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Weekly Update: Ready to Sell the Snap-Back Rally

Ross Givens on May 20, 2022

Surprise, surprise… Another down week for stocks.

As I pointed out last week, the trend is unquestionably bearish.

The markets continue to see sellers in control with high volume on the downside.

As I write this update, the S&P 500 is trading within 2% of its 52-week low…

Not a good sign for bulls.

Retail Gets Rocked

Retail was hit hardest this week, which was certainly a contributing factor to the overall selloff.

Disappointing numbers from Walmart (WMT) and Target (TGT) triggered a selloff in consumer staple stocks, which is typically a sector that investors look to for safety.

In just three days, Target stock fell 30%, and Walmart was down almost 20%. Even Procter & Gamble (PG) was down double digits.

Higher prices at the grocery store are translating to lower sales and profits.

And what’s happening is that Wall Street is learning that the retail consumer, the biggest overall contributor to gross domestic product (GDP), is not as healthy as we thought.

Sell the Snap-Back

I remain bearish on the overall market and will again focus on short trades next week.

But it is important to remember that we could see a “snap-back rally” at any time.

If that happens, I will use it as a chance to sell the bounce and get short the worst-performing stocks as they approach their 50-day moving averages.

Historically, some of the biggest rallies occur during bear markets.

***Daily Chart of Nasdaq 100 Index — Source: TradingView***

Back in March, for example, the Nasdaq 100 jumped 17% in just two weeks.

But the selling soon resumed.

So, be cautious and don’t get sucked into buying until we have real confirmation that the bear has been killed.

I’ll let you know when the time comes. For now, here’s our latest list of short candidates…

SPX Corporation (Short Idea)

SPX Corporation (SPXC) is a $2.2 billion infrastructure equipment company for the heating and air industry.

Here’s how the chart is setting up…

TradingView Chart — ***Daily Chart of SPX Corporation (SPXC) — Source: TradingView***

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

Surge score: 38/100
% Above 52-wk low: 13%
Sales growth: +7%
Return on Equity: 12%
Triple momentum: yes (short)

SPXC has been falling all year. The stock has stair-stepped its way down in a series of lower lows and lower highs.

Resistance can be found at the red 50-day moving average where I have highlighted sell zones on the chart above.

Consider shorting SPXC here with a stop above the $50 level.

Alarm.com Holdings, Inc. (Short Idea)

Alarm.com Holdings, Inc. (ALRM) is a $3.1 billion technology company that makes smart devices and systems for residential and commercial properties.

Here’s how the chart is setting up…

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

Surge score: 38/100
% Above 52-wk low: 12%
Sales growth: +19%
Return on Equity: 19%
Triple momentum: yes (short)

You’ll notice the chart for ALRM looks almost identical to SPXC…

Both are following the same pattern of lower lows and lower highs and finding resistance at the 50-day.

I suggest using last week’s rally as an opportunity to sell ALRM short with a buy stop around the $65 mark.

If the trade works properly, the stock should make new lows in a week or two, which is where I would begin taking profits.

Advanced Micro Devices, Inc. (Short Idea)

Advanced Micro Devices, Inc. (AMD) is the $153 billion semiconductor company best known for its computing and graphics processors.

Here’s how the chart is setting up…

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

Surge score: 59/100
% Above 52-wk low: 16%
Sales growth: +71%
Return on Equity: 52%
Triple momentum: yes (short)

The fundamentals for AMD actually look good. But as always, the market knows best…

And the market has been selling AMD en masse for the last six months.

This week, the stock tested its 50-day moving average (red line) without success.

The stock appears to be rolling over, giving investors a low-risk opportunity to play the short side.

Consider selling AMD short here with a stop above this week’s high at $104.25.

Where’s the Alpha?

With the major indexes down double-digits and many of last year’s leading stocks down over 50%, consider checking out my Alpha Stocks trading service.

