We Have Two Choices
For
the past two weeks, I arrive at my desk around 6:00 a.m. and before I
run through my morning routine, I am faced with the same question: Which of two
things is going to happen next? The two things are: #1, quality stocks begin to
break out and make us some money, or #2, the market begins to fall apart. Sooner
or later, one of these scenarios will unfold. A market does not rally without
quality leadership forever.
Taro
(
TARO |
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News |
PowerRating) broke out of its base
yesterday, but it is running into trouble already. Volume is approaching
yesterday’s level and the stock has reversed from positive to negative. If it
were to close in positive territory, a bit of salvation would be provided. The
stock did manage to break past its pivot on phenomenal volume, which it was
unable to do on 10/25, so that is a step in the right direction.
Bradley Pharmaceuticals
(
BPRX |
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Chart |
News |
PowerRating)
has shaken the bout of selling and has begun what looks to be another leg
higher. Our other success story, Multimedia Games
(
MGAM |
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Chart |
News |
PowerRating) has managed to hang
in there, despite a somewhat shaky close yesterday. Other than these two, there
isn’t much that comes close to something worth talking about. Most of the
current rally has been represented by stocks 50%-90% from their highs with
lagging fundamentals. In my opinion, these companies do not present very
favorable risk:reward situations.
The ever-so-popular Krispy Kreme
Doughnuts
(
KKD |
Quote |
Chart |
News |
PowerRating)
attempted a move toward its pivot this morning, but the stock lacked the volume
to support it.
Sorry to be so brief, but it’s that
kind of market. Feel free to pepper me with questions, and I will incorporate
what I can into the column on Tuesday.
Have a great weekend!