The market was back in rally mode on Thursday. The S&P and Dow were both able to climb back above their 200 day moving averages(DMAs). I hate to keep harping on these averages, but they are very important. As I mentioned on March 14th, I thought the indices would vacillate around their 200 DMAs because so many traders are focused on them. So far, it appears that those averages are turning into support, as opposed to the resistance they’ve been for most of the last 2 1/2 years. (The NASDAQ cleared its 200 DMA on March 17th.)
The next hurdle for the market will be to get over the ‘war rally’ highs of 3/21 and 4/7. Interestingly, the indices all closed near those highs. Those levels could prove difficult to pierce. I continue to think that we’ll need some catalyst, perhaps a great economic report, to get up moving solidly higher.
As for individual stocks, I see very little that I would be willing to buy right now because so many stocks are overbought. However, there have been some impressive moves based on earnings reports. Some huge gainers on Thursday were PLNR(+36%), BCGI(+25%), SNDK(+24%), and BRCM(+18%). I’ll be looking for more earnings movers to trade in the coming week, while I wait for a dip in the market as a whole.
