Why This Is A Great Time To Own Stocks

  • December 2, 2004
  • Tim Truebenbach

What can I say…we’re in a Bull Market!  The market spent
Thursday’s session consolidating the large gains of yesterday, although volume
did come in higher on the NASDAQ.  One simple explanation for this could have
been that we were running into some serious resistance from January of 2004
around 2150.

 

 

Back in late-September/early-October when I became
overwhelmingly bullish, there is one thing I mentioned that is about to proven
true tomorrow: the market may advance quite rapidly in the beginning stages of
this rally.  Intel (INTC) raised forecasts after the bell today, and that
looks to be spilling over into the broad market.  The NASDAQ-100 (QQQQ) is
trading up about 60 cents, or 1.5% as I punch out this column.  I admit that
this market seems extended as it has made quite a run up to this point, but
let me explain why I believe it is still going much higher.

If we successfully clear resistance around 2,150,
overhead supply, more commonly known as sellers, does not kick in again until
just over 2,300 on the NASDAQ.  This market has pulled back or consolidated in
very healthy fashion at key resistance, and this usually paves the way for
higher prices.

The next most important thing to higher prices is the
action out of leading growth stocks.  While the NASDAQ has been plugging
higher, we have been watching continuous rotation among the different sectors
that have been leading this rally.  Internet stocks took a breather as top
names like Yahoo! (YHOO) and Google (GOOG) have paused, while
computer and iPod maker: Apple (AAPL) pushed higher.  It now appears
this simple explanation continues as internets advance and AAPL is seen
pulling back.

 

 

In yesterday’s trading, we saw the continuance of
breakouts.  Resources Connection (RECN) pushed through a pivot point at
46.56 and followed-through in today’s session.  One main point about this
company is that it sports triple-digit earnings growth, not exactly a lagging
fundamental among its peers.

 

 

This market has proven its accumulation as well as its
leadership.  This is a great time to own stocks or be quick about getting in. 

Good Trading and enjoy the weekend!