7 Stocks I’m Actively Trading as Action Normalizes and Picking Improves
Here's what I’m looking for in stocks right now — and why it's a good environment for finding new names.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
Nvidia (NVDA) and semiconductor stocks are doing the heavy lifting on Tuesday morning. The Nasdaq 100 (QQQ) is trading up 0.6%, the Magnificent Seven (MAGS) is down 0.3%, and the Russell 2000 is up 0.16%. Breadth is running just slightly negative, but there are 170 new 12-month highs. My list of stocks up more than 10% is much shorter today, with about 30 names.
Now that we are past the Santa Claus rally phase and the end of the year, I’m watching to see how the character of the action is changing. Tax issues and fund positioning were creating quite a bit of random action, but as those issues pass, there should be a shift back to more normal market conditions.
At this point, I’m less concerned about macro-economic issues and more concerned about individual stock picking. We will have some movement on speculation about what the Fed will do next, but there doesn’t seem to be much economic concern in either direction right now. While the bears may call this complacency, it is a good environment for finding new stocks to buy.
What I’m looking for are stocks that are not extended and have support. In addition, I want to see good revenue and EPS growth in the most recent quarter and the likelihood of strong fourth-quarter results.
On Monday, I discussed Xeris Biopharma (XERS) , which is down to key support but has strong numbers and should deliver a solid fourth-quarter report. The biotech sector is under pressure, and I think it is creating an opportunity.
A more conservative, bigger-cap name I’m adding to is Dutch Bros (BROS) , which is also owned by TheStreet Pro Portfolio and analyzed here by fellow Pro contributor Louis Llanes. I bought a small position in BROS back in October and am now planning a couple more incremental buys as it tests support at the 50-day. BROS is scheduled to release earnings on February 25, so there is no big rush right now to add, but I want to take advantage of softness as I build up this position.
Duos Technologies (DUOT) is a small-cap company that focuses on Edge Computing. It broke out on big volume on Dec. 30 and has now given back the entire gain and more as it returns to the 50-day simple moving average. I had reduced my position and will now start to remount it.
I added to Emergent BioSolutions (EBS) on Monday because of the pattern, which I call an "anticipatory breakout." It broke out Tuesday and is trading up 5%. I will likely flip some and watch for remounts.
EOS Energy (EOSE) , which is a battery play, has been trading poorly, but it is bouncing back up to its 50-day simple moving average. It still has technical overhead to deal with, but if it can hold up for now, it should be buyable soon.
Flotek Industries (FTK) and Harrow Inc. (HROW) broke out on Monday. I made partial sales of each and will watch for remounts as they consolidate.
I need to spend more time hunting for new ideas, and hopefully, I will find a few things of interest that I can share.
At the time of publication, Rev Shark was long NVDA, XERS, DUOT, BROS, EBS, EOSE, HROW and FTK.
