Alpha Stocks Archives - Stealth Trades Premium Content

Weekly Update: The Bear Market is Dead

Ross Givens on July 29, 2022

Stocks continued to power higher this week, which so far confirms what my indicators are telling me…

The low is in, and we are at the start of a new bull market.

You should have received a text alert from me with a short YouTube video the other week highlighting the major signals that the market has turned.

If you need a refresher, click here to watch the video now.

Since the low made on June 17, we’ve seen four follow-through days on the S&P 500 as well as two 90% up-volume days.

TradingView Chart — ***Daily Chart of S&P 500 Index with Volume Indicators – Source: TradingView***

This shows high-conviction buying, and the market is rallying because of it.

We have also seen 10 days in a row of net new highs on the Nasdaq.

In a bear market, we tend to see more stocks making new lows than stocks making new highs.

In a bull market, the opposite is true.

The 10-day new high streak is the longest we’ve seen since the market began selling off in January.

The percentage of stocks above their 50-day moving averages is now a bullish 65%.

And the percentage above their 200-day moving averages seems to have bottomed and is now surging higher.

Chart, line chart

Description automatically generated — ***Percentage of Stocks Above 50-Day (left) and 200-Day (right) Moving Averages – Source: TradingView***

With so many indicators confirming the bear market is dead, it is time to start looking for good investments.

That is why I issued a buy recommendation for McKesson Corporation (MCK) this week.

Our New Stealth Trade

Today, let’s break down that trade in a bit more detail…

When it comes to picking stocks, I take a top-down approach. It is a simple three-step process:

Market Direction
Market Sector
Stock

First is market direction. For all the reasons we just discussed, I believe the market is now moving higher.

Next, I want to find the strongest groups or sectors in the market.

All things being equal, a bullish setup in a strong sector is going to outperform a bullish setup in a weak sector nine times out of 10.

It’s not rocket science. Stocks tend to move in herds.

Earlier this year, it was oil, chemical and shipping stocks leading the way. Pick any name in the group, and there’s a good chance you made money.

Right now, I’m seeing strength in solar, medical, consumer services and food/grocery stocks.

MarketSmith breaks the stock market down into 197 industry groups and ranks them based on their performance.

Here is the top 10%…

Table

Description automatically generated — ***Top Industry Groups – Source: MarketSmith***

This is where I like to focus my scans, because I know the odds of finding a big winner are vastly improved by sticking to the top groups.

In the “wholesale drug supply” group, McKesson is the top stock in terms of both relative strength and earnings per share.

And a quick look at the chart shows a textbook breakout setup…

The stock formed a four-month base with resistance at $335 and a nice tight pivot point on the right side of the chart.

Relative strength was steadily rising, and all major moving averages were trending higher.

The up/down volume ratio was bullish, and there were several high-volume accumulation days within the base.

None of this is a guarantee the trade will make money. But the odds are definitely stacked in favor of a profitable outcome.

I’ll keep you in the loop as this trade progresses, and I’ll be sure to issue an alert as soon as it’s time to take profits.

Stay tuned!

Stealth Trades Watchlist

Going forward, your Weekly Updates will look a lot more like this one…

They’ll include more information on our current stock recommendations and put less of a focus on our weekly Watchlist.

Don’t worry – The full Watchlist is still available on our website right here!

But it’s important to remember that not all of the stocks on our Watchlist are actionable.

When it’s time to make an official recommendation for our Trade Tracker, I’ll let you know on our Alerts page right here!

Join the Insiders

Now, if you’ve ever wondered how I developed a proven track record of trading along the insiders like corporate CEOs, CFOs, executives and board members…

Do yourself a favor and check out my latest Insider Effect presentation!

Corporate insiders are always buying or selling shares in the companies they operate. These folks have a footing of knowledge that Main Street investors simply do not.

I talked more about this in my latest presentation, which you can watch at your convenience right here.

I covered my strategy for trading alongside corporate insiders and generating potentially massive gains as a result.

Just click here to learn more about my Insider Effect strategy and see what you could be missing out on…

Live Coaching Session

Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.

We’ll send you a login reminder that morning, just so you don’t forget.

We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.

You need to attend this session to get the most from your subscription!

In the meantime, you can watch the replay of our latest Stealth Trades session right here.

Best wishes for your trading,

Ross Givens

Editor, Stealth Trades
P.S. Click here to learn more about my Insider Effect strategy and see what you could be missing out on.

Weekly Update: My Good Luck Charm Has Just Arrived

Ross Givens on July 22, 2022

I’m elated to announce that my wife gave birth to our daughter this past Sunday.

So far, she seems to be the good luck charm this market desperately needed.

This week, the S&P 500 saw two 90% up volume days, a valid follow-through day and a bullish break of the recent swing high.

It also reclaimed its 50-day moving average.

There were also more stocks making new highs than new lows every day last week.

This was the first time we have seen that since the rally in late March.

None of these factors equate to a guarantee that stocks will go up from here…

But when all of my internal indicators fire to the long side in the same week, I start buying.

So, I have increased exposure in my personal accounts.

Based on how those trades work out, I will either bump my size up again if the trades make money on the whole or go back down to quarter size if they don’t.

Join Me on Monday

Before we get to this week’s Watchlist, I want to remind you to join me on Monday afternoon for our Stealth Trades Live Class at 3:00 p.m. ET…

I’m going to outline our plans for trading during this rally, and we’ll take a look at our Watchlist stocks and other potential ideas in more detail.

So again, please join me right here on Monday at 3:00 p.m. ET!

In the meantime, here are the three top trades I’m watching this week…

Enphase Energy, Inc. (Long Idea)

I have been talking about the strength in solar stocks for several weeks now, and Enphase Energy, Inc. (ENPH) is one of my favorites.

Surge score: 98/100

% Above 52-wk low: 93%
Sales growth: +46%
Return on Equity: 74%
Triple momentum: yes

The stock is completing a textbook breakout pattern, with volatility compressing as pullbacks have shallowed from left to right.

The pivot area is around $220.

A move above that level has a high probability of leading to a strong move to the upside.

McKesson Corporation (Long Idea)

Despite a hideous bear market in the first half of 2022, McKesson Corporation (MCK) stock has been surging.

Surge score: 97/100

% Above 52-wk low: 79%
Sales growth: +12%
Return on Equity: N/A
Triple momentum: yes

Shares are up 34% year-to-date, and most of that move occurred in just the first quarter.

