Morning Report – May 7, 2014
Even though yesterday was an ugly day for stocks, the NASDAQ Composite remains within its trading range. Volume increased from the prior day’s no demand day, but was still less than its 50 day moving average. Only the Small Cap 600 stocks showed strong selling pressure with confirming volume above its 50 day moving average, up 11.1%.
The NASDAQ Comp gave back more than its prior day’s gains, and was down 1.4%. Most of the damage was done in the internet stocks, with TWTR leading the group down with a 17.81% loss as millions of shares were released into the market after the lockup period. If this is an indication of what insiders think about the long term prospects for Twitter, it has the potential to go a lot lower. Volume was the heaviest it has ever been for TWTR, even above the IPO date. Yesterday could have been a selling climax, but it is too early to tell. LNKD and YELP added to the carnage with LNKD down 5.7% and down 13.39%. If you want three great examples of stocks that have been strong downtrends, and continue to be, look at these three stocks. They are great examples of why no one should try to bottom pick stocks in a downtrend. Read Full Report