Buying This Small-Cap Battery Play After Latest Launch
Here is an interesting play that I put on the radar in an over-extended market.
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All bull markets are alike in some ways, but every market environment is unique in its own way. Understanding the nuances of market conditions is what will determine your level of success to a far greater extent than simply looking at the technical patterns of the indices.
Currently, we have had a steady diet of new all-time highs for the senior indices that are driving this market. It is primarily the large-cap AI-related names that are creating much of the strength. Nvidia NVDA, which is the largest capitalized stock in the market, is solely responsible for much of the strength.
There are also pockets of aggressive trading in some small-cap junk names, which are highly volatile, and there is a large group of individual stocks that have been lagging the indices and not acting particularly well.
What has worked best recently is holding onto the stocks with the best momentum. There have hardly been any dips in the leading names, so dip-buyers are frustrated, but if you are simply stuck with the well-known growth names like Palantir Technologies PLTR and Calance Design CDNS, then you are doing well.
The biggest challenge of trading the current market is entry points. If you are heavily long and holding the best-performing stocks, then you are in good shape, but if you are trying to put more capital to work, there are very few easy entry points. When this happens, many traders resort to trying to call a market turn, which can lead to even greater frustration when it doesn’t occur.
As someone who focuses on aggressive position trades, I’m having a hard time finding stocks that meet my criteria. The charts need to develop, and that doesn’t happen very quickly when the indices don’t rest. Betting on the outcome of earnings is especially difficult when a stock has a big run up into the news.
The one great certainty of the market is that conditions will eventually change. If you are patient and don’t allow yourself to become frustrated and force trades just to do something, then the opportunities will come to you. You don’t have to be trading every day, but it is also important not to become too focused on market timing.
If you are frustrated by the indices, then focus more on individual stocks and look for pattern development. Those patterns may deteriorate if the indices correct, but that will be the true test for a good stock.
I’m doing very little right now, but I’m optimistic about a long list of stocks that I want to buy when market conditions shift. I don’t know when that might be, but I know that no one is timing market turns very well right now.
I started a position in a thin, extended small-cap name on Tuesday. Electovaya (ELVA) designs and manufactures lithium-ion batteries and battery systems for energy storage, clean electric transportation and specialized applications, with a focus on heavy-duty and mission-critical uses like material handling electric vehicles (e.g., forklifts), robotics, construction and mining vehicles, e-buses, e-trucks and industrial energy storage.
Last week, it announced that it had launched multiple battery system products for a variety of robotic vehicle platforms. On Tuesday morning, it announced he launch of multiple battery system products designed specifically for airport ground support equipment.
The company grew revenue by 40% last quarter and is estimated to earn $0.11 in FYE September 2025 and $0.35 in FYE September 2026, which is very attractive growth. This is a very small company, but it is in an interesting niche that should attract attention if it posts another strong quarter. Currently, the chart is extended, but I have a preliminary position and will be watching for entries.
At the time of publication, DePorre was long ELVA.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider ELVA 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.
