Why Finding The Quality Companies Now Will Pay Off Later
It’s beginning to feel like a
Bull Market! Volume came in
heavier in Tuesday’s trading as the major indices finished the session at or
near their daily highs.
The market seems to have stabilized after the bouts with
distribution we have seen over the past week and a half. Tuesday’s action had many opportunities to cave in, but we still
managed to rally into the close.
Wednesday’s action should be very exciting because of
the Intel
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QQQ’s
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in the after-hours session, just when investors seemed not to be expecting it.
Individual stocks have been another sign that we’re in
a Bull Market. We have seen numerous
growth stocks push to new all-time or 52-week highs over the past month.
Ultimately, their success is the final indicator of a healthy market.
The internet and medical sectors have produced the market’s early
leadership. We have seen stocks move to
20% gains and indicate that there may very well be sustainable moves
beginning.
EBay
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an early name out of the gates and continues to hold strong.
It showed some selling pressure after its run-up on 3/31, but has since
digested the distribution without rolling over.
Companies with stellar earnings growth and other strong
fundamental traits such as ROE have led the charge.
Hi Tech Pharmaceutical
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and United Online
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examples of recent leaders.
Right now is the time to find stocks that fit a solid set
of rules. Look for companies that
meet certain fundamental standards such as quarterly earnings growth rates.
These are going to go up the most if the market remains under
accumulation. The best time to
buy these stocks is as they move above resistance from solid technical
patterns.
Tuesday’s breakout in Martek
Bioscience
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The company has produced two recent quarters of triple digit earnings
growth from the year-ago quarters. It
began a base in April of 2002 and moved through the handle portion of the base
on heavy volume.
During market rallies, we may see the averages and
breakouts take a break from time to time.
This is what we saw over the past couple of weeks and it is a good
thing that allows more stocks to set up.
Biovail
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example of a stock working up the right side of its base.
Wednesday will be a very exciting day.
Naturally, the reversal we suffered on 4/7 will be on everyone’s
minds if we open up very high. We’ll
be looking to see if the market can close sharply higher on heavy volume.
This is a blatant sign that institutions are buying stocks and will
fuel a further advance.
This is a great time to consider quality growth stocks
for investing and trading.
Until Thursday,