Recently the market has done a very good job of coming back from early weakness. We are hit with some negative news out of Europe overnight, we struggle with it for a while, and then the buyers start to inch in. As they push us up, that draws in more folks who are afraid they will be left behind again, and that causes the bounce to build.
Of course, there is a big danger of sudden reversals like the one we saw yesterday afternoon, but the dip-buyers have been quite tenacious overall. The important thing is that we hold the early lows. As long as we do that, it will keep the bears at bay.
My inventory levels are pretty low once again, but I'm trying to get a few things going. I continue to like Cheniere Energy (LNG), which is seeing some sympathy action after a good earnings report from Golar LNG (GLNG).
One old name I'm starting to rebuild is Web.com Group (WWWW). It had a solid earnings report and has been basing nicely right around its 200-day simple moving average for a while. What I like here, in addition to the technical pattern, is that the stock looks very cheap. The company is supposed to earn $0.98 a share in 2011 and grow that 51% to $1.48 next year. It is trading with a trailing P/E of just 11. If we have some small-cap action into the end of the year, that should attract some attention.
Another one I'm watching closely is KIT Digital (KITD). The stock moved up very strongly after a great earnings report and has been consolidating the move. The company has a cloud-based system that is used to manage video content. It is currently expected to earn $0.80 a share next year.