Small caps, techs leading the way
There was an interesting divergence in the market averages this past week as the DJIA and S&P 500 sold off – reflected in their now mixed trend picture – while the NASDAQ and Russell 2000 moved to new recent highs, and semiconductors held steady. The weakness in the large-cap indices seems, so far, to be consistent with a temporary correction in the ongoing intermediate-term uptrend – especially given the strength in small caps and technology stocks – rather than the start of any real downtrend.
New positions
Taking advantage of some ongoing weakness in the healthcare sector, last week I sold some April 25-strike puts on Bristol-Myers Squibb (BMY), which is backing down a bit after spiking up recently on news of a patent deal involving its anti-blood-clot drug Plavix. I’ll also be looking to sell some 22-1/2-strike puts on BMY if it drops down to the 23 level in the near term.
Watchlist
Stocks that showed up this past week on “upside strength” scans that caught my eye included Polaris Industries (PII), Staples (SPLS), and Weyerhaeuser (WY). “Beaten down” stocks of interest include Dow Chemical (DOW), Intel (INTC), Safeco (SAFC), and Vodaphone (VOD).
