As Stocks See Free Fall, Here's Where I'm Looking to Add

Poor market action continued on Tuesday morning, but there was some weak bounce action. There is more Trump tariff news causing problems, but so far, there hasn’t been any major reaction to it.

Breadth is positive at around 5,600 gainers and 3,700 losers, and the Magnificent Seven is up about 1.3%, but there is a high level of nervousness, and there are no signs that folks on the sidelines are worried about missing out.

The biggest problem in a market like this is that the business media, pundits and most investors are focused on trying to nail the exact market low. That is understandable if you are a day trader or a very short-term swing trader, but if you are looking for the best low-risk, longer-term entry point, then the exact low is not important.

What is important in trying to build longer-term positions is buying a trend. The goal is to buy a stock when it has the best chance of making a sustained upside move.

The problem with trying to buy the exact low is that no new support has developed when a stock is in free fall. The best pattern doesn’t appear until there is a failed bounce or two and a retest of the lows. That establishes support and becomes the key support.

Here is an example of a chart I’m watching that has been in free fall but has yet to establish clear support. I have a position and will ramp it up substantially once I feel that there is some support. 

Gambling.com Group GAMB received an initial overweight rating and $20 target from Cantor Fitzgerald on March 5, but due to market conditions, it rolled over and is heading straight down.

In addition to GAMB, I have similar positions in Palantir Technologies PLTR, Ultragenyx Pharmaceuticals RARE, ADMA Biologics ADMA and others. In all cases, I am waiting for chart improvement and better support before I ramp up positions.

At the time of publication, DePorre was long GAMB, PLTR, RARE and ADMA.