WANTED: Follow Through Day

 

According
to what I heard on CNBC today
, the markets will need some
unknown "event" that will ignite this market higher. Right
now the rallies we have seen have all been on light volume. What we
need is another O’Neil follow through day and our timing models to
change the lights from yellow to green.

I have come across plenty of
stocks in the tech sector with sloppy patterns, but fundamentally are
showing some signs of turnaround. Patience is key in this gam
e;
give time for these stocks to constructively set up and we will have
ample opportunities to reap the reward. 

Metro One Telecommunications
(MTON)
looks interesting. The stock is forming a mini-symmetrical triangle.
Earnings for the company have increased on a year over year comparison
(275%, 400%, 267% and 417%). Institutional holding is a little high
for my liking. Notice how the volatility is decreasing caution should
be heeded as it could move dramatically in either direction.

Apogee Enterprises (APOG)
is scaling up the right side of a multi-month cup. Earnings have
increased (161%, 314% and 184%) with the current quarter earnings
(ending May 01) increasing over last quarters earnings by 33%.

HealthSource (HRC)
which was mentioned in this column before reported earnings today
beating analyst estimates by a penny. The stock looks poised to take
out its pivot level on its 14 day handle. Volume was drying up when
the handle was forming.

The Ishares DJ Chemical
Index fund (IYD)
led the ETF’s higher by gaining 2.9% as it closed above its 20 period
moving average.

 In a close second was
the Morgan Stanley Internet Street Tracks (MII)
which tacked on 2.8%.

The WEBS- Hong Kong
Benchmark (EWH)
moved up 2.6% to close above its 20 period moving average however on
very low volume.

The Oil Services Holdrs (OIH)
lost a whopping 4.1% after pulling back off its lows. Volume was high
today and the close was weak. Look for additional downdraft in the
fund.

 Telecom Brasileiras (TBH)
shares closed lower 2.6%  as the WEBS-Mexico (EWW)
lost 1.9%.

Remember that all securities
are risky. In any trade, you should always reduce your risk by
adjusting position size and placing open protective stops
where
you will sell your long or cover your short in case the market turns
against you. For an introduction to combining price stops with
position sizing, see Loren’s lesson, Risky
Business.

Greg