Weekly Update: Bull Storm Into 2022 at Record Highs

Ross Givens Ross Givens on December 31, 2021

US markets ended the year on a high note, to be sure.

The benchmark S&P 500 index broke above the 4,800 level this week for the first time ever.

It’s now approaching a 30% gain for the year.

And it’s a similar figure for the Nasdaq 100.

But zooming out to a wider range of smaller stocks, the Russell 2000 index is up only about half that amount for the year at 16.5%.

That’s still a respectable gain, and it’s been a great trading range over the past year with a lot of opportunities.

But it points back to what I’ve been telling you lately…

The performance of large-cap and mega-cap stocks is masking a stealth correction throughout much of the market.

Yes, there will be plenty of great trading opportunities in 2022… And I’ll be here alerting you to many of them.

But I continue to recommend cautious trading because I don’t want you to get complacent as we head into the new year.

With that in mind, let’s get right to this week’s Watchlist stocks…

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.

After surging 119% in 22 days, I put LEE on the Watchlist last week.

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

It also met the criteria for a “high tight flag.”

Since then, the stock has stayed within its retracement zone, so I’m going to keep it on our list to see if it can break out higher.

Ideally, we want the stock to stay in the “flag” portion for two to three weeks or more.

This way we can make sure the profit-taking has been absorbed.

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.

Alphabet Inc.

Alphabet Inc. (GOOGL) is the 1.9 trillion parent holding company for technology platforms Google, Android, YouTube and many other leading tech brands.

The fact that a nearly $2 trillion company is still growing sales by 41% per quarter is mind-blowing.

Here’s how the chart is setting up:

Daily Chart of Alphabet Inc. (GOOGL) -- Source: TC2000
Daily Chart of Alphabet Inc. (GOOGL) — Source: TC2000

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

  • Surge score: 92/100
  • % Above 52-wk low: 70%
  • Sales growth: +41%
  • Triple momentum: yes

The company grew profits by 99%, 189% and 82% in the last three quarters, respectively, showing there may be no limit to how big Google can become. 

Shares have been consolidating for the last few months, and we now have a tight pivot range where we can buy to risk just 6% on the trade.

Driven Brands Holdings Inc.

Driven Brands Holdings Inc. (DRVN) is a $5.6 billion automotive services provider for retail and commercial customers.

It does paint and body work, repairs, oil changes and other general services, and it is also a distributor of various aftermarket auto parts.

Here’s how the chart is setting up:

Daily Chart of Driven Brands (DRVN) -- Source: TC2000
Daily Chart of Driven Brands (DRVN) — Source: TC2000

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

  • Surge score: 87/100
  • % Above 52-wk low: 49%
  • Sales growth: +39%
  • Triple momentum: yes

As a stock, DRVN is a recent initial public offering (IPO) trying to complete its first base as a public company.

The stock tried to break out earlier this month, but it appears to be finding sellers near the $34 area where the stock peaked back in January.

If we can get through that area into new high ground, there is a good chance the stock will run higher.

Last week’s low needs to hold in order for this to remain a low-risk trade, however.

If the stock breaks down, I will wait for a new entry point.

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: 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