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To be able to marry impressive growth with strong buy volume and price action in stocks is a nice, convenient bonus for swing traders. Inside The PPT, I created a screen called, “Bull Market Beasts,” where I monitor stocks with extraordinary fundamentals of “growth firms,” with respect to profit margin, return on equity, as well as quarterly earnings and revenue growth. Member of The PPT and 12631 can click here to view and save that screen.
Looking over the screen after this past week, I see several of the most impressive growing firms that happened to have seen strong buying volume during the recent rally. What that tells me is that buyers of size see real value at these levels. Also note that a common gripe with the rally over rough the past two weeks has been the overall lack of broad market volume. To my eye, this reinforces the idea that the big money is selective in where it is going, but you had better pay attention to which names are getting the action. If this is, in fact, a major market bottom, then you can be sure traders will soon be scrambling to find the best of the best for the next leg higher, and I guarantee you will see many new faces that are leading the charge from last year’s rally off the bottom.
A few that jump off the current list: BSFT CPE KLAC. By now, you probably know my stance on the market is that I will not become aggressively long until we consolidate and/or make a higher low as charts across the board firm up. That logic also applies to these names, in that I am looking for a respite before getting involved. The market might cooperate with that scenario or it might keep going vertical. I have no control over that. What I do have control over is where I pick quality entry points to deploy capital.
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