These Stocks Could Be In The Early Stages Of An Advance

  • August 3, 2005
  • Tim Truebenbach


Everyone that reads my commentary knows that I feel the point of
2,200 for the NASDAQ is major resistance.  In Tuesday’s trading, we saw prices
close above this level, although volume did not really confirm the move.

 

As much as I would like to
say buy everything in sigh, it just is not prudent right here.  Based on the
low volume and the fact that the NASDAQ is extended (6 “up” weeks in a row) we
should be keeping a keen eye for a pullback and consolidations in leading
stocks.

 

Some of them have already
begun pulling back and/or consolidating.  GOOG recently held its 50-day moving
average, although we’re seeing well below-average volume as it bounces.

 

 

 

 

The Chicago Mercantile
Exchange (CME) has managed several weeks of tight closes and seems to be
getting pulled higher by the market whether it likes it or not.

 

 

Bebe broke out of a very long
base pattern that dated back to April of 1999 in October of 2004.  The stock
has doubled and is currently consolidating. 

 

 

Could the NASDAQ rip to 2,800
or 3,000 from here? Sure. But there is a stronger likelihood that it will
pullback first and then proceed higher.  We have a good number of leading
stocks.  These are companies that are growing earnings at a strong rate and
have many consumer-oriented traits.  Apple Computer (AAPL) is another name
that may very well be in the early stages of the market’s advance.  Take a
look at a monthly chart, and you will see what I mean.

 

Good Trading!

 

Tim Truebenbach