After making new all-time highs, the medical supply company began consolidating in April and now looks ready to break out for another leg higher.

There are definite signs of accumulation in the base, and volume is drying up as price is tightening at the end… Exactly what we want to see.

Consider buying on a move above $336 with a sell stop at $315. This equates to a 6% risk on the trade.

Consolidated Water Co. Ltd. (Long Idea)

Consolidated Water Co. Ltd. (CWCO) is a small-cap company focused on treating and supplying water products to customers in the Cayman Islands, Bahamas and British Virgin Islands.

Surge score: 97/100
% Above 52-wk low: 61%
Sales growth: +14%
Return on Equity: 2%
Triple momentum: yes

The stock made a powerful move higher in May, advancing 40% in just one month. Shares then pulled back and consolidated in the $14 area.

A look at the volume candles below the chart shows clear signs of accumulation (large buying) and very little selling.

This is a good sign that may point to institutions building large positions in the stock.

Consider buying CWCO on a move above $15.00.

This is a smaller stock with lighter trading volume, so I want to see a large volume spike on the breakout for confirmation.

Don’t Miss My Most Anticipated Event Yet – “Operation: FIRE Trader”

Before I end today’s thoughts, I wanted to tell you about my breakthrough training event I’m putting together next Tuesday.

You see, while the country may seem in shambles at the moment…

There’s still a small group of traders who have consistently used a prophetic trading sequence to help them snatch gains of 941%… 1,379%… and 49,900% in both bull AND bear markets.

And since I’ve personally leveraged this same method to grow my own nest egg…

I’m officially shedding a light on this groundbreaking tool that’s infamously known for being “The #1 Best Performing Trading Strategy of All-Time…”

In fact, based on a 1,012 page white paper study done by expert analysts…

They found that out of 307 different occurrences this sequence occurred in the market… EVERY SINGLE TRADE rose in profit.

This is a HUGE deal…

Which is why, given the circumstances…

Having a dependable and precision accurate strategy in your arsenal is more important than ever.

I’ll be going live on Tuesday, July 26th at 1 p.m. EST to reveal all the shocking details…

Plus, I’ll even show you how you could potentially bank $137k in just five trades.

Again, this is my most anticipated event I’ve ever put on at Traders Agency…

So, you’ll definitely want to make sure you’re there to see all of the evidence I share.

All you have to do is click here now to RSVP and secure your seat for “Operation: FIRE Trader.”

If you have more questions or comments, please send them to support@tradersagency.com.

Live Coaching Session

Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.

We’ll send you a login reminder that morning, just so you don’t forget.

We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.

You need to attend this session to get the most from your subscription!

In the meantime, you can watch the replay of our latest Stealth Trades session right here.

Best wishes for your trading,

Ross Givens

Editor, Stealth Trades
P.S. Click here to register for my special one-time training event of “Operation: FIRE Trader”… You won’t want to miss this!

Weekly Update: Not Out of the Woods Yet

Ross Givens on July 8, 2022

As I write this on Friday morning, the Nasdaq is up roughly 2% for the week.

The S&P 500 recorded four positive days in a row to start the week, and we are beginning to see signs of institutional buying.

Thursday was an 88% up-volume day, meaning 88% of the volume was on the advance.

I’ve been waiting for a 90% up-day to signal that the low is in, and this was darn close…

Graphical user interface, chart

Description automatically generated — ***Daily Chart of S&P 500 Index with Market Breadth & Volume Indicators – Source: TradingView***

The same areas of the market I have been highlighting over the last few weeks continue to show strength – mainly biotechnology and solar stocks.

If you took the trade in Chinook Therapeutics, Inc. (KDNY) from last week’s Stealth Trades Watchlist, you should have seen a nice quick gain as the stock surged 13% in just four days.

Alpha Stocks members took the trade and already locked in partial profits.

Stay Cautious

Make no mistake – The market is not out of the woods yet, and this may end up being nothing more than a tradeable rally.

But I have started to increase exposure in my personal account.

If I see decent gains in these pilot positions, I will continue to buy news setups and increase my size accordingly.

Now, take a look at the daily chart of the Invesco QQQ Trust (QQQ) below, which tracks the Nasdaq index…

Chart, histogram

Description automatically generated — ***Daily Chart of Invesco QQQ Trust (QQQ) – Source: TradingView***

This week’s positive action prevented the index from making another lower low.

Should it take out the previous week’s high, this downtrend could finally break.

Join Me on Monday

Oil, natural gas, copper and most other commodities have fallen sharply over the last few weeks.

This is potentially a good sign for stocks as it could be a signal that inflation is finally subsiding.

As an investor, it is important to separate the economy from the stock market.

Remember… The market is a discounting mechanism. All assumptions about the macroeconomic picture are largely already priced in.

The market will bottom as soon as signs point to conditions improving. But it typically takes many months or even years before a recession ends.

With that in mind, I hope you’ll join me on Monday afternoon for our Stealth Trades Live Class at 3:00 p.m. ET…

I’m going to be outlining our plan for dealing with a market environment like this, and we’ll take a look at our Watchlist stocks and other potential ideas in more detail.

So again, please join me right here on Monday at 3:00 p.m. ET!

For now, we are indeed in a tradeable rally, and I have three new long trades to share with you this week…

Sierra Wireless, Inc. (Long Idea)

Sierra Wireless, Inc. (SWIR) is a Canadian designer of wireless and embedded modules, gateways and routers.

Computer networking stocks are not showing strength as a group, but SWIR has a Surge Score of 99/100.

In other words, it is outperforming 99% of stocks.

Earnings and sales were both up big last quarter, and analysts are calling for further growth through 2023.

Surge score: 99/100

% Above 52-wk low: 86%
Sales growth: +60%
Return on Equity: N/A
Triple momentum: yes

The chart looks great as well. The up/down volume ratio is incredibly bullish at 1.86, and institutional buyers are flocking to the stock.

SWIR has formed a pivot at the $25 level.

In a perfect world, it would trade sideways here for a few days to absorb any sellers near the highs.

That would make it an even higher conviction buy for me.

But demand for this stock is high. Consider buying on new highs with a 10% stop.

Seagen Inc. (Long Idea)

Seagen Inc. (SGEN) is a biotech that has come ripping off the lows.

Shares are up 70% in just six weeks, with almost no pullbacks along the way.

Surge score: 96/100

% Above 52-wk low: 71%
Sales growth: +28%
Return on Equity: N/A
Triple momentum: yes

At this point, price has been consolidating for almost two weeks near the $180 level.

