This Is What A Confirmed Rally Would Look Like
The
market managed a meager rally on light volume today, but the signs
have already been laid out that this market is not one to be long right now.
The NASDAQ has been unable to
re-capture its 200-day moving average while the cyclical strength of the S&P 500
has held it just above its 200-day MA. At this point, it is best to take the
market day by day and see if it can establish a new, confirmed rally. There are
a few stocks setting up in the growth arena, but until we get better action out
of the overall market, it is best to sit on the sidelines. Nu Skin (NUS) is one
example, as it has shown accelerating sales and earnings growth and is working
through a flat base.
Qualcomm
(QCOM) has been an institutional favorite through this choppy market and has
etched out a double-bottom base formation. The company has been growing
earnings at a steady rate. Of course, any move in the stock will need the full
market’s support to contain the low-risk attribute I like to go after.
The biggest thing to do right
now is spend some time looking for sound companies under accumulation. These
stocks will provide a watch list to use if the market firms up. I am looking to
see if this market can post a confirmed rally evidenced by at least a 2% gain on
heavy and above-average volume. We need to see that the market can shift from
low-volume rallies and heavy volume declines (institutional selling and a
downtrend) to high-volume rallies and low-volume declines (institutional buying
and an uptrend.)
Tim Truebenbach