Daily Market News - 16th Feb 2022
Catching The Winners
It’s a tough time out there if you’re just focussed on buying those perceived discounts over at Peloton (PTON), Trade Desk (TTD), or any other growth tech name that’s been massacred of late… could those 2 particular names mentioned rip higher in the coming weeks and months? Sure. I’m open to the possibility.
But while everyone is out there catching those dangerous falling knives, the bulk of my work over the last 3 months has been focussed on finding the uptrends and strength in the market.
In this weeks letter, I’d like to share a few names I’ve put to our clients and members recently because the charts below make much more sense to me than buying down trends.
First things first, I ‘d like to share what I believe to be the most important chart out there at the moment.
The Russell 2000 Small Caps (IWM)
Let me say, for those of you who are screaming at the chart, I already know the small caps are not the entire stock market.
I get it.
For me though, the small caps are a great gauge of risk sentiment, and for those who’ve followed me over the years, you’ll know I like to pay attention to the major averages because when 1 falls, they all tend to follow suit (IWM, SPX, QQQ, DIA)… this approach has kept me on the right side of the market the majority of the time and if the small caps roll over, it would tell me it’s an environment to be VERY selective in.
To the other side, if the small caps rip higher and put in a failed break down, that would be HIGHLY bullish for the market. I suspect Putin will dictate where we go from here. It’s a pivotal chart and implications in many areas.
Mattel (MAT)
This might be 1 of those names that you’ve never heard of but I don’t mind it when stocks are putting in massive 9 month bases and look ready to break out. This chart for Mattel was put out intra day to our clients / members before earnings last week and of course, it’s done very well over the last 7 days on the back of solid earnings growth and fundamentals.
I like strong charts and strong fundamentals. Above $23.50, what’s not to like?
Deere & Co (DE)
Another 1 of those names putting in a 9 month base.
Word of caution: DE report earnings on Friday and for me, I’m looking to digest the earnings data before making any potential moves on this name… it’s of course a solid company, but I’m not looking to gamble on an earnings outcome so this could be worth adding to your watchlist to see if it breaks out on Friday.
If it doesn’t break out, no problem, there are hundreds of stocks doing well just now.
NVIDIA (NVDA)
Another 1 of those names who are posting earnings this evening therefore new entries wouldn’t be sensible given the implied 11% move in either direction. I put the chart to our clients and members highlighting the 50 Week Moving Average as a possible buy point a few weeks ago and it’s held up well so it’ll be interesting to see if NVDA is going to build the right side of a base or if it’s going to take another breather.
Conclusion
It’s easier to buy uptrends than it is to buy down trends just now… not that you can’t buy deep discounts, for me it just needs to make sense on a Technical level for the optimal buy zones that enable me to manage risk appropriately.
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