There is also a fundamental catalyst in play…

Reuters reported that Merck & Co., Inc. (MRK) is in advanced talks to buy Seagen at a price above $200 per share – more than 10% above where it trades today.

Consider buying SGEN above $182 with a stop at $167.

United Therapeutics Corporation (Long Idea)

United Therapeutics Corporation (UTHR) is another biotech stock showing tremendous strength as the general market is coming off its lows.

The stock is just entering Stage 2 and currently trades just 1% off its all-time high.

Price action is tightening, pullbacks are becoming shallow and volume dried up for several days.

This is exactly what we want to see pre-breakout…

Surge score: 97/100
% Above 52-wk low: 51%
Sales growth: +22%
Return on Equity: 20%
Triple momentum: no

The fundamentals are also strong… Unlike many biotech stocks, which have limited revenue and negative earnings, United Therapeutics is showing solid growth in both areas.

Earnings and sales grew by 44% and 22%, respectively, in the most recent quarter.

This stock is a potential market leader that could make a large advance if the market has indeed found the bottom.

Consider buying UTHR here with a stop at $220.

One Last Chance to Join Alpha Stocks

If you’ve been struggling in this wild stock market environment, with the major indexes down double-digits and many of last year’s leading stocks down over 50%…

Consider checking out my Alpha Stocks trading service, which focuses on only the very best stock trading opportunities — both on the long side as stocks rise and on the short side when markets are crashing.

Alpha Stocks recently recorded a 21.6% gain on the downside in only eight days as Pegasystems Inc. (PEGA) stock plunged…

As well as a gain of 21.3% in just 15 days in Permian Basin Royalty Trust (PBT).

Last Wednesday, we closed another winner in ProPhase Labs, Inc. (PRPH) for a two-day gain of 5.8%.

And as I alluded to above, we just closed out another two-day winner on a third of Chinook Therapeutics, Inc. (KDNY) for a gain of 8.4%.

Of course, we also hold a live members-only session every Monday so that subscribers can ask questions and get guidance about our trades.

Enrollment is about to close, so click here now to register for a special Alpha Stocks presentation this afternoon before it’s too late…

Live Coaching Session

Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.

We’ll send you a login reminder that morning, just so you don’t forget.

We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.

You need to attend this session to get the most from your subscription!

In the meantime, you can watch the replay of our latest Stealth Trades session right here.

Best wishes for your trading,

Ross Givens

Editor, Stealth Trades
P.S. If you’re finally ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Weekly Update: Filter Out the Noise… Focus on the Big Picture

Ross Givens on July 1, 2022

As I write this on Friday afternoon, the Nasdaq is down 5.6% for the week.

As expected, the recent short-term bounce was a great opportunity to take a few short trades from better entry points.

And if you took the short trade idea in ZIM Integrated Shipping Services Ltd. (ZIM) last week, you are sitting on a hefty profit.

The market failed to post a follow-through day or 90% up volume day last week – key signs I’m waiting for to signal the market may have found the bottom.

We are still seeing more stocks making new lows than new highs. And breakouts to the upside are still meeting selling and mostly reversing lower.

Roundtrip Market

As a trader, this can be extremely frustrating.

For example, here’s a trade we took in my Alpha Stocks service this week…

Chart

Description automatically generated — ***65-Minute Chart of ProPhase Labs, Inc. (PRPH) – Source: TradingView***

We bought ProPhase Labs, Inc. (PRPH) on the breakout at $11.97 per share. The next day, we were up over 17%.

As prudent traders, we took profits on part of the position at the top and raised our stop to breakeven.

That turned out to be the right move, as the stock reversed all the way back over the next two days.

We got out with a nice average gain, but unless you are using very wide stops (which I do not recommend) and taking on a lot of risk, this environment is making it very difficult to hold onto stocks for longer-term moves.

The Big Picture

So, let’s take a step back and look at the big picture…

I’ve found the easiest way to “remove the noise” is to look at a weekly chart rather than a daily or hourly chart.

Graphical user interface, chart, line chart, histogram

Description automatically generated — ***Weekly Chart of Invesco QQQ Trust (QQQ) – Source: TradingView***

The Nasdaq has been unable to get above its 50-day moving average for several months. Even the 200-day has rolled up and is now pointing down.

We have also seen several weeks of high-volume selling, which is a sign that institutions have been dumping stocks en masse.

Until that changes and we begin to see signs of meaningful buying, there is no reason to be aggressively buying or having much exposure.

My personal account has been primarily in cash since November.

I continue to make short-term trades and take small positions here and there, but I have not been more than 25% invested at any point this year.

This is how I have been able to keep drawdowns to a minimum.

Progressive Exposure

I don’t have a crystal ball. Like everyone else, I cannot predict bear markets.

But I do understand “progressive exposure.” It works like this…

Look at your last four to five trades. Did you make money?

If not, cut your trading size in half.

After the next five trades, look at your results. Did you make money?

If not, cut your trade size in half again. If you did, bump it up.

It’s not rocket science. But it’s a powerful technique for minimizing drawdowns and keeping your losses small.

When your trades are not working, you will be trading very small amounts of money and taking very small losses.

When trades are working, you will be trading very large size and therefore having big wins.

Join Me on Monday

If you got into trouble this year and suffered a big drawdown, don’t beat yourself up.

The best money managers in the world have lost billions this year. Tiger Global, one of the top hedge funds in the world, is down by half.

The important thing is to learn from your mistakes. Take the lesson and move on.

With that in mind, I hope you’ll join me on Monday afternoon at 3:00 p.m. ET for our live Stealth Trades session…

I’m going to be outlining our plan for dealing with a market environment like this.

We’ll talk about inflation and how it is impacting the markets we track, and we’ll take a look at our Watchlist stocks and other potential ideas in more detail.

So again, please join me right here Monday at 3:00 p.m. ET!

Now, we’re focused on making money in the second half of the year, so here are three trade ideas for this week’s Watchlist to kick off the new quarter and the second half of 2022…

Chinook Therapeutics, Inc. (Long Idea)

I added Chinook Therapeutics, Inc. (KDNY) to the Watchlist last week, and it did not rise enough to hit our buy trigger.

As I mentioned in the previous update, KDNY is a biotech stock coming out of a huge two-year base pattern.

Surge score: 97/100
% Above 52-wk low: 79%
Sales growth: +671%
Return on Equity: N/A
Triple momentum: yes

This week saw the stock pull back slightly to the 21-day moving average.

