Happy Thanksgiving! We want to extend a special thanks to all of our clients, friends, and partners for allowing us to serve them here at Rocket Capital Management.
The major indexes, the S&P 500, DJIA and NASDAQ have all had significant moves from their trading lows in September and are now trading above their 200 day moving averages, adding to my conviction that the lows established in August will be the lows for the year. While this is very encouraging, I believe that any additional gains are unlikely, as we have rallied into areas of resistance at levels where I would anticipate increased selling. In addition, I am somewhat concerned by the lack of broad based participation by a large number of sectors and individual stocks as the advance has been was powered by only a handful of high profile large cap stocks. Having said that, the short term trend is up until proven otherwise and we will continue to trim our positions that have become overextended technically and use the proceeds to build new positions in companies which fit our criteria as the charts dictate. Given last night’s review of over 1500 chart patterns I don’t expect this to happen overnight.
The weakness that we described last month in many segments of the healthcare sector accelerated dramatically, leaving the group severely damaged technically and an industry that should be avoided for now. While we continue to like the medical sector long term we will focus our attention on other sectors in the market which are performing currently performing well, such as regional banks, telecom fiber optics and infrastructure, and computer software. Please contact us to receive our quarterly newsletter for more in depth details.
Disclaimer: Rocket Capital Management, LLC 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.