Weekly Update: Setting the Stage for the Next Wave Higher
Editor’s Note: All major U.S. stock markets are closed on Monday, Feb. 21, 2022, in observance of President’s Day.
The market continues to show weakness, with all major indexes down on the week.
Looking at our recent picks from the weekly Stealth Trades Watchlist, the best performers so far have been shorts.
That tells me everything I need to know about the current environment.
With the markets closed on Monday and a potential Russian invasion of Ukraine, I am 100% cash going into the long weekend.
I continue to urge caution and trading small, or not at all, until conditions improve.
Facebook (FB), Netflix (NFLX), Paypal (PYPL), Square (SQ), the ARK Innovation ETF (ARKK) and dozens of other mega-cap names are down 50%-60% or more.
This is not the time to be getting aggressive.
Your time is better spent looking for stocks that are holding up well right now and making or nearing new highs.
These will likely be the new leaders of the next bull market, which could emerge at any time.
As long-time readers know, bear markets always set the stage for the next wave of super-high-performance stocks.
Antero Resources Corporation
Antero Resources Corporation (AR) is a $7 billion oil and gas exploration and production company operating out of the Appalachian Basin and Upper Devonian Shale.
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: 189%
- Sales growth: +83%
- Triple momentum: yes
Fundamentally, Antero is showing accelerating quarterly growth in both sales and earnings.
Shares are also making new highs while the markets are selling off, which is a clear sign of relative strength.
Oil and gas names remain strong, and AR is one of a small handful breaking out from a buyable position.
Zeta Global Holdings Corp.
Zeta Global Holdings Corp. (ZETA) is a $2 billion cloud software company that aims to provide corporate clients with consumer intelligence and marketing automation solutions.
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: 119%
- Sales growth: +21%
- Triple momentum: yes
Zeta is a recent initial public offering (IPO) showing a lot of strength on good volume over the last several weeks.
After a 58% surge in just 13 days, price is consolidating in a tight range.
If ZETA can break out into new high ground, this one is worth the 9% downside risk.
Note that earnings are due on Feb. 23, after the close. I suggest waiting until Thursday morning before considering a buy.
As long as ZETA does not gap up big, this could be a buy in the mid-$12 range.
SMART Global Holdings, Inc.
SMART Global Holdings, Inc. (SGH) is a $1.4 billion semiconductor company that designs and manufactures memory and computing modules for a range of technology applications.
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: 39%
- Sales growth: +61%
- Triple momentum: no
SGH is a less traditional setup designed to get in early on the turn higher.
The stock recently broke its downtrend and is now forming a small base in the $26-$29 range.
It also held its crucial 200-day moving average, which is still sloping upward.
Volume has also dried up in a big way, which could be a sign that selling has subsided.
I’m looking for a break above $29.45, preferably on volume of one million shares or more.
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