This is also a previous breakout level that could hold as support.

Traders could buy the stock here and use a 10% stop below the 50-day moving average.

The Howard Hughes Corporation (Short Idea)

The Howard Hughes Corporation (HHC) stock has been decimated over the last couple of months.

Shares of the real estate developer and manager fell from $105 to a low around $60 in just two months…

Surge score: 26/100
% Above 52-wk low: 105%
Sales growth: +N/A
Return on Equity: N2%
Triple momentum: yes (short)

Shares are seeing a short-term bounce to the 21-day line that should continue to act as resistance.

Consider selling HHC short here near the $70 mark.

Citigroup Inc. (Short Idea)

When looking for breakout stocks to buy, I want the best of the best… Stocks with big earnings growth, big sales growth, bullish forecasts and high relative strength.

Identifying names about to break out lower means we want the opposite… Declining sales and profits, poor relative strength and a clear downtrend on the chart.

Citigroup Inc. (C) checks every box…

Surge score: 35/100
% Above 52-wk low: 2%
Sales growth: -1%
Return on Equity: 11%
Triple momentum: no

This dumpster fire of a stock has been moving lower for a year now.

It is currently forming a shelf with support at $45.

If it breaks this level and makes a new low, consider going short with a stop at $49.20.

Finding Real Alpha

With the major indexes down double-digits and many of last year’s leading stocks down over 50%, consider checking out my Alpha Stocks trading service.

We recently recorded a 21.6% gain on the downside in only eight days as Pegasystems Inc. (PEGA) stock plunged…

As well as a gain of 21.3% in just 15 days in Permian Basin Royalty Trust (PBT) as that stock broke out of its range.

And this past Wednesday, we closed another winner in ProPhase Labs, Inc. (PRPH) for a two-day gain of 5.8%.

We also get together every Monday for an hour-long live session so that subscribers can ask questions and get guidance about our trades.

If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Live Coaching Session

Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.

We’ll send you a login reminder that morning, just so you don’t forget.

We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.

You need to attend this session to get the most from your subscription!

In the meantime, you can watch the replay of our latest Stealth Trades session right here.

Best wishes for your trading,

Ross Givens

Editor, Stealth Trades
P.S. If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Weekly Update: The Next Leaders Emerge from the Market Rubble

Ross Givens on June 24, 2022

In our live Alpha Stocks session this past Monday, I pointed out that stocks were severely oversold and I was looking for a short-term bounce.

Stocks rose as expected during the following week, but as I write this on Friday morning, the rally seems fairly unimpressive.

The S&P 500 is up roughly 4% from last week’s close, but we have not seen aggressive buying volume.

A picture containing chart

Description automatically generated — ***Daily Chart of S&P 500 Index with Volume Indicators – Source: TradingView***

We managed to avoid any new 90% down volume days, but we did not see a 90% up volume day either…

That’s a sign I am waiting for to signal that buyers might be returning.

The number of stocks making new lows continues to outpace the ones making new highs as well.

While it was good to see the ratio shrinking last week, a healthy market will have stocks breaking out to new highs and fewer names undercutting prior lows.

Unfortunately for the bulls, it has been over two weeks since we have seen a day with net new highs.

Showing Promise

That being said, a few groups of stocks are starting to show promise.

It is vitally important to watch which stocks are making highs when the market is making lows.

This is usually the next group of market leaders that can advance several hundred percent once the next bull market begins.

Chemical, shipping and energy stocks were the clear leaders in 2022. But their reign quickly came to an end.

Over the last two weeks, the Energy Select Sector SPDR Fund (XLE) is down 23%.

Shipping stocks like ZIM Integrated Shipping Services Ltd. (ZIM), Star Bulk Carriers Corp. (SBLK), Genco Shipping & Trading Limited (GNK) and Grindrod Shipping Holdings Ltd. (GRIN) have fallen 25%-30% each.

And Dow Inc. (DOW) has wiped out all of its 2022 gains in just three weeks.

So… who are the new leaders?

Bullish Biotechs

So far, the new leaders all seem to be biotechnology companies. The SPDR S&P Biotech ETF (XBI) rose over 12% last week.

And stocks like Meridian Bioscience, Inc. (VIVO), Chinook Therapeutics, Inc. (KDNY), Immunocore Holdings plc (IMCR), Allogene Therapeutics, Inc. (ALLO) and Vertex Pharmaceuticals Incorporated (VRTX) are all showing a lot of strength on increasing volume.

The increase in volume is a crucial distinction that is often overlooked by amateur traders.

We want to see heavy buying from large institutions as they are building up positions. And volume is the secret footprint that reveals this activity.

I am also seeing strength in several solar energy stocks. Daqo New Energy Corp. (DQ), Enphase Energy, Inc. (ENPH), SolarEdge Technologies, Inc. (SEDG), JinkoSolar Holding Co., Ltd. (JKS) and a few others are beginning to set up as potential buys.

The general market, however, is still in no-man’s land. It has not yet shown enough strength to start heavily buying.

The indexes are also too far extended to safely enter a good short position.

Therefore, risk-averse traders might consider sitting out for the week until the market shows where it wants to go.

The Nasdaq index, represented below by the Invesco QQQ Trust (QQQ), is beginning to tighten up and coil before making its next move.

A screenshot of a video game

Description automatically generated — ***Daily Chart of Invesco QQQ Trust (QQQ) – Source: TradingView***

Which direction the market moves next remains to be seen, but I have enough confidence in this week’s Watchlist ideas to bring them to you today.

You’ll find two new long ideas and one new short idea added to the Watchlist below…

Chinook Therapeutics, Inc. (Long Idea)

Chinook Therapeutics, Inc. (KDNY) is a biotech stock coming out of a two-year base pattern.

Here’s how the chart is setting up…

And here’s how the stock is setting up with my Stealth System…

Surge score: 97/100
% Above 52-wk low: 79%
Sales growth: +671%
Return on Equity: N/A
Triple momentum: yes

The company has three drugs in its development pipeline, one of which is in Stage 3 clinical trials.

Good news from that trial could deliver a big surge in the share price.

KDNY has seen several weeks of big volume on its move to the highs. Consider buying the breakout with an 8% stop.

Immunocore Holdings plc (Long Idea)

Immunocore Holdings plc (IMCR) is another biotechnology stock showing a lot of strength.

