Timothy J. Truebenbach is the
President of True Capital Management and general partner of True Capital
Partners LP, a hedge fund. He uses a disciplined model that trades on the
intermediate-term time frame. For a free trial to Tim's Nightly Stock Analysis
Report
click here or call
888-484-8220 ext. 1.
Don’t expect the market to rollover just yet! We remain in a
confirmed uptrend even after the heavy selling the market experienced on Monday.
Yesterday’s distribution day only added one more to the mix, which the current
rally could easily afford and possibly even needed.
Chart courtesy of
StockCharts.com
Chart courtesy of
StockCharts.com
The selling did seem to hit on the overall market and individual stocks in a
broad sense. Leading stocks like the New York Stock Exchange (NYX | news | PowerRating | PR Charts )
and Google (GOOG | news | PowerRating | PR Charts ) declined, but not to levels that would worry most
investors buying at the correct time.
Chart courtesy of
StockCharts.com
In fact, we would be hard-pressed to find a leading stock that came under real
pressure that would have us worried about the strength of the current rally.
Names like Copa (CPA | news | PowerRating | PR Charts ), First Marblehead (FMD | news | PowerRating | PR Charts ), Apple
(AAPL | news | PowerRating | PR Charts ) and Digital River (DRIV | news | PowerRating | PR Charts ) are examples of how leading
stocks are acting and attracting buyers when selling increased.
Chart courtesy of
StockCharts.com
It is never a good idea to buy a stock blindly that is pulling back in price,
but while watching for certain entry points that reduce risk and provide a sound
exit plan investors can do well into a pullback such as we are seeing. The
Put/Call ratio rose to over 1.0 and this is what I am speaking of when I say a
decline in prices is healthy for the market over the next few weeks and months.
It is a good thing to keep investors on edge to an extent. In the meanwhile,
this is a great time to make a list of quality stocks so that when they set up
properly they can be purchased correctly.
Enjoy your trading!
