__________________________________
Walking into the new quarter, there is a bifurcation in the market with some stocks and sectors very extended, while others are searching for a bottom. Faced with that backdrop, I am inclined to look for an increasingly selective stock picker’s market in the short-term. Many issues in the Nasdaq Composite saw potent moves in the first quarter, climbing a rather steep wall of worry. As the growing acceptance of the bull has started to materialize, though, momentum has shown signs of slowing. Indeed, the market is usually going to do that which frustrates the majority. Just as the uptrend became too obvious to ignore (and fight), the price action has become increasingly devious, with false breakouts each of the past two Mondays.
Large cap technology, retail, and consumer discretionary plays are by and large extended here. Some are more extended than others, but I am still on watch for a “lock and roll” rotation down to the real estate sector, materials, and energy plays. Even within a given sector or index, there is room for rotation. As an example, contrast the weekly charts below of Apple to Amgen. The latter has been consolidating its initial 2012 thrust for several months now, while Apple is ripe for a short-term shakeout after running over bears and doubters for the past two hundred points.
__________________________________
__________________________________
__________________________________
DECK!!
nice post chess. curious what your thoughts are re: AMRN? Another biotech that has come in recently after a big move higher.
Thanks, John. However, out of respect for 12631 members I am to keep back and forth individual stock analysis for the service. I think biotechs are doing well in 2012 and should continue to.