What’s Needed Now

  • May 9, 2002
  • Tim Truebenbach

I could not possibly write today’s column without mentioning
Wednesday’s powerful rally, so here is what I have to say: One very big rally day that many
termed a “bounce” or “short-covering” 12.0pt;font-family:”Times New Roman”;mso-fareast-font-family:”Times New Roman”;
mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA”>— Wow! The
S&P 500
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PowerRating), Dow Jones Industrial Average
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were all looking for a fresh rally to begin and await confirmation

This begs the next question: What do we
look for next? The answer does not lie in microanalysis of every small detail At this time, my opinion is that I do not know how effective a rally would be, since we do not have much in the way of leadership
setting up and ready to explode. Many companies are working through their bases and have yet to form nice, pretty pivot points.
I will admit, though, that in the past there have been bull markets that have produced the individual stock leaders in the weeks and months following the beginning of the rally. For now, we simply need to see if any of the major averages can confirm yesterday’s rally over the next week.

Moving along to another aspect of growth investing, I have seen another positive that was lacking over the past two years. Fundamentally sound companies that have broken out of a solid base have continued to push higher. We all know about the homebuilders, but another name I recently spotted was
Christopher Banks
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PowerRating). From ROE over 37% to a 56% annual growth rate, this firm has a strong fundamental showing. On April 4, the stock broke out of a
three-month base on heavy trade. Since then, it has not violated its support and has pushed higher.

For now, the environment remains pretty slow but may be ready to pick up over the next few weeks. Over the weekend, it will be a good idea to work on a laundry list of stocks in the event we get a follow-through day on Wednesday’s move.

Until Tuesday,


TimT@tradingmarkets.com