We have plenty of long ideas for the right stocks, but we’re also not afraid to go short. We short stocks and we also provide option alternatives if that’s more of your style.

And we get together every Monday for an hour-long live session so that subscribers can ask questions and get guidance about our trades.

If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

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. If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Weekly Update: Preparing to Short the Oversold Bounce

Ross Givens on May 13, 2022

Stocks saw more selling this week with each of the major indexes making new 52-week lows.

As I pointed out in last week’s update, this was largely expected.

Institutions were clearly reducing exposure, as evidenced by the increase in volume on the acceleration down.

***Nasdaq Composite Index — Source: MarketSmith, Inc.***

Given the violence of the recent selloff, I believe we are due for an oversold bounce.

In other words, stocks could make a short-term rally before continuing the move lower.

Just as stocks do not go straight up, they do not go straight down either.

They tend to stair-step their way lower with short, weak rallies in between periods of heavy selling.

I remain bearish on the market until we see meaningful signs of recovery.

At a minimum, this would mean waiting for a follow-through day and preferably several days of meaningful buying and new stocks setting up in breakout formations.

Finding good targets to sell short can be difficult when they are falling rapidly.

If you are a regular attendee of my weekly Stealth Trades or Alpha Stocks live weekly sessions, you know I prefer to sell short off a bounce and against some level of resistance.

We did so in Alpha Stocks two weeks ago and made over 600% buying put options on Pegasystems Inc. (PEGA) before the stock fell more than 40%.

My trade ideas this week will again focus on short opportunities.

Each of these names are in clear downtrends, and I will be pointing out low-risk areas where I would be interested in selling them short.

Evercore Inc. (Short Idea)

Evercore Inc. (EVR) was a market leader following the pandemic selloff of 2020. Shares climbed over 400% before peaking in October.

Since then, EVR has reversed course.

Here’s how the chart is setting up…

Daily Chart of Evercore Inc. (EVR) — Source: TradingView

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

Surge score: 37/100
% Above 52-wk low: 5%
Sales growth: +9%
Return on Equity: 66%
Triple momentum: yes (short)

EVR now trades below its 200-day moving average, trending lower and cannot rally above the 50-day moving average (red line).

It is now trading against its downtrend line and just below the 50-day.

I like this as a short trade with a buy stop at $117 for protection.

Central Garden & Pet Company (Short Idea)

Central Garden & Pet Company (CENTA) is a mid-cap consumer goods company selling pet food and garden supplies direct to consumer.

In the age of Amazon, this is a questionable business model at best. And based on the technicals, this stock could be on the verge of a major decline.

Here’s how the chart is setting up…

***Daily Chart of Central Garden & Pet Company (CENTA) — Source: TradingView***

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

Surge score: 67/100
% Above 52-wk low: 7%
Sales growth: +2%
Return on Equity: 14%
Triple momentum: yes (short)

Shares are forming a bearish “wedge” pattern with long-term support near the $40 mark.

But we don’t need to wait for it to break down before shorting the stock.

CENTA is trading right up against its downtrend line and just a dollar below the 200-day moving average. That’s a lot of resistance to push through.

I would consider selling this short in the $42-$43 range with a buy stop at $45.

This comes out to a risk of roughly 5% on a trade that could deliver a big win on the downside.

Adobe Inc. (Short Idea)

Adobe Inc. (ADBE) is one in a long list of past winners that has given back all of its post-pandemic gains.

The stock is down 43% since November and could fall further.

Here’s how the chart is setting up…

***Daily Chart of Adobe Inc. (ADBE) — Source: TradingView***

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

Surge score: 29/100
% Above 52-wk low: 9%
Sales growth: +9%
Return on Equity: 43%
Triple momentum: yes (short)

The trend is unquestionably bearish for ADBE stock, and shares have been unable to trade above their 50-day moving average for almost six months.

I would consider selling ADBE short in the $410-$425 area for a continuation move lower.

Work a stop at $442 for protection.

