Conditions do not seem to be improving for the overall stock market. The market failed to build on Thursday’s retake of the NASDAQ’s 200dma. Instead, stocks pulled back unable to hold the morning’s open prices. Reversals to the downside are never a sign of strength. Volume did rise on the NYSE but ended lower on the NASDAQ avoiding its first day of distribution since the most recent follow through. New Highs did edge out New Lows but its far from dominating which is a troubling sign for the most recent confirmed rally. I can’t get terribly excited about this market especially when CNBC and other talking heads are screaming to buy!
There are very few opportunities out there to load up on a Monster Stock. Notice I did not say “stocks.” There simply are so few out there that I can not justify pouring a ton of capital to any stock. However, there is an intriguing chart out there that is not something I’d trade just yet. If you are into large cap stocks this one is certainly to take a closer look at!
The stock is….DELL, yes can you believe it? DELL is coming off its lows quite nicely and is turning into a bullish chart. Michael Dell has come back to his company and we are beginning to see the fruits of his “innovation.” Much like what Steve Jobs did for AAPL I believe Dell will do the same thing for DELL.
Innovation is a significant in put for a company to provide new and better products and services to its customers. Does DELL have a new iPod/iPhone? I am unaware but the chart pattern formed here is certainly signaling that Dell is doing something right at the company.
Here is the chart:
DELL certainly needs to give us some more indications that more institutions are buying into the stock. HOwever, it looks like the selling has already been completed and now buying interest can come into the stock.
I would be very weary of buying too much stock right here as the NASDAQ is having difficulties getting buying interest at its 200dma. There is no reason to be the hero in this market. It is best you do no harm to your account in order to be ready for the next bull market.
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