Here Are 3 Contrarian Opportunities as Gloomy Trading Action Continues
Two of these names should benefit from some of the problems in the AI data centers group.
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A mixed November employment report did nothing to improve the poor market action. More jobs were created than anticipated, but the unemployment rate ticked up to 4.6%. That wasn’t good enough or bad enough to affect Fed policy expectations, although bonds have ticked up slightly, which is a good sign.
While breadth has improved with about 54% of stocks in positive territory, the number of new 12-month highs is down below 75, and there still aren’t many hot pockets of speculative action. Small-caps are lagging while the Magnificent Seven (MAGS) is leading with a bounce of 0.2%.
The data-center group is at the core of the problems in the AI group and continues to struggle to find support. There is collateral damage there that is likely not justified, but it is difficult to be aggressive until price action improves.
Two names that I’m watching focused on edge computing are suffering due to their relationship to data centers. The edge players should benefit from some of the problems in data centers because they are filling the gap for short-term power needs and can also help bypass the construction delays that are at the core of the weakness in names such as CoreWeave (CRWV) .
The two names are Solaris Energy Infrastructure (SEI) and Duos Technologies (DUOT) . Both have recently had very rapid growth and have a backlog of business. Still, they are being dragged down by the general problems in the data center group. I have positions in both, but would like to add aggressively when technical conditions improve.
Another bigger-cap name I’m watching here is Uber (UBER) . There has been a steady diet of bad news for the company, from increased competition from Tesla (TSLA) to government charges from the FTC related to billing to protesting drivers in the EU. The stock is breaking support Tuesday morning around $81, and the chart looks terrible.
I view UBER as a contrarian opportunity for 2026. I added a little this morning, but the chart looks like death right now, and it is going to take some time to improve. It is one of those plays that will require a high level of patience.
The market is rolling over again as I write and is at the lows of the day. The mood is gloomy and there is no apparent interest in bottom fishing, but that should move us closer to a washout point.
As I often written, bad markets don’t scare you out, they wear you out. This one is becoming quite tiresome and the level of disgust is rapidly building.
At the time of publication, Rev Shark was long DUOT, SEI and UBER.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider DUOT to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
