This Market Should Be Owned, But Here’s The Strategy

In
this column, we have been very bullish for the past couple of months. 
The biggest objective has been to put money to work in the market,
particularly the NASDAQ. 

 

 

We have seen this index
advance in price over the past nine days or so and as much as we are most
likely going higher, it is important to exhibit some patience and not buy into
the frenzy.  We are overbought and a pullback may occur to allow entries. 
Monday’s trading proved healthy as the market closed flat on lower volume than
Friday.

Leading stocks have come from
a number of sectors and include Software (SWH), Internets (HHH), Retail (RTH),
Telecom and Wireless (TTH & WMH) and of course the NASDAQ-100 (QQQ).

 

 

Google (GOOG)
received a downgrade and price target of around $160 while Yahoo! (YHOO)
and Ebay received upgrades and price targets of $50 and $130,
respectively.

 

 

^next^

What do things like this
mean?  Absolutely nothing.  Analyst comments can be used to buy or sell into,
but investors should watch a stock’s price and volume action for clues as to
what to do rather than join a person’s recommendation that does not even trade
stocks.  For the time being, we remain in watch-and-wait mode.  Based on the
accumulation we have seen from institutions, this market should be owned, but
doing it as stocks pullback to areas of support or break above resistance is
the best way to do it.

Recently, Resources
Connection (RECN) broke out but has been unable to produce gains through
its pivot point of 43.53.

 

 

On the other hand, S I
International (SINT) pushed through its Buy Point of 27.35 on
above-average volume and has returned a small profit in only a few days.

 

 

Whatever your style may be,
the market is worth paying attention to and it will most likely give you an
entry you’ll be happy with. 

Due to a travel conflict,
this column will not appear Thursday, but will return to its regular schedule
next week.  Enjoy your week!

Tim Truebenbach