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Strategies & Market Trends : Drillbits & Bottlerockets -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (13953)	6/5/2001 6:09:59 AM
From: Rich1	Read Replies (1) \| Respond to of 15481

Todays IBD Big Picture... The Big Picture Tuesday, June 5, 2001 Printer-Ready Version Small Stocks Lead Market's Advance Investor's Business Daily Smaller stocks led the market through a quiet trading session Monday. The Nasdaq, S&P 500 and Dow industrials climbed anywhere from 0.3% to 0.6% in some of the lightest volume of the year. But while the big averages meandered, investors found plenty of action in small- and mid-cap stocks. The small-cap Russell 2000 gained 1.1%. The S&P MidCap 400 added 0.7%. Even better, more than a few stocks broke out to new highs. Other recent movers continued higher or prepared for another advance. Direct Focus (DFXI) burst out of a five-week consolidation that had formed on top of its previous three-month base. Shares of the direct marketer of Bowflex and Nautilus fitness equipment gapped up and rallied 3.87 to 38.50 in five times normal volume. The stock gets an A Rating from the IBD Stock Checkup at investors.com. Direct Focus is rated best in its group based on its Overall, Technical, Fundamental and Attractiveness Ranks. Its group, Leisure-Products, is its weakest link. Leisure-Products comes in at No. 109 out of 197 IBD industry groups. But it’s a hodgepodge of companies. The other top firms in the group run the gamut from sport sunglasses maker Oakley (OO) to motorcycle manufacturer Harley-Davidson (HDI). Direct Focus’ trading pattern showed up in a number of other stocks. One was Copart (CPRT), which auctions salvaged cars. The stock added 0.83 to a new high of 25.73 as volume swelled 475% above normal. It cleared a short consolidation that followed a breakout attempt in early April. Many smaller stocks staged breakouts in the weeks after the market bottomed. More than a few have run up 20% to 50% or more. But others paused as the market traded largely sideways in recent weeks. Each day it seems a few more resume their delayed advances. Smaller stocks have flexed their leadership even though the Nasdaq is no higher than it was a day after the Fed’s April rate cut. The Dow and S&P 500 are a little higher, although not by much. But growth investors who are focused on fundamentally strong stocks breaking out to new highs should easily be outperforming the broad market. Some readers have questioned whether we’re in a new bull market. In some ways, it’s an irrelevant debate. Just look at the facts. The major averages followed through repeatedly in April, the Fed cut rates twice since then and plenty of small- and mid-cap stocks are breaking out and running higher. True, some of those breakouts have stalled or failed. But if you cut your losses quickly and focus on what’s working, there’s plenty of opportunity right now. The major averages have risen the past three days in lighter volume compared with the selling earlier last week. You’d like to see the opposite, with the market pulling back in lighter volume and rallying in heavier trading. But as long as the averages hold up and leading stocks perform well, it’s a market in which you can profit. Label it whatever you like.