Online Stock Trading | Leaders remain strong despite the weak overall market

Leaders remain strong despite the weak overall market


Filed Under Market Commentary |

Volume continues to be the story for me, lower volume has accompanied the latest round of price increases.  The market has continued with the V-shape move it started last Friday.  In order to squash this type of extreme move the market must move sideways a few more days.  Tuesday marked Day 4 for an attempted rally to notch a follow-through day.  Although market leaders were strong, the overall market continues to be moving higher on lighter trade in a V-shape manner.  I still do not see a strong possiblity that the market sees a follow-through day within the 4-7 day time period.  Let’s continue with the boring play of staying on the sidelines.

Some leaders moving higher; DKS, BIDU, RIMM, & AAPL.  Let’s breakdown their action over the past few weeks. 

DKS enjoyed a surge off its 50dma with tremendous volume.  However, its move off its most recent sell off is V-shaped.  This pattern most often signals trouble for a stock as it moves higher in whipsaw action.  DKS will most likely try for those August highs but, far to risky to make a play with the move its made.

BIDU is making a better move off its 50dma.  Although not as extreme as DKS, BIDU did put in a V-shape move its just not as dramatic.  Given the shape of the move, I am sure this stock will want to test its all-time high area but, I am not confident it’ll be a long lasting move above its all-time high. Volume still remains bullish, even considering last Thursday’s action in the stock.  Look for BIDU’s action when it reaches that all-time high area.

RIMM continues to be a strong stock.  Its ability to reach out to the Chinese market can help this stock continue to improve its growth numbers.  Like what we are seeing with other leaders, RIMM has made a V-shape move from last Thursday’s trade.  This type of action is signalling HIGHLY emotional trading from market participants.  However, RIMM hit some new highs on declining volume but still strong nonetheless.

No we’ve come to AAPL.  The darling stock over the past few years!  As of now, AAPL is just sitting below its 50dma.  What we are going to pay attention here is the action where it sits right here.  Tuesday’s volume showed that the stock may have the ability to get over its 50dma.  However, any failure on volume will suggest that the strength to re-take its 50dma is diminishing.

Leaders are where your attention should be focused on.  If the market follows-through we must see these stocks remain strong.  You do not go into battle with the cavilary leading the effort.  The market will need its leaders to show the path of higher stock prices. 

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