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Going into today's session we have had three follow
-through days and today we had a nice move in the broader markets on high volume once again. Although we have seen impressive moves, the fact remains the major trend is still down. If you checked out Boucher's New High/New Lows list, there still is no clear leadership. So at this point what am I doing?Well, I have a nice list of stocks that meet my fundamental criteria on the long side and will continue to watch these stocks as they become more technically appropriate. I also have a list that are potential short candidates that meet the my shorting criteria and I will continue to monitor these until they too become technically appropriate. So at this time I would suggest review our lists and continue to scan them to see if they are setting up any potential trades in for the near future.
One such stock is Biomet (BMET) which looks pretty good on a technical and fundamental basis. It appears that BMET is forming a handle to go along with its 10 week base. (It actually broke above its pivot point of a multi week double bottom on 9/28/01 on very good volume). Earnings have been steady (12%, 24%,16% and 17%) with a so-so 5 year growth rate of 17%.
Spectralink (SLNK) is looking interesting. I mentioned this stock a while back in this column. The telecom equipment stock is forming mini-cup with handle pattern on a daily basis.
On a weekly chart it also looks nice, the stock is forming a multi-month cup with handle.
Looking at the ETFs the Oil Services HOLDRs (OIH) looks poised to resume its trend down after pulling away from its lows.
Remember that all securities are risky. In any trade, you should always reduce your risk by adjusting position size and placing open protective stops where you will sell your long or cover your short in case the market turns against you. For an introduction to combining price stops with position sizing, see Loren's lesson, Risky Business.
Greg