Here’s how the chart is setting up…

And here’s how the stock is setting up with my Stealth System…

Surge score: 96/100
% Above 52-wk low: 102%
Sales growth: +159%
Return on Equity: N/A
Triple momentum: yes

IMCR just completed a beautiful base pattern with volatility compressing as pullbacks shallowed from left to right – exactly the kind of price action we like to see.

Consider buying this stock here around the $37 mark with an 8% stop loss.

ZIM Integrated Shipping Services Ltd. (Short Idea)

I added ZIM Integrated Shipping Services Ltd. (ZIM) to the Watchlist as a short last week, and it is finally hitting the entry trigger.

Here’s how the chart is setting up…

And here’s how the stock is setting up with my Stealth System…

Surge score: 90/100
% Above 52-wk low: 96%
Sales growth: +113%
Return on Equity: 191%
Triple momentum: no

The stock was a market leader in 2022 as marine shipping companies have been able to charge insane rates due to slowdowns in the supply chain.

Earnings surged roughly 10-fold after the pandemic and the stock has done the same.

But President Biden basically declared war on ZIM and the other handful of companies that control the bulk of cargo shipments from overseas thanks to what the White House believes is “price gouging.”

After an 803% move higher in 2021 and early 2022, ZIM has finally started rolling over.

Shares have seen heavy selling volume over the last few weeks, and the stock is now resting on its 200-day moving average for the first time ever.

I would consider selling ZIM short with a buy stop at $52 for protection.

Did You Miss the Big Reveal?

Were you able to join my colleague and expert trader Anthony Speciale for the unveiling of Project 6×6 and his brand-new trading service, Part Time Profits?

If not, you need to check the encore presentation right here!

Anthony revealed the exact “1% trading blueprint” he used to go from working day and night as an auto mechanic…

To banking $100,000+ in real trading profits six straight years in a row.

All by only logging on to his computer from the comfort of his home for 1-2 hours every week…

Click here to watch the full replay now!

Live Coaching Session

Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.

We’ll send you a login reminder that morning, just so you don’t forget.

We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.

You need to attend this session to get the most from your subscription!

In the meantime, you can watch the replay of our latest Stealth Trades session right here.

Best wishes for your trading,

Ross Givens

Editor, Stealth Trades

P.S. Were you able to join my colleague and expert trader Anthony Speciale for the unveiling of Project 6×6 and his brand-new trading service, Part Time Profits?

If not, you need to check the encore presentation right here!

Weekly Update: Hot CPI Reading Sends Stocks South

Ross Givens on June 10, 2022

The market fell apart this week, with the Nasdaq 100 and S&P 500 each tumbling roughly 5%.

This was the worst week for stocks since January.

The catalyst? Inflation.

Consumer Price Index (CPI) numbers showed another record level for inflation on Friday.

The hope was that inflation had peaked and the May numbers would show signs of improvement. But the opposite happened…

The CPI rose 8.6% in May, which was a new 40-year high. Stocks responded in kind by selling off hard.

Engineering a Recession

Investors know the Fed has no choice but to aggressively raise rates and engineer a recession in order to fight this trend.

That could mean rate hikes of as much as 0.75% or 1% at the next meeting.

For me, that means it is highly likely the market will undercut the May 20 low and send the bear market on another leg down.

As we’ve discussed, the primary areas of strength in the market over the last six months have been energy, chemical and shipping stocks.

These sectors have made up the majority of our trade ideas and the biggest winners in my Alpha Stocks service.

But even these pockets of strength fell apart last week…

Eagle Bulk Shipping Inc. (EGLE) fell 15.7% on the week, while ZIM Integrated Shipping Services Ltd. (ZIM), another leader throughout the year, dropped 22.3%.

CF Industries Holdings, Inc. (CF), Genco Shipping & Trading Limited (GNK), Dow Inc. (DOW) and dozens of other top-performers all broke down below their pivot levels and undercut their 50-day moving averages.

For the time being, there seems to be nowhere to hide in this bloodbath.

Join Me on Monday

Bonds are down. Stocks are down. Digital currencies are down. Even gold, which typically rises during times of crisis, cannot seem to mount a rally.

I have been trading for over 15 years, and this is probably the most difficult environment I have ever seen.

Many traders I talk to are choosing to go to cash and sit out until things calm down.

But I am expecting lower prices and more downside in the markets.

With that in mind, I hope you’ll join me on Monday afternoon for our live Stealth Trades session at 3:00 p.m. ET…

I’m going to be outlining our plan for dealing with a market environment like this.

We’ll talk about inflation and how it is impacting the markets we track, and we’ll take a look at our Watchlist stocks and other potential ideas in more detail.

So again, please join me right here Monday at 3:00 p.m. ET!

Now, here are the three new short ideas I’m watching this week…

Grayscale Bitcoin Trust (Short Idea)

The Grayscale Bitcoin Trust (GBTC) is an exchange-traded fund that gives investors access to Bitcoin in the form of a security.

It trades like a stock and can be bought in any traditional brokerage account, so you don’t have to go through a digital currency exchange to trade it.

Here’s how the chart is setting up…

***Daily Chart of Grayscale Bitcoin Trust (GBTC) – Source: TradingView***

And here’s how the stock is setting up with my Stealth System…

Surge score: 16/100
% Above 52-wk low: 9%
Sales growth: N/A
Return on Equity: N/A
Triple momentum: yes (short)

There was long-term support near the $24 area, which broke in early May.

Since breaching this level, GBTC cannot seem to rally and has formed a shelf over the last several weeks.

Traders may consider selling short here or once GBTC breaks below the $18.80 level. I would place a buy stop at $21.00 for protection.

Green Brick Partners, Inc. (Short Idea)

Green Brick Partners, Inc. (GRBK) is a residential homebuilder, and the stock looks ripe for another move lower.

Homebuilders saw huge profits in 2020 and 2021 thanks to a construction boom and rapidly rising home prices. But the party is coming to an end.

Interest rates have more than doubled over the last six months, and the country is on the verge of recession.

With rates expected to rise even further, it is hard to imagine this not ending in collapsing home prices and a serious slowdown in construction.

Here’s how the chart is setting up…

***Daily Chart of Green Brick Partners, Inc. (GRBK) – Source: TradingView***

And here’s how the stock is setting up with my Stealth System…

Surge score: 75/100
% Above 52-wk low: 22%
Sales growth: +68%
Return on Equity: 25%
Triple momentum: no

GRBK has traded below its 200-day moving average (white line) since January.

Shares rallied back in the second quarter but are now failing and rolling over.

