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Stock Market Bears Fail To Follow Up; Is Berkshire Near A Buy? | Stock News & Stock Market Analysis

U.S. stock indexes underwent a light trim midday Friday, as the bearish camp failed to significantly deepen Thursday’s moderate losses.

XAutoplay: On | OffThe Nasdaq shaved off 0.1%, while the small cap Russell 2000 added 0.2%. The S&P 500 and the Dow Jones industrial average lost 0.2% each.

Volume in the stock market today slowed from the previous session’s pace.

Some market watchers have blamed Republican confusion surrounding a tax plan for the recent hesitation in the stock market. However, by now, Republican chaos hardly qualifies as news. President Trump and the Republicans have not been able to shape a united stand on anything since Trump’s Jan. 20 inauguration. If they do unite on policy, then that would be news.

Why The Trouble?

The catalyst for brief bouts of selling may have more to do with profit taking than with D.C. failures. Since Jan. 20, the Nasdaq rose 21%, the Dow 18%, the S&P 500 14% and the Russell 2000 9%. The juicy gains in the Nasdaq and in leaders, such as chip stocks, could inspire profit taking.

Rotation in leadership also might be contributing to recent market action.

Intel Falls

Blue chips were mostly down. Losers led winners by a 9-4 ratio. The biggest loser was Intel (INTC), which fell almost 2%. Intel broke out of a base Oct. 2 and reached the 20% profit-taking level Nov. 1. The buy point was 38.55.

IBD research has found that most stocks will begin to consolidate after a 20% to 25% gain from the ideal buy point.

Berkshire Tests 50-Day

Among widely held stocks, Apple (AAPL) stood firm, easing in average volume.

Berkshire Hathaway (BRKA) slipped under its 50-day line in strong volume. This is Berkshire’s second trip to the 50-day line since the stock’s breakout from a first-stage base in July.

A bounce off the 50-day line in strong volume could set up a secondary buy zone for Berkshire.

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