The short term up-trend in the QQQQ finished its 6th day on Friday. I like the fact that AAPL is holding up. We need to watch the leaders for signs of where the market is headed. I went through the new highs on Friday using the methodology I described last week. In doing so, I found a stock that appears top have broken out from a cup-with handle pattern. So, I am showing it below to provide my class with an example of this important bullish pattern, described by William O’Neil in his book (listed to the lower right).
Short term QQQQ up-trend in question
The QQQQ is going back and forth over its key 30 day moving average. Time will tell whether this new short term up-trend, now in its 4th day, will hold.
How to use IBD 100 and New America stocks and TC2007 to find potential rocket stocks; Market rally begins
I am writing this post primarily to teach my students how I search for potential rocket stocks–stocks that have been launched and appear headed towards new peaks. As I said in class this week, it makes the most sense to buy stocks that have the best fundamentals and technicals. This strategy has been advocated both by Nicolas Darvas and William O’Neil in their extraordinary books (listed at lower right of this blog). Darvas, made a fortune trading in growth stocks in the late 19050’s and said that he liked to buy stocks that were trading at all-time highs and that had already doubled in the past year. So, I am going to show you how I use the great TC2007 stock charting and analysis program to find potential rocket stocks that I research further before buying.