Thursday, June 17, 2010

Leaders are Acting Just Fine - Do Not Panic Sell - SNDK Reviewed

This market continues to be all about the Euro and The Headlines.  If you can't handle it, then you should be in cash.  Otherwise, the majority of leadership is acting fine and were due for a pullback.  If you were impatient and chased stocks, then you are probably feeling some pain.  If not, then make sure your stock is acting the way it is supposed to.  That includes pullbacks to levels of previous support or resistance.  Stocks do like to retest these areas, in many cases, before moving higher.

Lets take a look at the chart of Sandisk(SNDK) below.  The stock has been one of the best leaders of the entire rally.  It has continued higher even as the market has struggled over the past two months.  But it too cannot resist the gravitational pull of a market pullback.  So everytime the market enters a correction or pullback so does the stock.  But, as can been seen on the chart, SNDK maintains it's uptrend and finds support along its respective moving averages (green arrows).  As long as it maintains this character or does not exhibit some other sell signal it has to be held.  So a pullback into the 42 - 45 range (red circle) would be perfectly normal and acceptable.

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