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William J. O'Neil
Chairman & Founder
Investor's Business Daily
Was Thursday, Sept. 28, a follow-through day of a new rally?
- Submitted from
Evergreen, Colo.
This is a bit tricky, because it depends on whether you call Friday, Sept. 22, the first day of a rally even though the market closed lower. It appears that since that day (when the market was shaken by bad news from Intel) was a big-volume intraday reversal to the upside, it was indeed a rally day. Monday, Tuesday and Wednesday of last week the Nasdaq sold off each day on increasing volume. But the key thing here is that each day the Nasdaq went down less and less. This heavy volume without significant further price progress downward is a subtle sign of supporting action at these levels. This may not be a classic follow-through day that will start off a roaring bull market, but it appears to be a valid follow-through nonetheless. It may take a few more weeks of whipsaw action before we really get going, so remember to focus on buying leading stocks with all key characteristics of strength, just as they are breaking out of sound bases. And always cut your losses quickly if your stock falls 8% from your buy point.
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