Traders could take a short position in the stock here with a buy stop above the swing high at $25.05 to risk 9% on the trade.

Skechers U.S.A., Inc. (Short Idea)

Since going public in 1999, Skechers U.S.A., Inc. (SKX) stock has regularly seen huge swings in both directions.

It mounts powerful rallies and suffers crippling falls. But if you can catch it at a turning point, the profits can be large.

Here’s how the chart is setting up…

***Daily Chart of Skechers U.S.A., Inc. (SKX) – Source: TradingView***

And here’s how the stock is setting up with my Stealth System…

Surge score: 71/100
% Above 52-wk low: 17%
Sales growth: +27%
Return on Equity: 14%
Triple momentum: yes (short)

SKX has been trending lower for almost a year with a series of lower lows and lower highs.

The stock rallied 25% off the May lows right into the dotted downtrend line and its 200-day moving average.

This is a low-risk area to try a short trade. Traders can place a buy stop on the other side of the 200-day line at $43.00 for protection. The risk is just under 7%.

Finding Real Alpha

With the major indexes down double-digits and many of last year’s leading stocks down over 50%, consider checking out my Alpha Stocks trading service.

We just scored a serious gain in Permian Basin Royalty Trust (PBT) in a little over two weeks.

We also recently recorded a huge winning trade on the downside in only eight days as Pegasystems Inc. (PEGA) stock plunged last month…

Alpha Stocks also provides option alternatives if that’s more of your style.

And we get together every Monday for an hour-long live session so that subscribers can ask questions and get guidance about our trades.

If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Live Coaching Session

Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.

We’ll send you a login reminder that morning, just so you don’t forget.

We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.

You need to attend this session to get the most from your subscription!

In the meantime, you can watch the replay of our latest Stealth Trades session right here.

Best wishes for your trading,

Ross Givens

Editor, Stealth Trades
P.S. If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Weekly Update: Back to Bullish This Week

Ross Givens on June 3, 2022

The lows that the S&P 500, Nasdaq 100 and Dow Jones all made on May 20 continue to hold.

Since then, we’ve seen a valid follow-through day on May 26 and strong action that week.

***Daily Chart of S&P 500 Index – Source: TradingView***

This week, the indexes were largely unchanged. As I’m writing this on Friday morning, the S&P and Nasdaq are flat to slightly lower for the week.

I’m happy to see recent gains are holding.

But for the coming week, I would like to see additional accumulation. In other words, I want to see stocks move up on increased volume.

Breakouts as a whole have been performing much better over the last couple of weeks.

We purchased Permian Basin Royalty Trust (PBT) in my Alpha Stocks research service on May 17, and shares soared 33% in just two weeks following a clear breakout.

Other names have also shown good progress.

So, unless the May 20 low is breached and the market begins another leg lower, I am now bullish on the market and looking for long trades.

Here are the three ideas I’m watching this week, all of which are setting up with clear horizontal breakout boundaries…

Howmet Aerospace Inc.

Howmet Aerospace Inc. (HWM) is a $15 billion specialty industrial company that engineers metal products for the aerospace and transportation industries across the globe.

The company is a major supplier for Boeing (BA).

Here’s how the chart is setting up…

***Daily Chart of Howmet Aerospace Inc. (HWM) – Source: TradingView***

And here’s how the stock is setting up with my Stealth System…

Surge score: 91/100
% Above 52-wk low: 36%
Sales growth: +10%
Return on Equity: 9%
Triple momentum: yes

As you can see in the chart above, HWM is completing a large “cup with handle” pattern.

This is a 13-month base, so it could lead to a sustained move higher if shares can break out on good volume.

Relative strength (RS) has been climbing all year, and the RS line has made nine new highs since May.

I’m looking for a strong move through $37.50 to signal a buy. Consider working a stop beneath the 21-day moving average at $34.70.

Enact Holdings, Inc.

Enact Holdings, Inc. (ACT) is a $4 billion private mortgage insurance company and a recent initial public offering (IPO) that is consolidating nicely at its highs.

I like trading newer issues since the first breakout can lead to a strong move to the upside.

Here’s how the chart is setting up…

***Daily Chart of Enact Holdings, Inc. (ACT) – Source: TradingView***

And here’s how the stock is setting up with my Stealth System…

Surge score: 94/100
% Above 52-wk low: 36%
Sales growth: -&%
Return on Equity: 14%
Triple momentum: yes

ACT is unique compared to most new issues in that it never undercut its initial price.

Most IPOs trade lower, sometimes significantly lower, after going public.

But ACT’s ability to hold up after its debut, especially in these market conditions, is a good sign of strength.

Consider buying ACT if it makes a new high. My buy trigger would be $24.90 with a stop at $22.85.

FLEX LNG Ltd.

FLEX LNG Ltd. (FLNG), with a market cap of $1.6 billion, builds and operates carrier vessels to transport liquefied natural gas.

The oil and gas sector continues to lead the market, so it is not surprising that FLNG keeps coming up on my strength scans.

Here’s how the chart is setting up…

And here’s how the stock is setting up with my Stealth System…

Surge score: 98/100
% Above 52-wk low: 163%
Sales growth: -8%
Return on Equity: 19%
Triple momentum: yes

After a big run higher in March, shares have consolidated over the last eight weeks.

Thursday saw a big up day on three times average daily volume as FLNG broke through resistance.

Consider buying at current levels, and use a 10% stop loss.

Finding Real Alpha

With the major indexes down double-digits and many of last year’s leading stocks down over 50%, consider checking out my Alpha Stocks trading service.

As I mentioned above, we just scored a serious gain in Permian Basin Royalty Trust (PBT) in a little over two weeks.

We have plenty of long ideas for the right stocks, but we’re also not afraid to go short.

We also recently recorded a huge winning trade on the downside in only eight days as Pegasystems Inc. (PEGA) stock plunged last month…

We short stocks, but we also provide option alternatives if that’s more of your style.

And we get together every Monday for an hour-long live session so that subscribers can ask questions and get guidance about our trades.

If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Live Coaching Session

Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.

We’ll send you a login reminder that morning, just so you don’t forget.

We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.

You need to attend this session to get the most from your subscription!

In the meantime, you can watch the replay of our latest Stealth Trades session right here.

Best wishes for your trading,

Ross Givens

Editor, Stealth Trades
P.S. If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Weekly Update: Ready to Sell the Snap-Back Rally

Ross Givens on May 20, 2022

Surprise, surprise… Another down week for stocks.

