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Stocks that have held up best during this correction are most likely showing us where investor conviction is the strongest.For example, one area that has held up surprising well is the Internet Protocol transport sector. Companies like Level 3 Communications Inc (NASDAQ: LVLT), Global Crossing Ltd (NADSAQ: GLBC), and Time Warner Telecom Inc (NASDAQ: TWTC) have changed little in price.
In previous corrections, these IP transport stocks would get crushed. However, that is not the case anymore.
This is a sign to stay with these stock and add to your position as the broader market continues to correct. If investors aren't selling these stocks now, it most likely indicates confidence is building in this space.
Additionally, Expedia inc (NASDAQ: EXPE), the online travel giant, has also held up very well, changing little in price during this correction. The stock has traded all over the place in previous corrections. This is a sign that investor confidence is improving here also.
All four stocks mentioned in this blog have good unit volume growth, operate low-cost businesses and appear to have pricing power returning to their industry -- a good combination to make some good money.
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Reader Comments (Page 1 of 1)
3-14-2007 @ 4:28PM
Les Beernink said...
Retail sales are down .1 percent for the month of Feb. The market has fallen 200 plus points twice so far this month. Retailing must come to grips with the fact that the middle class and lower income workers are being reduced by outsourcing and illegal immigration. Its very simple, less money in the hands of US citizens means less money to spend in the United States.Corporate greed worked in the short term but is now showing signs of failing in the long term.