What to look for in the weeks ahead
Timothy J. Truebenbach is the
President of True Capital Management and general partner of True Capital
Partners LP, a hedge fund. He uses a disciplined model that trades on the
intermediate-term time frame. For a free trial to Tim’s Nightly Stock Analysis
Report
click here or call
888-484-8220 ext. 1.
The market saw a nice, sharp rally in Thursday’s trading. The
rally came a little late to give us the confirmed rally we were looking for
because most follow-through days occur on the fourth to seventh days of an
attempted rally and this one was the twelfth day.
Does this delayed confirmation mean the rally can’t work? Absolutely not, it
does mean that its chances of success are less. The current reaction to the Fed
news to hike rates and slightly alter their policy statement seems like a sell
on the rumor, buy on the news occurrence fueled by a short squeeze.
Many long-time readers of this column know that it is the last to claim a bias
to the long or short, bullish or bearish sides of the market. We follow price
and volume and call it as we see it and have been very accurate for the past six
years in doing so. We advocate buying stocks when the market is seeing
institutional dollars flowing into it and remaining in cash when the market is
in a downtrend or uncertain environment. Rather than jumping on a 1-day rally it
is important to take a few notes first.
There are very few quality growth companies setting up in sound base patterns.
Alliance Data
(
ADS |
Quote |
Chart |
News |
PowerRating) is one example of what we want to see more of.
The stocks has formed a base on base pattern and attempted to break out in
today’s trading through a buy point of 57.09. Volume was a little light for an
attempted breakout.
The more set-ups we see the better. It is important for a longer-term rally to
have strong leadership to propel it higher. We will keep tabs on anything new
setting up and the continued health of the market in upcoming weeks. For now, it
appears best to play it safe and tread lightly if you tread at all.
Have a Happy and Safe Independence Day…God Bless America!