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The Next Market Leaders - First Edition!
Hi everyone, and welcome to the first edition of The Next Market Leaders, a publication designed to help you find and organize the best stocks in the market.
I’ve just finished scanning about 300 top stocks - most are either looking extended out of their bases past buy zones, failing their breakouts, or getting crushed. The fact that so many stocks are failing their breakouts makes me a bit nervous about the breadth of this market rally, so we’ll have to keep a close eye on our current positions for signs of reversal.
We’ll cover the major indices, current positions, the best setups, more stocks, and a trading tip of the day. Let’s get into it!
The Nasdaq looks relatively strong as it’s breaking into new highs but it got stood up on Friday printing a shooting star candle. Might return to test the trendline.
The S&P-500 looks like a double-top with a big volume selling bar on Friday. That marks the 3rd distribution day in 4 weeks, I’ve labeled all of them on the chart with yellow arrows. We’ll keep an eye out for more distribution days - 5 is a sell signal.
ZIM Integrated Shipping ($ZIM) took off last week on fantastic volume after posting a stellar earnings report on Wednesday. Here’s the earnings snapshot:
I noted on Twitter that I bought at $56 and the stock moved $2 higher in short order. I moved my stops up to $55 and will add more if it breaks new highs at $62.
Rambus (RMBS) is another one I noted on Twitter - bought at $25.50 and it’s $2 higher on great volume. Stops moved up to breakeven.
Qualcomm (QCOM) looking strong, I got it after a break of ATHs at $170 as noted on the chart. Stops at $173.
I took some Nvidia (NVDA) at $299 immediately after the earnings report last week in after-hours because it looked like a great report and the market hadn’t really reacted yet. I added at $327 two days later on the break into ATHs.
Adobe (ADBE) broke out of a cup and handle pattern into ATHs on solid volume on Friday. I picked some up at $680 and have stops at $661.
Apple (AAPL) is looking super strong with a great close on Friday on good volume, maybe on news that they’re creating their own autonomous electric car. I’m in at $158 with stops at $152.
Now, onto new stock setups with stellar fundamental stocks that are coming out of valid bases. Many of the stocks today are stocks that are known market leaders that have experienced a recent price runup and are now moving sideways in a new base pattern. We will look to buy these stocks on a breakout of their new bases with good volume to support the move. Stops should be set tighter because some of these will fail breakouts as is happening all around the market.
Alpha & Omega Semiconductor (AOSL) is setting up an ascending triangle pattern after a good earnings report. Here’s the earnings snapshot:
BZ (Buy Zone) is at $47 with good volume. Place stops at $45.
Arcbest (ARCB) is a leader in the trucking space with stellar earnings growth averaging 160% over the past 3 quarters. This looks ready for higher prices and the BZ is a break of the trendline at $114.
Crocs (CROX) has been trending steadily higher after a great run of earnings reports and celebrity sponsorship, and now it’s putting in an ascending triangle pattern. BZ is a break into ATHs at $184 on great volume.
Datadog (DDOG) is flagging and the BZ is a move into new highs at $200 on great volume. This one can be a bit choppy so give it a bit to make sure it doesn’t immediately reverse back into the base after breaking out.
Diodes (DIOD) is a leader in semiconductor manufacturing and the BZ is a break into new highs at $111.5 with stops at $108.
Roblox (RBLX) has been leading the market ever since their earnings report with 30%+ active user growth and Facebook’s validation of their market with the metaverse. It’s looking a bit extended and a few days of rest would be best but I’d consider adding some at a break into new highs at $139 with stops $5 lower.
This section will be for stocks that aren’t quite ready to buy but are forming good-looking base patterns that should be watched. It’s pretty empty today because not a lot of great stocks are forming base patterns that haven’t broken out yet as noted in my intro note.
Repligen Corp (RGEN) is one that’s forming a decent double-bottom W pattern with a BZ of $308 on solid volume.
Trading Tip of the Day
One of the easiest ways to make sure your winning trades are bigger than your losing trades is to initiate a position with half of the intended trade size, then add the other half as soon as the stock goes up 2% from your buy price.
Thanks everyone who has signed up for this report so far! I promise to work my ass off to make it the best it can be so we can all make money together. If you liked it, feel free to send me DM on Twitter with any thoughts or suggestions!
The next issue will be on Tuesday night, 11/23.
Make your own luck,