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Wild Ride Continues

As little has changed with the indicators, it looks like we’ll rally again in a choppy fashion: up, down, up, down.

The Market

So, we regained what we lost intraday Tuesday. Let’s call it the market’s wild ride. And still very little has changed with the indicators.

The short-term is still a little overbought. To get “a lot” overbought, we would have to see several more days of positive breadth strung together. If we got, say two to four more days of positive breadth in a row, then we’d be “a lot” overbought late next week. Otherwise, it will still be a little overbought short-term.

The intermediate-term is still not overbought. That overbought reading is still too far out in time for me to view when it might be. It might just turn out that we get intermediate-term overbought, as we head into May. But as I said, that’s still too soon to tell.

What makes us a little bit overbought, aside from the breadth readings, is that the McClellan Summation Index, which is still heading upward, now needs a net differential of negative 5,100 advancers minus decliners to halt the current rise. That’s a lot. Recall that when we discuss getting oversold, we are extremely oversold at negative 4,000. Overbought doesn’t tend to work as readily, though. But it still means we’re a little overbought.

Then there is sentiment, which feels like it is more accepting of the rally, but statistically still is not. This week’s Investor’s Intelligence bulls and bears barely moved, but the bears are still more than the bulls. Thursday morning I expect we’ll see a shift in the American Association of Individual Investors weekly survey.

So, we have some resistance close by in the major indexes and we’re a little overbought. Once again, perhaps we pullback. But I still think we’d rally again in a choppy fashion. Up, down, up, down. Next week will be week four for the rally. If we don’t see a significant drop in the next week, I expect we’ll start to see those sentiment readings turn next week.

I did an interview with TD Ameritrade Wednesday if you would like to watch it..

Wishing those who celebrate a Happy Passover! The markets are closed on Friday, so there will be no "Top Stocks." I wish those who celebrate a Happy Easter!

New Ideas

We’ll do some follow-ups here. I am still waiting to sell VMWare (VMW) - Get Free Report at that $135 gap fill.

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Valero (VLO) - Get Free Report is finally closing in on that gap fill in the $54-$55 area where I would sell it.

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You will see a lot of charts that I have highlighted lately are sitting right near those gap fills. I await their fills patiently, sometimes not so patiently!

Today’s Indicator

The Volume Indicator finally moved! It is now at 43%. It doesn’t get overbought until the mid- to-upper $50s, but I don’t expect it will get there in a hurry. I expect it likely stops before then, before retreating.

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Q&A/Reader’s Feedback

Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.

Zuora (ZUO) - Get Free Report is like so many charts: It should fill that gap above, around $10. If it turns south and breaks $8 first, I would say that’s not good.

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Kellogg (K) - Get Free Report looks so different than the other cereal stocks, like General Mills (GIS) - Get Free Report that we looked at recently. This is lower lows and lower highs, so I’m more inclined to think it can come down to say $58-ish and if it can hold down there, I might be more interested in it.

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I struggle with a chart like Baidu (BIDU:Nasdaq), because if it can get down there and fill the gap, I would say it’s worth a trade, but there is so much resistance overhead I don’t know where I would consider selling it. On a longer-term basis, I would love to see a few weeks of sideways between $90-$105, which would make this look more like a base of sorts that would then look like it could make it to $115-$120.

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