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Are Apple and Netflix Ready to Surge Again?


These major stocks have been showing healthy signs of consolidation for the past two weeks.

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After a strong gain over the past eight weeks, the market has spent the past two weeks digesting those gains (just below record highs). This is very healthy, but one should also be cautious up here so as not to get caught "chasing" stocks and to give the market some time to digest its recent move. 
Two Ways the Market Can Consolidate
There are two ways a market can consolidate a recent move:
1. move sideways or  
2. pull back.
Either way, the ideal scenario is to see the trend resume (in this case, the stock market continues to rally). It is important to keep in mind where the market/leading stocks are trading now relative to their moving averages. Look out for what I call "air pockets" and look for logical consolidations (sideways or pullback) to develop instead of blindly chasing stocks after a big move.

Below are charts of Netflix (NASDAQ:NFLX), Apple (NASDAQ:AAPL), and S&P 500 (INDEXSP:.INX) respectively.
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Author holds positions in SPY, AAPL AND NFLX.
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