This Stock Just Keeps Punching Higher

  • January 22, 2004
  • Tim Truebenbach

The
rally that began in late-December may be entering
a corrective phase, based on the information we have seen recently. The major
indices have made huge moves off their most recent base patterns and are extended
past their 50-day moving averages. Price and volume still indicate a very healthy
market, so I wouldn’t get over-concerned.

image src=”https://tradingmarkets.com/media/2004/Tim/tt012204-01.gif” />

image src=”https://tradingmarkets.com/media/2004/Tim/tt012204-02.gif” />

Growth stocks have been
the biggest indication of a possible consolidation. One warning was that every
single stock that set up to break out did so and made huge moves. Breakouts
became a “Sure Thing” over the past two weeks.

^next^

Too good to be true for
long! American Pharma
(
APPX |
Quote |
Chart |
News |
PowerRating)
was the first chink in the armor, as it made a nice move yesterday through a
pivot point at 39.40 and gave that back today.

image src=”https://tradingmarkets.com/media/2004/Tim/tt012204-03.gif” />

Instead of moving higher,
we’re seeing a few early breakouts start to pullback. World
Acceptance
(
WRLD |
Quote |
Chart |
News |
PowerRating) is an example, as it took a hit on volume
today.

image src=”https://tradingmarkets.com/media/2004/Tim/tt012204-04.gif” />

O2
Micro
(
OIIM |
Quote |
Chart |
News |
PowerRating) came close to bursting through resistance
at 26 on heavy volume, but turned tail and is now testing its 50-day moving
average.

image src=”https://tradingmarkets.com/media/2004/Tim/tt012204-05.gif” />

These are not bad signs,
but good signs, in my mind. A good rally needs a correction before it can make
further progress. There are many leaders which have firmly stated that they
are willing to lead this market higher. Netflix

(
NFLX |
Quote |
Chart |
News |
PowerRating) is one such name as it announced stellar earnings recently. The
stock disregarded most growth action and punched higher today.

image src=”https://tradingmarkets.com/media/2004/Tim/tt012204-06.gif” />

The market may need some
time to pullback and/or consolidate, but in the intermediate-term, or over the
next few weeks and months we are most likely headed higher unless something
changes.

Enjoy one restful weekend
before The Big Game!

Tim Truebenbach

timt@tradingmarkets.com