This Stock Stood Up Well–Until Today
Further distribution on the indices–or
evidence of professional selling–is not helping the overall health of the stock
market or individual stocks.
Taser
(
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PowerRating) has been a growth stock that has withstood the market’s corrections
over the last year and continued to rise…until today.
This stock put in
its third action of what appeared to be a climax top recently. The first one
came as it traded on 2/12; the second was at the end of March on 3/31 and the
third occurred yesterday as the stock closed off its intraday highs. This was
the last remaining stock to take a hit as most other names have felt the
market’s pressure and failed to perform that have been doing well for about a
year now. Examples include Netflix
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PowerRating),
Chinese Internet names such as Sina
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SINA |
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PowerRating)
and Sohu
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SOHU |
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PowerRating), among others
^next^
This market has
thrown very conflicting signals since mid-summer 2003. We have seen strong
action immediately followed by sell-offs. Distribution, or professional selling,
has quickly led to new highs in the indices. Overall, there has been very little
clarity in this market other than it does appear to be moving higher in an
extremely dangerous and choppy manner.Â
For now, the best
thing to do is use tight stops to any positions, long or short. If the indices
appear to be holding major areas of support such as the
Nasdaq did on 3/22 to 3/24 at its 200-day moving average, then
look for ETFs or stocks to go long. One consistent thing that has not worked of
late has been to buy into strength. Sanderson Farms
(
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PowerRating) provides a recent example as it broke out through 39.37, only to
fall apart on 4/14 in a very quick move downward.
If you are wondering what to do right
now; searching for very strong companies is key. Look for names that will be
around ten years from now and are the strongest in their particular industry.
These are the names to home in on when they display weakness. Finally, let
setups and trades come to you because chasing after things has not worked in
this market.
timt@tradingmarkets.com