This Stock Is Holding Up Well

• January 21, 2005
• Tim Truebenbach

Things
have not changed much with the market as it wades through its
correction.  But things are different with individual stocks.  The NASDAQ sold
off and pierced support at 2050, but volume came in lighter than yesterday.

 

 

Individual stocks have suffered
the brunt of the selling.  Names that had been holding up well, such as Bebe
and Chicago Mercantile Exchange (CME) have been pounded into submission. 
They can be seen below key areas of support as volume is coming in very heavy to
the downside.

 

 

Other names, such as Google
(GOOG) are holding up.  Typically, stocks that act well like this one indicates
strength that parlays into higher prices once the market’s rally resumes. 

 

 

Basing he action on price and
volume, it is difficult to tell what names will hang in there and which one’s
may turn into the next Ebay, which stand 30% off its high.  I do still believe
that this market is in a correction and not something more severe.  Whether or
not growth stocks make it out remains to be seen, but I do believe most will. 
Various names like Taser (TASR) appear to have topped and money would
probably be better served in names that are acting better.

 

Looking forward a few months,
this correction will have served as a buying opportunity, but the key is on
being in the right names.  If in doubt, ETF’s may provide the best answer for
now, but one thing is for certain, playing growth stocks is leading to
significant draw downs unless one is heavily diversified.

 

Tim Truebenbach