging in there as the RTH’s re-captured their 50-day moving average.

 

 

It is a positive to see
strong breadth of leadership across the market.  Homebuilders still continue
to find institutional support as stocks like NVR and KBH are trading at or
near their highs.  This market is primed and ready to eventually continue
higher and it will pay to be invested in it.