Movers & Shakers

 
We continue to see more and more positive evidence. We received an intermediate-term buy signal back in early-ish October, and last week, even our longer-term trend-following measures turned bullish. Moreover, every week brings another handful of leading stocks that emerge, usually on earnings, which is another bright spot.

Even better, many of the leaders that have recently lifted off are very liquid (well-traded with great institutional sponsorship), have great sales and earnings growth and big earnings estimates for 2016 and beyond. In other words, just the kind of stocks that can make big moves and lead the market nicely higher.

On the negative side of the fence, there remain some things to monitor. The advance remains narrow; small- and mid-cap indexes continue to lag their bigger-cap peers and the broader market is still trying to get its head above water. For instance, as of Thursday’s close, an amazing 60% of stocks on the NYSE and Nasdaq were still below their 200-day moving averages.

Plus, looking at individual stocks, there are still many potholes—while many leaders have emerged, lots of promising stocks have broken down during the past three weeks, too.

Those factors are probably a reason not to lean too far in front of your skis; stock selection is very important in this environment, so you need to buy the best and leave the rest. But, overall, there’s definitely more positive evidence than negative evidence, so you should look to slowly extend your lines as either more leaders emerge or established leading stocks pull back a bit.

 
This is an excerpt from Cabot Top Ten Trader, which features the best trades to make every week.  Designed for experienced investors who want even more great growth stock ideas, this advisory recommends the best 10 stocks each month for short-term investment by aggressive growth investors.

Michael Cintolo is Cabot's Vice President of Investments and Chief Analyst of Cabot Growth Investor and Cabot Top Ten Trader. To read customer reviews of Cabot Top Ten Trader, click here. To read reviews of Cabot Growth Investor, click here.


Michael Cintolo can be found on Google Plus.

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Weibo

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