Today was the most consequential in some time, especially since it came a day before the consumer price index report. While Tuesday was actually an O'Neil follow-through day in the Nasdaq, volume was only a sliver more than on Monday.
Today, however, price gapped up and over the 20 ema on decidedly better activity than on Tuesday, with a second day of good closes. Note the volume dry-up as price based for four sessions.
Although we do not value the FTD concept as highly as some because our focus is more on price as well as the action of the leading stocks, it is nonetheless a positive to see one.
While the averages are shaping up, the growth sector has much work to do to mend the technical damage of many of its components. Just because the averages are acting better does not mean we should be aggressive buyers.
Bill O'Neil has a rule that says you always want to buy something on an FTD. This, and the idea that the first stocks to emerge into new-high ground following a period of market weakness are often the market leaders on the ensuing advance, has us with two names on the Focus List.
For those interested, these should be considered pilot buys as a means of testing the waters. Subscribers can easily pass on these since they are not the type of dynamic growers that are our preference. They are on the Focus List for those more-aggressive subscribers seeking instant long exposure.
In a market in which so much in growth has been beaten down, it becomes much easier to pick out the stocks that are beginning to stand out from the crowd.
Our favored ETFs, TQQQ, SOXL, and TECL, might normally be of use right about now in order for us to obtain instant long exposure while we wait for the growth sector to provide opps. These, however, are not sufficiently above their 20 ema to offer an attractive reward/risk ratio.
The following names are believed to be the most attractive for our strategy of speculation in $13+ issues.
Cognizant Tech Solutions (CTSH)
In summation, the averages have improved. Let's be patient and let some of the charts on the Watch List further develop into actionable status.
Introduction to the service (38:00)
Money management and risk management (20:27)
Bread and butter pullback (11:10)
Bread and butter pullback: Pt II (15:09)
Bread and butter pullback: Pt III (31:48)
Bread and butter pullback: Pt IV (30:16)
Short-selling video (25:53)
Wyckoff spring setup (2:30)
5-minute breakup test (8:01)