The Next Market Leaders - 11/23
Good evening everyone, and welcome to all the new subscribers since last issue.
The trading day closed less brutal than it looked intraday, as the Nasdaq traded down over 1.30% but closed down just 0.50% after a strong rally in the last hour. Still, many former leaders continued to shed value as the transition to financials, energy and cyclicals continues. The Dow Jones led the way is never a good sign for growth investors. Continue with caution as these are very tough market conditions; the raging bull market seems to be on it’s last legs as there’s a lot of institutional selling underneath the hood. I’ve halved my position sizes on new buys and kept stops tight.
In this issue, we’ll cover the buys/sells I’ve made over the past few days, updates on charts from the last report and new stocks that are forming solid setups for us to keep an eye on. Let’s get into it!
Recent Moves
As the gap up faded hard on Monday morning, I noted that I sold all of my positions and moved into 100% cash, which turned out to be just before everything really broke down.
Sells:
RMBS - sold at $27.20 for an 8% profit
QCOM - sold at $184 for an 8% profit
NVDA - sold half at $325 for a 7.5% profit
AAPL - sold at $164 for a 3% profit
ZIM - sold at $56.86 with a small profit
ABDE - sold at $689 to break even
I saw my profits and ran with them. Finished Monday up 1% on my portfolio when most others got crushed so that was fine with me!
Buys:
MSFT at $143.62
FAS at $337.80
Best Setups
Alpha & Omega Semiconductor (AOSL) tried to break out on Monday but failed. Still holding up well amid the market decline and I still like it above $47 on great volume with stops at $45.
Arcbest (ARCB) is a leader in the trucking space with stellar earnings growth averaging 160% over the past 3 quarters. It’s holding up well on declining volume (which is what we want in the base) and the Buy Zone is a break of the trendline at $114.
BioNTech (BNTX) is a formerly-leading vaccine stock right next to MRNA and it’s staging a comeback here along with rising Covid cases. Lots of lines on this one but it formed a double-bottom W pattern with a buy point of $304 that held today. This one looks good to buy a small position if it’s moving up tomorrow but it will face some heavy resistance at the descending trendline around $330 so you could wait until then for a bigger move.
SiteOne Landscape Supply (SITE) is printing a tight flag pattern with a Buy Zone of $255 on above-average volume. Stops at $340 if we enter.
Mueller Industries (MLI) is in the metal/fabrication industry which has been doing well and they’ve been posting great earnings growth around 300% for the past two quarters along with accelerating after-tax margin. The stock has risen around 50% accordingly since the last earnings report in October and looks ready for more.
Buy Zone is 62.30 on good volume with stops at $60.
Smart Global Holdings (SGH) has accelerating earnings, revenue, and margins growth for the past three quarters but hasn’t really run up much yet. The base is a bit sloppy so be careful getting chopped up in this one, but the Buy Zone is a break of the small trendline at $59.50 and then add more at all-time highs at $60.50 on good volume with stops $2 lower.
PNC Financial broke out of it’s descending trendline and 21MA amid the institutional move to financials. You could pick some up right here at $209 or a little lower with stops $5 below your buy.
Trading Tip of the Day
For those that don't know, the NAAIM number is a survey of the average US Equity exposure for active money managers.
Over 100 is leverage invested, 100 is fully invested, and 0 would be 100% cash. At 103 as of 11/17, expecting this to decrease quite a bit in the coming weeks. https://t.co/8fWWMlTy7h
That’s all for today. The market’s might be fairly tame for the rest of the week despite the hot start due to vacationers around Thanksgiving, so there might not be much volume in either direction. This will make it hard to confirm a move one way or the other but as always, we’ll just have to watch and see how it plays out.
There’s a lot to be thankful for this year, so I hope you all remember that and have wonderful times with your family and friends this Thursday if that’s your thing. If not, see you on Friday!
P.S. I’m still considering the timing of this report, but it will be twice-weekly. For now I’ll be publishing on Sundays and Tuesdays, so the next edition will be in your inbox on Sunday night.
Cheers,
Danny Deals