The iShares Russell 2000 ETF (IWM) is now up 11 of the last 12 trading sessions. By any measure, it is technically overbought -- but the same thing could have been said a week ago. Therein lies the ingredients for more upside. Both the bears and underinvested bulls are looking for some downside -- and when it doesn't occur they will be forced to reposition and add to the upside pressure. IWM is a holding of Stocks Under $10.
The key think to keep in mind about markets that are hitting new highs is that they don't suddenly collapse. They stay sticky to the upside, as dip buyers are not easily discouraged. The downside can come swiftly, when it does finally occur -- as there is a rush to lock in gains, but the rollover can be a very stubborn thing and it is easy to over-anticipate weakness.
My game plan is to stay focused on individual stock picking and not worry too much about the indices. Breadth is very solid, with about 4,500 gainers to just 2,100 decliners. There are nearly 700 stocks making new highs. That sort of price action might seem a little frothy, but it doesn't suggest impending doom.
Oil names continue to be at the top of my radar. I anticipate adding some names into the close. Prior Stock of the Week, Hudson Technology (HDSN) , caught a second wind today and blasted to highs on good volume. Comstock Resources (CRK) , Oasis Petroleum (OAS) and Health Insurance Innovations (HIIQ) are on my list as potential additions.
While this market still looks quite good, we can't overlook the fact that we want to focus on keeping our accounts near highs. We can't completely throw caution to wind -- although that has been a good idea lately.