As I pointed out last week, the trend is unquestionably bearish.

The markets continue to see sellers in control with high volume on the downside.

As I write this update, the S&P 500 is trading within 2% of its 52-week low…

Not a good sign for bulls.

Retail Gets Rocked

Retail was hit hardest this week, which was certainly a contributing factor to the overall selloff.

Disappointing numbers from Walmart (WMT) and Target (TGT) triggered a selloff in consumer staple stocks, which is typically a sector that investors look to for safety.

In just three days, Target stock fell 30%, and Walmart was down almost 20%. Even Procter & Gamble (PG) was down double digits.

Higher prices at the grocery store are translating to lower sales and profits.

And what’s happening is that Wall Street is learning that the retail consumer, the biggest overall contributor to gross domestic product (GDP), is not as healthy as we thought.

Sell the Snap-Back

I remain bearish on the overall market and will again focus on short trades next week.

But it is important to remember that we could see a “snap-back rally” at any time.

If that happens, I will use it as a chance to sell the bounce and get short the worst-performing stocks as they approach their 50-day moving averages.

Historically, some of the biggest rallies occur during bear markets.

***Daily Chart of Nasdaq 100 Index — Source: TradingView***

Back in March, for example, the Nasdaq 100 jumped 17% in just two weeks.

But the selling soon resumed.

So, be cautious and don’t get sucked into buying until we have real confirmation that the bear has been killed.

I’ll let you know when the time comes. For now, here’s our latest list of short candidates…

SPX Corporation (Short Idea)

SPX Corporation (SPXC) is a $2.2 billion infrastructure equipment company for the heating and air industry.

Here’s how the chart is setting up…

And here’s how the stock is setting up with my Stealth System…

Surge score: 38/100
% Above 52-wk low: 13%
Sales growth: +7%
Return on Equity: 12%
Triple momentum: yes (short)

SPXC has been falling all year. The stock has stair-stepped its way down in a series of lower lows and lower highs.

Resistance can be found at the red 50-day moving average where I have highlighted sell zones on the chart above.

Consider shorting SPXC here with a stop above the $50 level.

Alarm.com Holdings, Inc. (Short Idea)

Alarm.com Holdings, Inc. (ALRM) is a $3.1 billion technology company that makes smart devices and systems for residential and commercial properties.

Here’s how the chart is setting up…

And here’s how the stock is setting up with my Stealth System…

Surge score: 38/100
% Above 52-wk low: 12%
Sales growth: +19%
Return on Equity: 19%
Triple momentum: yes (short)

You’ll notice the chart for ALRM looks almost identical to SPXC…

Both are following the same pattern of lower lows and lower highs and finding resistance at the 50-day.

I suggest using last week’s rally as an opportunity to sell ALRM short with a buy stop around the $65 mark.

If the trade works properly, the stock should make new lows in a week or two, which is where I would begin taking profits.

Advanced Micro Devices, Inc. (Short Idea)

Advanced Micro Devices, Inc. (AMD) is the $153 billion semiconductor company best known for its computing and graphics processors.

Here’s how the chart is setting up…

And here’s how the stock is setting up with my Stealth System…

Surge score: 59/100
% Above 52-wk low: 16%
Sales growth: +71%
Return on Equity: 52%
Triple momentum: yes (short)

The fundamentals for AMD actually look good. But as always, the market knows best…

And the market has been selling AMD en masse for the last six months.

This week, the stock tested its 50-day moving average (red line) without success.

The stock appears to be rolling over, giving investors a low-risk opportunity to play the short side.

Consider selling AMD short here with a stop above this week’s high at $104.25.

Where’s the Alpha?

With the major indexes down double-digits and many of last year’s leading stocks down over 50%, consider checking out my Alpha Stocks trading service.

We have plenty of long ideas for the right stocks, but we’re also not afraid to go short. We short stocks and we also provide option alternatives if that’s more of your style.

And we get together every Monday for an hour-long live session so that subscribers can ask questions and get guidance about our trades.

If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Live Coaching Session

Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.

We’ll send you a login reminder that morning, just so you don’t forget.

We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.

You need to attend this session to get the most from your subscription!

In the meantime, you can watch the replay of our latest Stealth Trades session right here.

Best wishes for your trading,

Ross Givens

Editor, Stealth Trades
P.S. If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Weekly Update: Preparing to Short the Oversold Bounce

Ross Givens on May 13, 2022

Stocks saw more selling this week with each of the major indexes making new 52-week lows.

As I pointed out in last week’s update, this was largely expected.

Institutions were clearly reducing exposure, as evidenced by the increase in volume on the acceleration down.

***Nasdaq Composite Index — Source: MarketSmith, Inc.***

Given the violence of the recent selloff, I believe we are due for an oversold bounce.

In other words, stocks could make a short-term rally before continuing the move lower.

Just as stocks do not go straight up, they do not go straight down either.

They tend to stair-step their way lower with short, weak rallies in between periods of heavy selling.

I remain bearish on the market until we see meaningful signs of recovery.

At a minimum, this would mean waiting for a follow-through day and preferably several days of meaningful buying and new stocks setting up in breakout formations.

Finding good targets to sell short can be difficult when they are falling rapidly.

If you are a regular attendee of my weekly Stealth Trades or Alpha Stocks live weekly sessions, you know I prefer to sell short off a bounce and against some level of resistance.

We did so in Alpha Stocks two weeks ago and made over 600% buying put options on Pegasystems Inc. (PEGA) before the stock fell more than 40%.

My trade ideas this week will again focus on short opportunities.

Each of these names are in clear downtrends, and I will be pointing out low-risk areas where I would be interested in selling them short.

Evercore Inc. (Short Idea)

Evercore Inc. (EVR) was a market leader following the pandemic selloff of 2020. Shares climbed over 400% before peaking in October.

Since then, EVR has reversed course.

Here’s how the chart is setting up…

Daily Chart of Evercore Inc. (EVR) — Source: TradingView

And here’s how the stock is setting up with my Stealth System…

Surge score: 37/100
% Above 52-wk low: 5%
Sales growth: +9%
Return on Equity: 66%
Triple momentum: yes (short)

EVR now trades below its 200-day moving average, trending lower and cannot rally above the 50-day moving average (red line).

It is now trading against its downtrend line and just below the 50-day.

I like this as a short trade with a buy stop at $117 for protection.

Central Garden & Pet Company (Short Idea)

Central Garden & Pet Company (CENTA) is a mid-cap consumer goods company selling pet food and garden supplies direct to consumer.

