The NASDAQ, S&P 500 and DOW continue to trade slightly below recent all-time highs, yet above their short-term 10-DMA’s, which is a sign of strength. Meanwhile, the Russell 2000 continues to trade sideways in a tight range above logical support which is considered healthy, constructive action.
More importantly, as time goes on, the list of healthy, constructive leadership continues to expand. From recent IPO’s to more established, well known names, there has been no shortage of new leadership rising to the surface over the last few weeks.
Also, it is worth noting that breakouts have been much more reliable over the last few weeks as well. This is an important change in character and at least part of the reason for the melt-up on the major market indexes.
So, which leaders should we be stalking right now? For starters, keep an eye on some of the recent IPO’s that have broken out or are getting ready to break out of IPO bases, or other early-stage base set-ups.
We would also focus heavily on the healthcare sector, more specifically the medical/biotech/genetics stocks. These stocks clearly exhibited enormous strength when the general market was under heavy selling pressure and now many of these names are on fire.
What about the software stocks? Well, it’s no secret that many of the beaten down software names have been moving powerfully up the right sides of their most recent bases. In general, the idea is to concentrate on the first ones to turn back up on heavy volume. However, it’s important to stick to the ones with the highest earnings and sales growth, that are in the process of forming constructive, early stage bases.
Continue to keep track of the strongest stocks in the strongest groups, with the best fundamentals. Set your alerts and be ready to buy these stocks as entry areas present themselves.
The NASDAQ finished the week slightly lower, yet above its short-term 10-DMA and just slightly below recent all-time highs, which is a sign of strength.
The Russell 2000 continues to hold up and trade sideways in a tight range above significant support, and is looking ready to follow the other major indexes to new all-time highs.
The S&P 500 finished the week slightly lower, yet above its short-term 10-DMA and just slightly below recent all-time highs, which is a sign of strength.
The DOW finished the week slightly lower, yet above its short-term 10-DMA and just slightly below recent all-time highs, which is a sign of strength.