Weekly Update: Bulls Take Over as Bears Hibernate

Ross Givens Ross Givens on December 23, 2021

It seems as though the bears got an early start to the holiday season…

For the prior abbreviated trading week, the S&P 500 index gained 2.4% to notch new all-time daily and weekly closing highs.

And if the index can end this week anywhere above 4,606, it will also set a new all-time monthly closing high.

But that doesn’t tell the full story…

You see, the biggest daily and weekly rallies typically occur during bear market rallies.

Furthermore, several big-name stocks have suffered huge losses in recent weeks, which is definitely not characteristic of a healthy bull market.

To name just a few examples…

Snap Inc. (SNAP) is down 41% from its 2021 high.

DraftKings Inc. (DKNG) is down 60% from its 2021 high.

And Peloton Interactive, Inc. (PTON) is down a whopping 77% from its 2021 high!

What Does This Mean for Traders?

First, it means that you shouldn’t only focus on the performance of the major stock indexes.

Instead, watch how individual stocks are performing.

Sure, the S&P is at new highs, but the Russell 2000 small-cap index is still down nearly 9% from its recent high.

And growth stock indexes like the IBD Innovator 50 (FFTY) is 14.5% off its high.

So, next time you take a look at the major indexes…

Remember that they’re dominated by a small handful of mega-cap stocks and aren’t necessarily giving you the full picture of the market.

With that said, however, I’ve recently outlined several bullish pockets of strength within the market.

And I have three more great opportunities to present to you today.

Let’s get right to them…

Lee Enterprises, Inc.

Lee Enterprises, Inc. (LEE) is a small, $232 million publishing company that produces print and digital newspapers and provides advertising and marketing services.

Here’s how the chart is setting up:

Daily Chart of Lee Enterprises, Inc. (LEE) -- Source: TC2000
Daily Chart of Lee Enterprises, Inc. (LEE) — Source: TC2000

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

  • Surge score: 99/100
  • % Above 52-wk low: 235%
  • Sales growth: +1%
  • Triple momentum: yes

LEE stock surged 119% in just 22 days and is now setting up in a high tight flag pattern.

To complete the pattern, shares must not retrace more than 20%. The buy point is new highs above $41.00.

Typically, traders use the low of the retracement zone as where to place a stop loss.

But if price continues to tighten, you could use the swing low of the final retracement.

Moody’s Corporation

Moody’s Corporation (MCO) is a major $74 billion risk assessment firm that publishes credit ratings for companies in the United States and worldwide.

Here’s how the chart is setting up:

Daily Chart of Moody's Corporation (MCO) -- Source: TC2000
Daily Chart of Moody’s Corporation (MCO) — Source: TC2000

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

  • Surge score: 87/100
  • % Above 52-wk low: 52%
  • Sales growth: +13%
  • Triple momentum: yes

Moody’s stock made a big move in the first half of 2021.

Shares have been consolidating to form a base for most of the last six months and now look primed to break out higher.

Retracements have shallowed to a nice and tight 4% range, allowing for a very low-risk entry point.

Price has not been able to get above $400.00 for a few weeks, but I would use $402.00 as a buy point.

That gives a bit of additional confirmation by trading above the highest closing price in November.

Intercontinental Exchange, Inc.

Intercontinental Exchange, Inc. (ICE) is the $76 billion operator of market exchanges, clearing houses and listings venues that some of you have likely heard of or even traded with before.

Here’s how the chart is setting up:

Daily Chart of Intercontinental Exchange, Inc. (ICE) -- Source: TC2000
Daily Chart of Intercontinental Exchange, Inc. (ICE) — Source: TC2000

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

  • Surge score: 88/100
  • % Above 52-wk low: 25%
  • Sales growth: +18%
  • Triple momentum: yes

I added ICE to the Watchlist last week, but shares have not yet broken through our resistance level.

Last week’s market weakness added a small 4% shakeout move, which has only made the setup look better to me.