In the age of Amazon, this is a questionable business model at best. And based on the technicals, this stock could be on the verge of a major decline.

Here’s how the chart is setting up…

***Daily Chart of Central Garden & Pet Company (CENTA) — Source: TradingView***

And here’s how the stock is setting up with my Stealth System…

Surge score: 67/100
% Above 52-wk low: 7%
Sales growth: +2%
Return on Equity: 14%
Triple momentum: yes (short)

Shares are forming a bearish “wedge” pattern with long-term support near the $40 mark.

But we don’t need to wait for it to break down before shorting the stock.

CENTA is trading right up against its downtrend line and just a dollar below the 200-day moving average. That’s a lot of resistance to push through.

I would consider selling this short in the $42-$43 range with a buy stop at $45.

This comes out to a risk of roughly 5% on a trade that could deliver a big win on the downside.

Adobe Inc. (Short Idea)

Adobe Inc. (ADBE) is one in a long list of past winners that has given back all of its post-pandemic gains.

The stock is down 43% since November and could fall further.

Here’s how the chart is setting up…

***Daily Chart of Adobe Inc. (ADBE) — Source: TradingView***

And here’s how the stock is setting up with my Stealth System…

Surge score: 29/100
% Above 52-wk low: 9%
Sales growth: +9%
Return on Equity: 43%
Triple momentum: yes (short)

The trend is unquestionably bearish for ADBE stock, and shares have been unable to trade above their 50-day moving average for almost six months.

I would consider selling ADBE short in the $410-$425 area for a continuation move lower.

Work a stop at $442 for protection.

Where’s the Alpha?

With the major indexes down double-digits and many of last year’s leading stocks down over 50%, consider checking out my Alpha Stocks trading service.

We have plenty of long ideas for the right stocks, but we’re also not afraid to go short. We short stocks and we also provide option alternatives if that’s more of your style.

And we get together every Monday for an hour-long live session so that subscribers can ask questions and get guidance about our trades.

If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Live Coaching Session

Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.

We’ll send you a login reminder that morning, just so you don’t forget.

We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.

You need to attend this session to get the most from your subscription!

In the meantime, you can watch the replay of our latest Stealth Trades session right here.

Best wishes for your trading,

Ross Givens

Editor, Stealth Trades

P.S. If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Weekly Update: Where We’re Looking for Solid Setups

Ross Givens on February 4, 2022

Although the major indexes made little progress last week, volatility is subsiding.

And we are beginning to see some stocks find traction in their breakouts.

Several names (primarily oil and gas stocks) made healthy moves higher from constructive setups.

For example, Continental Resources, Inc. (CLR), which was on last week’s Watchlist, broke out last Friday on high volume.

Shares were up 8% in the first hour of trading, although they did fade a bit into the afternoon session.

And in last week’s members-only Alpha Stocks class, we reviewed Arch Resources, Inc. (ARCH), which broke out this past Tuesday.

The stock jumped as much as 11.8% in just two days before pulling back.

If these breakouts can hold up and advance further, we may begin to see a healthier environment in which breakouts have a high rate of success.

But I still need to see follow-through before getting aggressive on the long side.

Now, I mentioned last week that most of the names with good technical setups and tight pivot areas are small banks and energy stocks.

Yes, energy stocks carry risks related to the price of oil and natural gas, and banks don’t always make the strongest breakouts.

However, the three new stocks on this week’s Watchlist fall into those two categories, as those are simply where the best potential trades are currently setting up.

And as long as we can keep our stops relatively tight, we should be able to navigate these setups in a profitable way.

Weatherford International plc

First up is Weatherford International plc (WFRD), a $2.3 billion oilfield services company operating out of Houston, Texas.

This company provides the equipment and services that oil exploration and production companies need for their drilling and other operations.

Here’s how the chart is setting up…

***Daily Chart of Weatherford International plc (WFRD) — Source: TC2000***

And here’s how the stock is setting up with my Stealth System:

Surge score: 99/100
% Above 52-wk low: 160%
Sales growth: +17%
Triple momentum: yes

The setup in WFRD is almost identical to last week’s chart of Continental Resources, Inc.

It is forming a textbook cup and handle pattern and showing tremendous strength in an otherwise weak market.

Notice how the relative strength line has turned up and made a new high.

If price tightens up for a few more days, the setup will look even stronger.

SilverBow Resources, Inc.

SilverBow Resources, Inc. (SBOW) is one of those oil exploration and production companies I just alluded to above.

This $400 million company is also based in Houston, and it focuses on acquiring and developing its land assets in the Eagle Ford shale region of South Texas.

Here’s how the chart is setting up…

***Daily Chart of SilverBow Resources, Inc. (SBOW) — Source: TC2000***

And here’s how the stock is setting up with my Stealth System:

Surge score: 99/100
% Above 52-wk low: 331%
Sales growth: +117%
Triple momentum: yes

SBOW is setting up for a “cheat entry” near the middle of its cup formation.

Unfortunately, the low of the shakeout move in January is too far away to use for a stop.

Therefore, I suggest using an arbitrary stop loss of somewhere around 6%-8%.

Look for a move above $25.55 as the entry trigger.

Preferred Bank

Preferred Bank (PFBC) is a $1.2 billion independent commercial bank operating out of Los Angeles, California.

Its operations are primarily focused on providing banking services to small and mid-sized businesses as well as other entrepreneurs, real estate developers and high net worth individuals.

Here’s how the chart is setting up:

***Daily Chart of Preferred Bank (PFBC) — Source: TC2000***

And here’s how the stock is setting up with my Stealth System:

Surge score: 96/100
% Above 52-wk low: 63%
Sales growth: +3%
Triple momentum: yes

I don’t often trade these small local bank stocks, but there is a proliferation of setups across this sector.

When I sort my stock scans by relative strength, the list is almost exclusively energy and bank stocks. So, I’ve decided to give this one a try.

PFBC kept its selloff contained to just 7% while most of the market was melting down last month.

Shares also bounced back quickly to their highs, which is a good sign of strength underlying accumulation.

The setup is pretty straightforward… Buy a new high, and place a stop beneath the swing low.

Live Coaching Session

Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.

We’ll send you a login reminder that morning, just so you don’t forget.

We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.

You need to attend this session to get the most from your subscription!

In the meantime, you can watch the replay of our latest Stealth Trades session right here.

Best wishes for your trading,

Ross Givens

Editor, Stealth Trades