By: Thomas H. Kee Jr.
Editor, Stock Traders Daily
(La Jolla, CA)
began to surge early Monday morning as investors
digested last week's decline. Corporate Investment
Banking activity has spurred this rally, but it extends
beyond those to include economically sensitive sectors
like REITs, Information Technology, and Networking and
XRX) announced plans to acquire Affiliated Computer
for $6.6 Billion, and Abbot (NYSE:
ABT) agreed to acquire
pharmaceutical business of Belgian
chemicals maker Solvay
for $6.6. Those multi-billion dollar deals are
exactly what the Market has been looking for to confirm
from the March lows.
bounce from the March lows to current levels was extreme,
Wall Street considers today's investment banking
activity to be a very good sign. If a recovery is
underway, if the recession is truly over, mergers and
acquisitions are a necessary byproduct.
From there, the
positive bias rolled over to other sectors. REITs
have been strong. LaSalle (NYSE:
LHO) and Host Properties (NYSE:
HST) each have performed well thus far today.
These are Hotel REITs, and they are dependent on the
economy to perform well. Think back eight months.
Business travel and leisure travel had all been
dried up. Now the travel bug is coming back, and
businesses are more comfortable with the added expense
associated with face to face meetings again.
Then, we have
that lead the rally from March, Technology. Cisco
CSCO) and Juniper Networks (NASDAQ:
JNPR) are standouts. Thus far, everything
seems to be participating, and everyone is giddy.
are no different this week than they were last week.
The only difference is, the Market ended last week
testing support, and this week
is bounced from that support level. Stock Traders
Daily identified support as 2090 in the NASDAQ.
was successfully tested Friday, and it needed to hold
for a bounce to occur. Thus far it has, but there
is more to do. Resistance is clear too, and it
needs to be respected.
need to be in place, and upside targets must be
considered. Do not enter this rally blind to those
risks, or to the profit taking signals that will come.