{+++} One of the most often repeated comments in Investors Business Daily this weekend was “broke out but where’s the volume”? When reviewing the IBD 50 this weekend you could see breakouts, but on light volume. That’s not a real break out for my money. I like big volume. A great example of a high volume break outs would be REDF, another one would be OXY. The latter was huge and a great example of a clean breakout on massive volume. SNDA (which we had) is another great example of a great breakout. Check the daily chart on SNDA and look at the volume on April 18. there are other examples, but you get my meaning.
Anyway, the S&P broke through the level that we have been talking about for several weeks now. Maybe the S&P will have the energy to run some more, absent an unknown Black Swan event, we probably will go a bit higher, maybe even before any meaningful correction. Markets have a tendency to melt down and melt up. Right now we are in melt up mode.
I added some potentially good names to the list tonight. As usual ,it is my watch list that I will be using all week. They will not all trigger tomorrow and the list surely will be tweaked, changed and modified as it always is through out the course of the week. Some names will be removed and others added. You guys need to check my P&L every night so you won’t miss anything.
The reason I mentioned volume is because as the market gets toppy, you will want to see better than average volume on breakouts… and in general. If a breakout is accompanied by huge volume you can then be comfortable pressing, without it you should be smaller in size. Many times a stock will breakout and fail shortly thereafter, sometimes the same day as the breakout or the next day. That is known as a “false” breakout.
For now, let’s do we always do and ride the momentum. Have a great week!!
Joe
P.S. I will definitely do a midweek video to review where we are as soon as my tech problem is fixed.