Bulls Back in Charge of Ceradyne

Lately I've been receiving a lot of requests for my take on certain charts, so today we're going to look at:

• Ceradyne (CRDN - commentary - Cramer's Take)
• Force Protection (FRPT - commentary - Cramer's Take)
• Borders Group (BGP - commentary - Cramer's Take)
• Brookfield Asset Management (BAM - commentary - Cramer's Take)
• Itron (ITRI - commentary - Cramer's Take)

But first, I'll share a discussion I had Thursday with one of my Stock Market Mentor members, N.H., who expressed concern that quarter-end mark-ups might not be having the usual impact on the market.

Many are concerned that the rallying is nothing more than window dressing. I'm starting to wonder if the thought of window dressing isn't what's actually holding the market back a bit! Are traders saying, 'I won't commit too much now because this might very well be superficial buying?' Or maybe I'm projecting my thoughts onto everyone else. I'm hoping and praying for a pullback! I like Apple (AAPL - commentary - Cramer's Take) and believe in an iPod and iPhone iChristmas. Even Crocs (CROX - commentary - Cramer's Take) is starting to be the new status symbol down here in Mexico. I really like these companies; but I'm deviating from my approach by buying right here, right now.

I've had similar thoughts. Specifically, is the specter of window-dressing (and the aftermath) keeping a damper on the buying? A related thought is whether this dynamic is skewing the excessive bullishness that Helene Meisler wrote about Thursday.

In other words, sentiment might indeed be very bullish. And the rule is that people vote their sentiment with their pocketbook; if they're bullish, they're already in. That's the order of things. The majority of traders don't just blindly buy and then decide to be bullish.

Though I hate to think along these lines, perhaps it is different this time. Perhaps the majority is indeed bullish but is still waiting to put money to work. I'm just musing out loud here on whether N.H.'s thoughts have merit. There is always a danger in acting on the "this time it's different" theory, because usually it's not different.

With these thoughts in mind, I'm willing to go into the weekend with a pretty big cash allocation. I'm bullish, but not really putting my money where my mouth is -- yet!

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Cerdayne

Ceradyne really got crushed after peaking well above $80 back in July. But over the past couple months, the stock of this defense contractor has completed a bullish "W" pattern, where the most recent low was higher than the prior one back in August, and the current price is higher than the early September high. This higher high and low pattern effectively puts the bulls back in charge.

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At the time of publication, Fitzpatrick had no positions in any of the stocks mentioned in this column, though positions may change at any time.

Dan Fitzpatrick is the publisher of StockMarketMentor.com, an advisory newsletter and educational forum dedicated to teaching effective risk management and trading methodologies to aspiring traders and investors. He is a former hedge fund manager and a member of the Market Technicians Association, and he now trades from his home in San Diego, Calif. While Fitzpatrick holds various securities licenses, he does not give recommendations to buy or sell stocks. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. He appreciates your feedback; click here to send him an email.