"Resistance, resistance wherefore art thou," Shakespeare might say if he returned to life as a 21st century daytrader. For the second day in a row on Friday, the Nasdaq Composite tried and failed to close above its 2004 high of 2,153.83, set on Jan. 26.

Not that there's anything wrong with that: The tech-heavy index still finished the week with a gain of 2.2% thanks to oil's hefty drop midweek and Intel's ( INTC - Get Report) upside surprise on Thursday night. That beat the Dow Jones Industrial Average and the S&P 500, which both climbed 0.7% for the week.

Prudential Equity Group chief technical analyst Ralph Acampora says despite the resistance, the Nasdaq is poised to breach the barrier and kick off another leg higher. "Any hesitation is considered healthy as it allows for normal near-term profit taking," he wrote on Friday. "These temporary reactions are taking place within the confines of strong uptrends that commenced for most indexes at their respective August lows."

Along with oil's fall, the week's gains were fed by some robust economic data. Offsetting the positives were renewed terrorist activity in Spain on Friday and the November payroll report, which must be counted as a severe disappointment.

The economy added only 112,000 jobs, the Labor Department said, well below the expected 200,000 following the 337,000 increase in October. Bond bulls had a field day and the yield on the 10-year Treasury note dropped to 4.27% on Friday from 4.40% on Thursday. Still the retracement brought the yield back only to about last Friday's range.

The market is still expecting the Federal Reserve to raise interest rates again this month despite the labor shortfall. Philadelphia Fed President Anthony Santomero said Friday that the central bank "should continue moving monetary policy toward a neutral stance at a measured pace." That mirrors the language of recent Fed statements accompanying the previous hikes and indicates little change in the outlook of top bankers.

Danoff's Watch List

Jim Cramer tipped his hat to ( FCNTX) Fidelity Contrafund manager Will Danoff on Friday. Contrafund is up 13% so far this year, to rank better than 95% of similar funds, according to Morningstar. It's no surprise, as Danoff has beaten 99% of his peers over the past three years, 97% over the past five and 96% over the past 10.

A former assistant to Peter Lynch and retail analyst who made his reputation calling Home Depot ( HD - Get Report) a buy in the 1980s, Danoff now ranges all over the market to uncover overlooked bargains. During the tail end of the Internet boom, he was loading up on gold stocks. With Fidelity having just released Contrafund's Sept. 30 portfolio, we can see that in the third quarter, he reduced his exposure to the health care, consumer staples and consumer discretionary sectors while upping his investments in energy, materials and utilities.

Cramer discussed some of Danoff's biggest positions like Avon ( AVP - Get Report) and Yahoo! ( YHOO), but it's also highly instructive to look at some of the smallest in the $43 billion fund. Fidelity managers like Danoff often open tiny positions in stocks as a sort of watch list to keep closer tabs on potentially interesting developments.

It gets the attention of analysts both inside and outside of Fidelity, who feed more tips and updates to a manager with even a small position. And it certainly gets the attention of corporate CEOs. Danoff told me in an interview last March that he gets many of his best insights from top CEOs in each industry. On a quiet day last January, he called Avon CEO Andrea Jung to chat about prospects in China.

There were 72 new positions under $10 million -- most under $5 million -- added to the fund in the third quarter. That excludes small leftovers of positions Danoff has been liquidating, like $3 million worth of McDonald's ( MCD - Get Report). Also excluded are small positions initiated before the last quarter.

Some of the new place-holder positions are positions in well-known companies like ChevronTexaco ( CVX - Get Report), Wachovia ( WB - Get Report) and Black & Decker .

But most are in more obscure small- or mid-cap names like patio furniture maker Trex . The company, with a market cap under $1 billion, often gets beaten up for short-term losses during hurricanes season only to rebound a few months later. MGP Ingredients ( MGPI - Get Report) makes the raw materials for pet chews and vegetarian meat substitutes. It's poised to benefit from lower grain prices.

Danoff likes to attend as many meetings as he can with corporate execs and sometimes finds himself the only Fidelity manager showing for a session with an unknown CEO. As a result, he buys more IPOs than many large fund managers. Among his small positions were Greenfield Online an Internet survey firm that went public in July, biotech Idenix Pharmaceuticals ( IDIX) and Westlake Chemical ( WLK - Get Report).

The greatest number of the new small positions are in the fields of energy, machinery and metals and mining, giving some insight into where Danoff is looking for new ideas. They include Oil States International ( OIS - Get Report) and Pason Systems, which trades on the Toronto Stock Exchange, in the energy patch; AGCO ( AG - Get Report) and SPX ( SPW) among machinery manufacturers, miner Meridian Gold and steel company Gerdau SA ( GGB - Get Report).

Although by Fidelity policy, Danoff doesn't discuss individual holdings (thanks to a little $10 million settlement the firm paid over long-ago comments by Jeff Vinik), those three sectors are certainly poised to benefit from higher oil and commodity prices and a weaker dollar.

Of course Danoff also initiated much larger new positions in the third quarter, like a purchase of almost 1 million shares of Google ( GOOG - Get Report) or $100 million worth of railroad stocks Burlington Northern , Canadian National, another Toronto Exchange stock, and Norfolk Southern ( NSC - Get Report).

In those cases, it may be too late to follow Danoff's bets. The seed stocks provide potentially richer feed for the portfolios of small investors.

In keeping with TSC's editorial policy, Pressman doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback.