bullish 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

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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.

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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: 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.

Graphical user interface, chart

Description automatically generated — ***Daily Chart of Nasdaq Composite with Market Breadth Indicator – Source: TradingView***

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.

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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: Stealth Stocks Lead The Market

Ross Givens on March 4, 2022

I don’t care much for most fundamentals… But one thing I do care about is sentiment.

And rising geopolitical tensions continued to suppress investor appetite for buying stocks again this week.

Technically speaking, while the major indexes are easily holding above the prior week’s lows, the S&P 500, Nasdaq 100 and Russell 2000 are all below their 50- and 200-day moving averages (MAs).

As regular readers know, this is not a bullish sign.

The 50-day MAs for the Nasdaq and Russell have even crossed below their respective 200-day MAs.

The S&P is on course to do the same thing unless it sees a swift reversal.

All that said, and unlike in recent weeks, I am starting to see more constructive setups, particularly in the energy sector.

I have two of those Watchlist plays for you today, along with another in one of the world’s leading semiconductor companies that looks to be setting up for another long-term bullish move…

Micron Technology, Inc.

Micron Technology, Inc. (MU) is the $93 billion semiconductor manufacturer that makes memory and other storage devices for a wide range of applications.

The shares were on the decline for most of last year but have recovered and started to push the prior highs again.

Here’s how the chart is setting up…

***Weekly Chart of Micron Technology, Inc. (MU) — Source: TC2000***

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

Surge score: 87/100
% Above 52-wk low: 38%
Sales growth: +33%
Triple momentum: yes

This is a longer-term setup that could deliver longer-term gains in the form of a larger, multi-month move.

The chart above is using weekly bars to show more historical data.

MU began forming a “cup and handle” base pattern in January 2021 that is now working to complete itself.

If the stock breaks out to new high ground, consider buying MU shares with a stop at the 50-day simple moving average, currently near the $90 mark.

Cenovus Energy Inc.

Cenovus Energy Inc. (CVE) is a $31 billion oil and gas producer based out of Calgary, Canada.

The shares have been on the ascent since the start of the year and look primed for a possible breakout.

Here’s how the chart is setting up…

***Daily Chart of Cenovus Energy Inc. (CVE) — Source: TC2000***

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

Surge score: 87/100
% Above 52-wk low: 116%
Sales growth: +287%
Triple momentum: yes

With crude prices topping $115 per barrel, it is no surprise that a lot of energy names are still showing up as the top performers on my scans.

CVE is compressing nicely from left to right in a verified Stage 2 uptrend.

Look for a strong move through the $16 area to buy.

Then, place a sell stop beneath the swing low at $14.60 for protection.

Northern Oil and Gas, Inc.

Northern Oil and Gas, Inc. (NOG) is another oil and gas producer with a much smaller market cap of just around $2.1 billion.

Shares have been rising strongly since November 2020 but are just getting back to the highs of last year.

Here’s how the chart is setting up…

***Weekly Chart of Northern Oil and Gas, Inc. (NOG) — Source: TradingView***

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

Surge score: 98/100
% Above 52-wk low: 126%
Sales growth: +537%
Triple momentum: no

I’ve chosen to show the weekly chart for NOG above as well.

The stock is completing a five-month base pattern and trying to breakout to the upside.

Shares broke out last week before pulling back slightly.

At the time of this writing, NOG is trading at $26.50 – right near the breakout point.

As long as price does not get extended by Monday morning, I think this can be bought here with a stop at $23.30.

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