Tag: Market

The bears are always worried about something it seems…

First, it was inflation and rising interest rates.

Then, it was earnings season.

And to end the Thanksgiving holiday week, there was a new boogie man on Wall Street…

A new variant of the coronavirus spooked traders who sent the S&P 500 index down 2.3% on Black Friday.

While there were some intermittent bounces last week, the index ended lower again by another 1.9%.

We’re also seeing this fear show up in the S&P 500 Volatility Index (VIX), which has spiked over 70% in just two weeks.

The VIX is now at its highest level since March 2021, which sounds bad.

But here’s the thing… The S&P 500 is only off of its recent all-time high by about 5%.

If you zoom out on the charts, this drop is barely noticeable, and the longer-term trend for the broad market is still very much intact.

I am currently taking a more short-term, cautious approach to my trading right now, which I think is a prudent move while uncertainty is elevated.

However, that doesn’t mean there aren’t opportunities for the bulls, and I have five new ones to share with you today.

Permian Basin Royalty Trust

The Permian Basin Royalty Trust (PBT) is a small-cap ($415 million) oil trust that receives ongoing royalty interests from oil- and gas-producing properties in Texas.

Here’s how the chart is setting up:

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

• Surge score: 99/100
• % Above 52-wk low: 196%
• MFI reading: 82
• Sales growth: +146%
• Triple momentum: yes

After a textbook breakout in late September, shares jumped 63% in just three weeks on heavy volume.

Price action then tightened up again near the $9 level and began another leg higher.

But market weakness surrounding a new COVID variant and falling energy prices has given investors the chance to buy PBT on a pullback at the initial breakout level.

Those looking for additional confirmation may choose to wait until shares break above $9.25.

CorVel Corporation

CorVel Corporation (CRVL) is a financial services company that provides workers’ compensation, auto, liability and health solutions for corporate clients and government agencies.

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: 106%
• MFI reading: 62
• Sales growth: +16%
• Triple momentum: yes

CorVel isn’t a “hot stock” by most metrics, but shares have quietly doubled in 2021.

I’m not surprised. With a small float of only 8.9 million shares, it doesn’t take too much demand to send the stock price higher.

CRVL has been consolidating for the last nine weeks, and last week’s market selloff likely shook out some weak-handed holders.

If the stock breaks above $200 on increased volume, we could easily see another quick leg higher.

Ford Motor Company

Ford Motor Company (F), the $76 billion American auto manufacturer, has been an absolute monster this year – currently up 129% year-to-date.

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: 130%
• MFI reading: 55
• Sales growth: -5%
• Triple momentum: yes

While most of the legacy automakers have failed to keep pace with electric vehicle (EV) manufacturers, Ford’s focus on a next-generation electric fleet has investors excited.

F has tightened up over the last five weeks and held its ground well despite overall market weakness.

It trades in a narrow 8% range, giving traders the chance for a low-risk entry point at new highs.

For safety, I would sell if it trades below $19.00.

Toll Brothers, Inc.

Toll Brothers, Inc. (TOL) is the $8 billion home builder, which should continue to benefit greatly from the current housing boom in the United States.

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: 64.1%
• MFI reading: 60
• Sales growth: +24%
• Triple momentum: yes

Toll Brothers is coming out of a beautiful seven-month-long base.

Pullbacks compressed from 24% down to a risk-friendly 6%.

Shares broke out on Thursday, then immediately squatted back to the $67 area on Friday morning to give traders a second chance at this entry.

I suggest buying here with a stop below the swing low at $63.10.

Century Communities, Inc.

Century Communities, Inc. (CCS) is another, smaller homebuilder with a very similar technical setup to Toll Brothers.

Here’s how the chart is setting up:

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

• Surge score: 91/100
• % Above 52-wk low: 88.6%
• MFI reading: 65
• Sales growth: +21%
• Triple momentum: yes

We have a classic compression pattern with decreasing volatility, shallower pullbacks and periods of below-average volume.

Earnings are up big this year, and analysts are expecting another 10% increase in 2022, which I expect will be even higher.

Shares of CCS also broke out on Thursday, but if you can get it for less than $77, you can work a stop at $69.35 and still risk less than 10% 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 log in 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