Here's What's on My Radar as I Take a 'Wait-and-See' Approach
There are many interesting stocks out there, but most of them need time for better technical patterns to develop.
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A better-than-expected Core PPI number gave the market a small boost in the pre-market, but the sellers arrived at the opening bell. Breadth is better than on Tuesday but the Magnificent Seven MAGS are lagging and putting pressure on the Nasdaq 100 QQQ.
The Russell 2000 IWM is seeing a feeble bounce attempt but pockets of speculative action have dried up and there isn’t much aggressive trading in secondary stocks. My screen shows only about 20 stocks up more than 10% with a few quantum computing (Rigetti Computing RGTI) and drone (Dragonfly DPRO) names attracting interest.
There is some notable economic data and a few more big earnings reports due this week, but the news flow will really pick up next week. The market is currently wrestling with some consolidation and profit-taking and that is going to take a little while to digest. At this point, the best course of action is to just wait and see how things develop.
Several names on my radar that I have reduced recently are pulling back, and I want to remount, but there isn’t any rush to do so. Uber UBER, for example, is down from around $98 to $91 but still doesn’t have good technical support. AST SpaceMobile ASTS has bounced very well over the past week, but is now running into technical overhead at all-time highs.
The biotechnology sector remains of great interest to me. There was a move over the 200-day simple moving average last week by the iShares Biotech ETF IBB, but it didn’t hold and was sold aggressively on Tuesday. Some of my favorite names, such as BridgeBio Pharma BBIO, Xeris Biopharma XERS, ADMA Biologics ADMA, and The Oncology Institute TOI, are slowly developing and should offer entry points soon.
There is an unusually long list of stocks that have had strong momentum and have been acting very well for a while. Some of the better setups include Hyperios DeFi (HYPD), DeFi Development (DFDV), Scholar Rock (SRRK), and Palladyne (PDYN). While I still remain bullish on Rocket Lab RKLB, RobinHood HOOD, and Palantir PLTR, they are all too technically extended to buy at this point.
The market needs some time to digest and set up again, so I am embracing a wait-and-see approach.
At the time of publication, Rev Shark was long UBER, ASTS, BBIO, XERS, ADMA and TOI.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider several of the names mentioned to be small-cap stocks. 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.
