A positive response to mediocre earnings from Facebook (FB) , combined with oversold conditions and the end of the dismal month of October, are helping to produce an aggressive bounce this morning. It feels like FOMO (Fear of Missing Out) is back in play. If Facebook and Baidu (BIDU) can bounce then why not the broad market?
These sorts of bounces often last longer than traders think they will. The market gods want you to believe that the worst is over so they can pick your pocket again in the near future but it usually pays to give these moves some room to run. Many folks are poorly positioned and are trying hard to add back long exposure.
An example of a stock that I've been adding is Twitter (TWTR) . This was a technical buy at SharkInvesting.com this morning as the chart has shown good relative strength and was likely to receive some sympathy buying due to Facebook.
One of the difficulties when there is bounce action like this is that most charts have not yet had time to develop very well. If you are looking for solid bases and higher highs, there will be a fairly limited amount. Momentum players are not going to be too excited about this action right now.
I am looking for more merchandise and will be adding to a few things as the day progresses. The longer that things hold up the more buying interest there will be.