This Is Where I See Continued Strength
The
leading Nasdaq showed its usual strength as the index refused
to decline, despite drags on the Dow. Volume came in lighter on both the Nasdaq
and NYSE as the indices consolidated recent gains.
For the most part, the market
is very healthy and internal factors remain very strong. The Internet stocks,
along with various medical names, are providing leadership that could very well
carry us much higher. Yahoo!
(
YHOO |
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PowerRating) is an example as it provided us with
excellent earnings and guidance a week ago. Since then, the stock has not given
much ground after gapping higher on 10/9.
If this market was going
to roll over or if we were in a bear-market bounce, you sure would not see the
underlying strength we had after the Intel
(
INTC |
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PowerRating) earnings announcement.
The market had already moved up nicely in early October when INTC announced
solid earnings and guidance. The Semis appeared ready to take the market much
higher the next day. Instead, the overbought conditions prevailed as most things
left a tail on the session, including the major indices.
A tail is when a security
closes at or very close to the low for the day. When this comes on heavy volume,
it can be construed as a potentially bad thing. Rather than selling off and
causing real damage, we saw the market absorb the selling consolidate on lower
volume today.
Marvel Technology
(
MRVL |
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PowerRating)
continues hang in there. The stock has been in front of me for months now and
still appears to be under accumulation. The only problem has been its inability
to clear a current base with breakout points around 43.60 and 44.08. The stock’s
next above-average move may indicate its near-term destination.
Continue to hone in stocks
that ARE setting up in leading groups such as Internets, medicals and select
consumer names. Chicos FAS
(
CHS |
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PowerRating) broke out through 33.94 on 10/9 and has
yet to correct. It has been an example of where money is flowing in this market.
Look for volume clues along
with price action to pick your stocks and your spots. High volume increases
increase accumulation along with low-volume pullbacks.
Have a great weekend!
timt@tradingmarkets.com