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This rally is for real

  • November 1, 2006
  • Tim Truebenbach

Timothy J. Truebenbach is the
President of True Capital Management and general partner of True Capital
Partners LP, a hedge fund. He uses a disciplined model that trades on the
intermediate-term time frame. For a free trial to Tim’s Nightly Stock Analysis
Report click here or call 888-484-8220 ext. 1.

The market remains in a confirmed uptrend, but we have been seeing a slight
pause in the action.

The indices have not pulled back much at all since the strong advance they have
seen since mid-August. For this reason, many leading growth names have continued
higher and higher without many pullbacks or offering new buying opportunities.

 



 

 

Apple
(
AAPL |
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PowerRating) was an exception, originally breaking out on 9/5 and pulling
back to its 50-day moving average from 9/27 to 10/18. This is a good example of
a place to add shares to a portfolio.

 

 

This rally has exhibited fantastic breadth, ranging from small-cap stocks to
large-cap, household names.   Exchange-related names such as International
Securities
(
ISE |
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PowerRating) or plastic firm Rogers
(
ROG |
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PowerRating) have been impressive names
along with the likes of Morgan Stanley
(
MS |
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PowerRating) and Franklin Resources
(
BEN |
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PowerRating).

 

 

We have even seen old leaders such as Cisco
(
CSCO |
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PowerRating) push to multi-year
highs.

 

 

For the most part, this rally is well in tact and other than a current pause or
a pullback if we are lucky; I would expect higher prices if all things remain
equal. We will constantly look to see if distribution creeps into the indices or
leading stocks start to have trouble holding 50-day moving averages.

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