Additionally, we can now use last week’s low as the stop, which lowers the risk on this trade.

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

Weekly Update: Why Managing Risk is Crucial Right Now

Ross Givens Ross Givens on December 17, 2021

Is this the start of a real market downturn?

Maybe it is… Maybe it’s not. 

As I’ve noted recently, the market has been extremely weak under the surface for months now…

And it’s certainly possible that the indexes and big name technology stocks could finally succumb to that and head lower.

We’re not seeing that happen just yet, as the S&P 500 index is only off of its all-time high by about 2%.

But the fact is that most breakouts are not working right now.

Instead of seeing the follow-through move we would normally expect, breakout stocks are getting sold off before they’re able to gain any real traction.

The stocks are sound, and the setups look good. But it seems to me that institutions are selling into the strength.

Now’s the Time to Manage Risk

I don’t mean for this to sound scary, but I would not be upset to see a 10%-20% correction to “reset” the market.

This would set up a lot of fresh new opportunities and clear the way for another leg up on this bull market.

For now, we’ll continue to abide by our trading rules for the new Watchlist stocks below.

However, you always want to be aware of how much risk you’re taking.

If you feel uncomfortable with this kind of up and down volatility, consider using smaller position sizes or setting tighter stops.

And when markets are shaky, don’t hesitate to take some profits and lock in a gain if you have one.

JB Hunt Transport Services

JB Hunt Transport Services (JBHT) is a $21 billion logistics services company focused on trucks and transporting stuff via those trucks.

And as you know, moving stuff via trucks is a major market in high demand right now.

Here’s how the chart is setting up:

Daily Chart of JB Hunt Transport Services (JBHT) -- Source: TC2000
Daily Chart of JB Hunt Transport Services (JBHT) — Source: TC2000

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

  • Surge score: 91/100
  • % Above 52-wk low: 46%
  • Sales growth: +27%
  • Triple momentum: yes

After a healthy run in the first half of the year, JBHT has taken a breath to consolidate near the $200 level.

A shakeout move down to $185 likely hit some stops, so the stock should be even further consolidated into stronger institutional hands.

Look to buy on a breakout to new high ground.

Republic Services, Inc.

Republic Services, Inc. (RSG) is a $43 billion waste management company focused on serving municipal and residential customers.

The other side of the business processes and sells cardboard containers, newsprint, aluminum, glass and other materials.

Here’s how the chart is setting up:

Daily Chart of Republic Services, Inc. (RSG) -- Source: TC2000
Daily Chart of Republic Services, Inc. (RSG) — Source: TC2000

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

  • Surge score: 93/100
  • % Above 52-wk low: 57%
  • Sales growth: +14%
  • Triple momentum: yes

Sales growth of 14% isn’t huge for most companies. But in the waste management sector, it is fairly substantial.

After a one-day pop higher on big volume at the end of October, RSG has tightened into a low-risk 5% range.

RSG broke out of two similar bases this year, each leading to solid short-term gains.

Intercontinental Exchange, Inc.

Intercontinental Exchange, Inc. (ICE) is the $76 billion operator of market exchanges, clearing houses and listings venues that some of you have likely heard of or even traded with before.

Here’s how the chart is setting up:

Daily Chart of Intercontinental Exchange, Inc. (ICE) -- Source: TC2000
Daily Chart of Intercontinental Exchange, Inc. (ICE) — Source: TC2000

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

  • Surge score: 88/100
  • % Above 52-wk low: 25%
  • Sales growth: +18%
  • Triple momentum: yes

Levi Strauss made a fortune selling pick, shovels and denim to hopeful miners in the gold rush of the 1800s.

He found a way to profit without ever making a bet on whether or not he would find gold.

The same thing goes for exchanges like ICE. Futures contracts on crude, gold, natural gas, electricity and agricultural products all trade on the Intercontinental Exchange. And the company gets its fees whether traders win or lose.

We have an opportunity for an early entry on ICE if the stock can break above Thursday’s highs while only risking about 6% on the trade.

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