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Strategies & Market Trends : IPO and Other Stock Plays -- Ignore unavailable to you. Want to Upgrade?

To: david777 who wrote (12629)	5/19/2005 8:55:22 PM
From: david777	Respond to of 13331

FRIDAY": No economic data scheduled to be released on expiration Friday. The rally was helped along by some position shuffling ahead of expiration, particularly those betting against the market when they had to cover. Thursday was pretty volatile and with expiration we expect Friday to be a bit volatile as well. The move slowed considerably Thursday both in volume and in point terms. It has been a strong move to this point and a good consolidation for a few days would put stocks in a good position to continue the move. Given the run and expiration we anticipate some profit taking ahead of the weekend. We don't expect it to go too far, however, more along the lines of some lighter volume profit taking. This market always seems to have a surprise up its sleeve and the sellers could pile back in, but given the strong upside follow through Wednesday, that is less likely. The market held up well Thursday given the lack of volume, but we need to keep the bigger picture in mind, specifically where stocks are in this rally. A solid move straight up is ripe for a pause and some retrenching to set up the next move. That would also set up some better entry points on solid stocks that led this rally higher. In short, we don't want to get impatient and try to chase stocks after they have posted a four day run. Sure there are still stocks that are set up to break higher, but overall the market will likely need a bit of a breather, and we want to take the breather with it. What we would like to see is another run higher at the open to cap off the move. Several positions have made good runs and on another push higher we would look at taking some interim gain on those positions just as we have been doing all week as stocks made good moves. It never hurts to bank some solid gain after strong moves, then pick up some more shares after a leader pulls back and makes a successful test of the breakout or near support, i.e. a low volume pullback and then a rebound on stronger trade. That way we have money in the bank and can pick up a winner at an opportune entry point and enjoy another gain. So on an upside move early we will look to take some interim gains if they are there and then we need to be patient and let the leaders make their test, hold near support, and set up the next bounce. That could take a few sessions; stocks run higher in spurts, and the key is to move in when they are ripe just as we were doing the past few weeks when they showed us the pullbacks and then breaks higher. We can then enjoy the ride higher and start banking the gain on the way up.