It Seems It's Just A Matter Of Time

When I think of aggressive growth stocks, my mind generally turns to semiconductors ($DJUSSC), software ($DJUSSW), and internet stocks ($DJUSNS).

Recently, we saw a huge breakout from the semiconductors group. Last week, it was software that was able to close at a multi-month high. And now, I'm watching and waiting for internet to make their move and clear the early-February high:

Enter Dow Jones US Internet Index ($DJUSNS):

There are a couple of very encouraging signs right now. First, if you look back to prior failures of the DJUSNS, most notably in August and December, the PPO trips into positive territory didn't last. They were head fakes. But the move higher in January was different. This time, the DJUSNS saw price move back to test its rising 50-day SMA and the PPO move back just below its centerline, but the head fake was to the downside. The DJUSNS came roaring back and that PPO looks quite bullish and relative strength did make a new high (blue circles). When we do see the next breakout on the DJUSNS, I want to see the AD line clear overhead resistance as confirmation for further strength ahead.

Happy Trading! Tom Bowley Chief Market Strategist EarningsBeats.com Better Timing. Better Trades.