Testing Our Patience

Momentum Stocks Remain on the Defensive

By Bryan Bottarelli
Monday, April 28, 2008 3:45 PM EDT
Mon, 28 Apr 2008 19:45:00 GMT

Dear Bottarelli Research Member,

Not much to report today, aside from the fact that the major market averages are continuing their indecisive trading pattern leading into this Wednesday’s Fed meeting.

As I reported this morning, most of the top momentum names that I follow are weaker today, sparked by the cautionary position of a potential rebound in the dollar. This is causing the sell-off we’re seeing today in shares of BG, but this appears to be a momentary event. We’re also seeing a downside market day in shares of ICE as well, but the fact that the stock is just now coming back down to its 200-day moving average should serve as a level of support later in the week.

ICE

Looking at ABX, the stock exhibited some nice opening-session strength, but has since reversed course and is now fractionally lower. Trading patterns like this do nothing but further complicate the recent market movements — indicating to me that every technician is getting the same “neutral” market signal.

ABX

So, without over-thinking things, I truly believe that everyone is just “sitting on their hands” while waiting for the next directional trigger. And out of boredom, they’re taking some of their profits off the table on the names that have rallied the most over the last 2-3 months. Therefore, I’d like to maintain our current ledger without adding any new positions at this time — and see what type of action we see leading into tomorrow. I wish there was some more exciting news, but unfortunately that’s what the market is telling us right now. Even though today’s movements on ABX, ICE, and BG are testing my patience, lets’ remain in all three of these positions going into tomorrow. And just so we’re clear, we’re also holding the second half of our NVDA June 20 Calls (UVA FD) as well. Until tomorrow,

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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