This Group Is Producing The Best Names Right Now
If you’re not making some
money right now, then you haven’t been reading this column or
been successful in finding the stocks to buy! The major averages have acted flawless in terms of evolving from a
three-year bear market to a new Bull Market.Â
I would accept the market’s action if we saw a day or
two of higher-volume declines or lower volume rallies, but day in day out, we
are seeing the market rally on heavy volume. The people that control most of the money in the market, institutional
dollars, are pouring into the market and it has not let up or stopped, as of
today’s close. Once again,
Thursday’s trading saw the major indices finish higher on heavier volume
than the previous day and on
above-average trade.
The only argument to stay out of this market has been in
regards to the excessive Investor’s Intelligence Bulls. This is a secondary indicator and obviously is only doing one thing
correctly for anyone following it: keeping them out of good stocks.Â
By good stocks, I am referring to names like
UT Starcom
(
UTSI |
Quote |
Chart |
News |
PowerRating). Telecom stocks and the group as a whole have moved up to the top of all
industry groups I follow. It is
joined by Internet, Medical and homebuilding stocks.
These groups are producing the best names right now.Â
Leisure and Gaming stocks have been setting up to move
higher in recent weeks. Penn
National Gaming
(
PENN |
Quote |
Chart |
News |
PowerRating) and Shuffle Master
(
SHFL |
Quote |
Chart |
News |
PowerRating) are two companies that come
to mind. Both companies have
solid double-digit growth rates and firm fundamentals.Â
In the trading days ahead, it pays to keep an eye on price and volume
for signs of trouble.
Stocks have been moving higher in a nice, stair-stepping
fashion. This action is healthy
and in a good market, often leads to higher prices. University
of
Phoenix
(
UOPX |
Quote |
Chart |
News |
PowerRating) has been a prime example.
As stocks like Hi Tech Pharmaceutical
(
HITK |
Quote |
Chart |
News |
PowerRating) exhaust
current run-ups, it may very well pay to keep close tabs on price and volume
as these stocks consolidate or decline to their 50-day moving averages.Â
If a stock exhibits healthy, light-volume action, it may offer a good
entry point.
J2 Global
(
JCOM |
Quote |
Chart |
News |
PowerRating) defied all logic and moved sharply
higher yesterday, following an uncertain pullback. The stock undercut its 50-day moving average as volume was
increasing on 5/6 and 5/7. Even though this stock pushed higher, it is a good example of what we don’t want to see on a pullback.
We are in a good market right now and it will pay to
believe in the evidence we have already seen. When making investments, continually honor stops and know where losses
are going to get cut before putting on the trade.
Have a great weekend,