9 'Low-Risk' Stocks on My Screen as Market Sports Good Vibes
The day before Thanksgiving is historically strong, but the recent run makes things a little trickier. Here's the track record for the days ahead.
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Upbeat action continues on the day before Thanksgiving, although it isn’t as perky as it was on Tuesday. Breadth is solid with 63% of stocks gaining ground, but far fewer stocks are jumping more than 10%. The Russell 2000 (IWM) continues to exhibit relative strength with a gain of 0.6%.
The Wednesday before Thanksgiving is historically strong with positive returns more than 70% of the time. Since 1957, the S&P 500 has produced an average return of +0.34% the day before Thanksgiving, closing higher on about 64.5% of those days. This strength is attributed to pre-holiday optimism and lighter trading volume.
The half-day of trading on Black Friday also tends to be positive, with an average gain of around +0.3% and higher closes about 65% of the time since 1957.
Conditions start to reverse on the Monday following Thanksgiving. The DJIA has been down about two-thirds of the time (63%) over the past 25 years, though the average drop is generally modest at around 0.40%.
These stats are simply indications of tendencies and are not certainties, but traders are aware of the numbers that help make the action self-fulfilling to some degree.
There has already been a good run, so that makes things a little trickier. The Russell 2000 has jumped more than 7% in the last four days, so new entries are not easy unless you are chasing extended charts.
I see quite a few charts that have held recent support and turned up, but have not been able to gain any substantial momentum so far. A good example is battery-maker EOS Energy (EOSE) , which has posted some small gains recently but is still below its 50-day simple moving average. With clear support, I see it as a fairly low-risk entry, especially given the large short position.
Other similar charts on my screens are Ethereum play, Bitmine Immersion (BMNR) , ClearPoint Neuro (CLPT) , Delcath Systems (DCTH) , Electrovaya (ELVA) , Flotek Industries (FTK) , Humacyte (HUMA) , AdvisorShares Pure US Cannabis ETF (MSOS) , and PureCycle (PCT) .
I’m not rushing to buy any of these, but they have clear stop points at recent lows, so there is defined risk if a position is established. If market conditions remain positive, they are low-risk plays.
The good mood continues as I write, but watch for some bouts of profit-taking to cause some volatility as things become more extended.
At the time of publication, Rev Shark was long EOSE, BMNR, CLPT, DCTH, ELVA, FTK, HUMA, MSOS and PCT.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider many of these names 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.
