I'm Not a Slobbering Bull Yet, But the Market Is Looking Tastier
This sector in particular looks more and more delicious....
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Market action is positive following Nvidia's (NVDA) better-than-expected earnings report. There was a slight dip after the open as some profit-taking occurred, but buyers stepped up and are pushing the indexes higher. Breadth is solid with about 80% of stocks in positive territory, however, there are only about 105 stocks at new highs due to the recent corrective action.
It’s a good start to a market turn and may help to set the stage for the positive seasonality that many bulls have been anticipating. I want to see how things close today and how charts look before I become more aggressive with my buys.
I mentioned TeraWulf (WULF) on Monday as a bottom-fish buy. That worked well and is up about 35% from the lows. I’m taking some partial profits and will look to build my position on future pullbacks.
I like the price action, but I don’t trust it yet and want to see more chart development before I put substantial capital back to work. I don’t see much with great support so far.
This is the sort of market action that can create bursts of fear of missing out. We saw the same thing on Wednesday morning, but it fizzled out quickly. So far, this is holding, but there doesn’t appear to be much wild chasing. Nvidia is off its highs, and overall volume doesn’t appear to be running at exceptional levels.
One of the most notable things on my screens is that biotechnology (IBB) is breaking out to another new high. This group has been substantially outperforming lately, and the best charts I see are all biotechs. A few examples are BridgeBio (BBIO), Alto Neurosciences (ANRO), and ADMA Biologics (ADMA). Biotech has underperformed for years, so there is plenty of upside before it catches up to the rest of the market.
I’d like to be slobbering bull right now, but the price action isn’t good enough in my view to throw caution to the wind. If this is the start of positive seasonality to end the year, there is still plenty of time to move into position for the holiday celebrations.
At time of publication, DePorre was long WULF, ANRO, BBIO, ADMA.
