I'm Looking to Buy 3 Stocks, Even as Momentum Isn't Making It Easy
New buys are very difficult amid continuing strong market momentum.
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Positive market momentum continues to roll, crushing the anticipatory bears who are convinced that negative arguments will suddenly matter. Tariffs and inflation are unable to stop the bulls, and so far, there isn't any significant "sell the news" reaction to second-quarter earnings.
We have FOMO plus a wall of worry adding a tailwind to the market. Breadth is running three to one positive on Monday morning, and there are more than 700 stocks hitting new 12-month highs. Another positive is that bonds have bounced back sharply and are driving down interest rates.
The biggest problem that investors face is that many charts are extended, making it tough to find entries. If you have taken profits recently, it is very difficult to put the cash back to work unless you are willing to chase entry points.
A good example of a situation where I chased an entry is Harrow, Inc. HROW. I had a small position and wanted to add more so I paid up for it Monday as it sits near highs. My plan is to add more on weakness, but I'm not sure it is going to pull back very much.
Harrow stock received an overweight rating from Cantor Fitzgerald with a price target of $76, which is more than double the current price. The analyst stated Harrow is on a path to become the leading diversified U.S. ophthalmology company, has a "very good" setup for Q2, and guidance for 2025 is potentially conservative.
Another name that has a very attractive chart is Sagimet Biosciences (SGMT), and I have made it my Stock of the Week. This is a good example of a chart that is near highs but has been consolidating for a while and is not extended.
Last week, I discussed my thinking that Meta META may be the best Magnificent Seven play during earnings season. The stock subsequently found support and turned up nicely, and now is in a good position to push higher in anticipation of its report. I'm looking to add to my position.
This is great market action right now, but it is not easy to put cash to work and make new buys. I'm sticking with existing positions but being patient with deploying more capital.
At the time of publication, Rev Shark was long HROW, META and SGMT.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider SGMT 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.
