Sell in May and go away? I beg to disagree. The month of April featured higher volatility with a good number of days experiencing large intra-day swings, which dominated the news. Overall, the stock market edged steadily higher again, led by the small cap Russell 2000 Growth Index. Meanwhile the larger cap indexes, the S&P 500 and the NASDAQ Composite, have been playing catch up and are currently very close to making all time new highs.
While it would not be unexpected for the market to pause here for a breather, the next meaningful move could very well be higher. We view any short term down drafts as opportunities to add to existing or new positions in the stock market in companies that have great charts and great fundamentals. This is not to say we will throw caution to the wind and dive in with both feet as it may take time for previous gains to consolidate before we launch into new high ground. Increased volume on a move to new high ground would increase my confidence greatly.
The good news is that the number of stock market sectors that are in or close to being in solid uptrends have increase nicely. It may seem tempting to dabble in the energy sector but, for the time being, we remain wary of such action because the technical damage done to this group will take a long time to be repaired. As was the case last month, we continue to focus on healthcare and information technology related names.
Disclaimer: Rocket Capital Management is a registered investment adviser. The comments presented do not constitute personal advice and are not intended to be a solicitation for the purchase of any individual securities or investment strategies. All investing involves risk. Please consult with a registered adviser before making any investment decisions.