March marks the third year of the bull market, but it's been well known that individual investors have largely stayed on the sidelines. This has led to some concerns by analysts who speculate that a fast and furious recovery will leave Main Street investors behind while Wall Street investors get rich(er).
Is it time for Main Street to dip their feet back into the market? According to Charles Schwab, the time is ripe for this group to get active again.
Charles Schwab has noted its most active clients have displayed their highest level of bullish sentiment since the bull market began. "The jump in optimism from this group may signal the less active crowd will soon follow, propelling the rally to a fourth year, market analysts said." (Via Fast Money.) The Charles Schwab Active Trader Sentiment Survey showed 51% of individual investors that trade frequently are now bullish.
"I think it means we will finally see retail buying," said Mary Ann Bartels, head of technical and market analysis at Bank of America Merrill Lynch to CNBC. "They have been absent from the market."
Business section: Investing ideas
More investors mean higher trading volumes, something that has been noticeably absent from the 2012 market rally. And many believe without that volume, the rally will not continue.
But we were wondering -- which companies are proving to be exceptions to the low-volume rally?
We screened a universe of stocks with market caps above $300 million for relative volume above 1.25 (relative volume is the ratio between current volume and the three-month average) and an average volume above 100,000.
We then screened for two opposing sentiments: Net institutional buying (bullish Wall Street plays) in the current quarter, and increased short positions by short sellers (a negative short-term play). Which investor group do you think is making the right move?
List sorted by relative volume. (Click here to access free, interactive tools to analyze these ideas.)
1. KIT digital
2. Weight Watchers International
3. D. R. Horton
4. Qihoo 360 Technology
5. Verint Systems
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Rebecca Lipman does not own any of the shares mentioned above. The Motley Fool owns shares of Bank of America. Motley Fool newsletter services have recommended buying shares of Charles Schwab. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.