Sometimes, It's the More Obscure Corners of the Market That Offer Opportunities
People have ignored energy stocks because they're only 3% of the market. Is energy worth a look?
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The Market
You see how that works? The down-and-outers finally get their day in the sun, and then boom, it’s over. The lights go out.
I know many will feel as if today was a big failure. Maybe it was, but the selling didn’t really pick up. Not yet. It was more as if much of the buying stopped. In fact, a lot of stocks have been churning for a week now.
Let me note a few things. In the last few days, we have seen nuclear stocks, quantum stocks, and space stocks be the place to be. Energy finally got a lift, too. But you know what I heard all day? I heard that energy is only 2 or 3% of the S&P. Okay, fine. Does that mean you can’t make money in it?
Or if energy is only 2 or 3% of the S&P, what do you think rocket stocks are? Or nuclear stocks. Like, why is being such a small percentage of the index so terrible, yet you love space stocks?
How’s this for a statistic: Quantum Computing QUBT, of which you will see the chart below, traded 131 million shares today. Do you know how many shares outstanding it has? 141 million shares. Yet folks are worried they might own energy stocks. Geesh.
I do want to note that the Mid-Caps have still not made a higher high (than May), and while the Bank Index eked out a minor higher high (by pennies) it too has stalled out. The Transports, too, haven’t been able to get over the May high.
The market will be back to a short-term overbought reading by the end of the week, so I still expect to see a bout of volatility in the coming weeks.
New Ideas
I have liked VGK, an ETF to be long Europe for months now, but in the last week or so, it has gotten quite tired. I have had a measured target in the low 80s, but to me, it has begun to feel like the Leaning Tower of Pisa, meaning it needs a good shakeout. Down to that line would go a long way toward relieving this lethargy.
Today’s Indicator
The Volume Indicator is still overbought.
Q&A/Reader’s Feedback
Novo Nordisk NVO finally rallied. In the near term, it has resistance from filling the gap at 82 and then 85. I think it would be buyable on a pullback near 70 if it can get there.
I liked Quantum Computing QUBT when we looked at it a few months ago. It has now closed that gap at 16 and is into resistance. I think that spike high up in the mid-20s will be a problem. The only place I see it as buyable now is back near 14. It is too overextended for me to chase here.
Exxon XOM is going to struggle at 110-112 unless it can gap up over that area. If it can gap up, then I’d look for a move to that 116 resistance zone.
Pfizer PFE finally got over 24, like a miracle. I think that 25-ish area has far too much resistance for it to push through on the first time up. I might take another look at it around 23-23.50 on a pullback.
I believe we looked at Nano Nuclear NNE when it was at 37 recently, and I liked it into a dip, which it has done. Now it needs to blast over that line. If it can do that, I’d put the next target in the mid-40s, near that January high, or just below it to fill that gap. If I am wrong and the stock can’t get over the line, I’d be cautious.
I don’t know what to do with AST SpaceMobile ASTS because it has been green for eight straight days and is right up at its high from a year ago. Yet it hasn’t done anything wrong. If it can pull back to 30-ish, I’d get interested. Alternatively, some sideways action would be better, but the stock doesn’t seem to know sideways; it seems to be either up or down.
If Qualcomm QCOM can hold 155 on a pullback, then I think it can rally again to that 170 area, but there is still a lot of wood to chop on this chart.
