Market Held Lows – ALTR, CRUS, CRM

The stock market was very close to failing its recent breakout last week and I commented the next few days will tell all. Well since then the indexes have been building constructively and the low was not broken, trading has been looking more positive. The indexes are back above the 50 day moving average, see graph below courtesy of http://www.bigcharts.com/.

 

The market is constructive in the sense that the lows held and we are now making ‘higher lows’ or better said ‘higher troughs’. The only thing missing from the current situation is that we still have a lack of volume. We need to see a good sized up day on very heavy volume to show conviction.

Having said all this I think it reasonable to do some more buying. Those who bought two weeks ago risked 1% of their cash if they used a 10% sell stop on 10% of their available cash and as I mentioned last week have tightened up on that sell stop. These stocks haven’t gone high enough yet to start adding to those positions but since losses are now minimal if stopped out (or perhaps even zero) then we should consider trading and buy more stocks. Remember you have to follow this approach since capital preservation is always paramount. You are in a very good position when you consider how much money people have lost this last 2-3 months while you have been sitting with cash.

The following companies have all broke out on good volume and should be considered after you do your homework on potential purchases. Remember to use your sell stops and check that earnings are not imminent.

ALTR – $29.90

CRUS – $19.82

CRM – $99.77