Where’s the Alpha?

With the major indexes down double-digits and many of last year’s leading stocks down over 50%, consider checking out my Alpha Stocks trading service.

We have plenty of long ideas for the right stocks, but we’re also not afraid to go short. We short stocks and we also provide option alternatives if that’s more of your style.

And we get together every Monday for an hour-long live session so that subscribers can ask questions and get guidance about our trades.

If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

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. If you’re ready to see what you could be missing out on, click here to learn more about Alpha Stocks now!

Weekly Update: Revising the Meaning of “Don’t Fight the Fed”

Ross Givens on April 29, 2022

Many of you have likely heard the old Wall Street adage, “Don’t fight the Fed.”

Usually, this phrase is uttered by bullish investors warning their bearish counterparts not to short a rising market being fueled by easy monetary policy.

But at this point, with the Federal Reserve seemingly set to defeat rising inflation by any means necessary, it’s taking on a different meaning.

New Meaning

For me, fighting the Fed right now would mean trying to buy stocks in the face of tightening monetary policy.

Instead of taking on that risk, I am starting to look for more ways to go with the market flow.

After all, the Nasdaq made a new year-to-date low this week, indicating that this bear market is not over yet.

Therefore, on today’s Watchlist, I’m including just one bullish idea and two bearish ideas.

Both technically and from a fundamental perspective, I think we’ll have more success trading with the Fed rather than against it.

With that in mind, let’s get right to our newest ideas…

Jackson Financial Inc.

Jackson Financial Inc. (JXN) is a $3.7 billion financial planning firm showing huge growth in both sales and earnings.

Here’s how the chart is setting up…

***Daily Chart of Jackson Financial Inc. (JXN) — Source: TradingView***

Here’s how the stock is setting up with my Stealth System…

Surge score: 97/100
% Above 52-wk low: 98%
Sales growth: +170%
Return on Equity: 32%
Triple momentum: yes

Growth stocks have been hammered over the last six months, but JXN has held up better than most.

It is also a recent initial public offering (IPO), so this would be the first base breakout for the stock.

The stock has compressed nicely with pullbacks shallowing from 25% to just 8%.

I am looking to buy the stock on a break above $44.10 with a stop beneath the swing low at $42.05.

MaxLinear, Inc. (Short Idea)

MaxLinear, Inc. (MXL) is a $3.9 billion semiconductor company focused on communications chips.

Here’s how the chart is setting up…

***Daily Chart of MaxLinear, Inc. (MXL) — Source: TradingView***

Here’s how the stock is setting up with my Stealth System…

Surge score: 77/100
% Above 52-wk low: 59%
Sales growth: +26%
Return on Equity: 49%
Triple momentum: yes (short)

This stock was a big winner in 2020 and 2021, climbing over 800% in less than two years.

But the bullish run appears to be over.

Shares have rolled over hard, making a decisive break of the 200-day moving average and plummeting to new lows.

The stock popped up on earnings last week, but I would use this as an opportunity to sell the stock short.

Try to sell near the $50 level and use the 200-day moving average as your stop loss.

RH (Short Idea)

RH (RH), also known as Restoration Hardware, is an $8.5 billion luxury home furnishings retailer.

Here’s how the chart is setting up…

***Daily Chart of RH (RH) — Source: TradingView***

Here’s how the stock is setting up with my Stealth System…

Surge score: 18/100
% Above 52-wk low: 8%
Sales growth: +11%
Return on Equity: 95%
Triple momentum: yes (short)

Restoration Hardware is getting destroyed.

It’s down more than 50% over the last six months, with no sign of coming back to life.

So far, RH has found support at the $320 level.

But it has been tested four times so far, and I don’t expect it to survive a fifth test.

If the stock makes new lows, this would be a good short opportunity.

I would use the 50-day moving average as my initial stop and then bring it down as the trade moves lower.

Join the Insiders

Now, if you’ve ever wondered how I developed a proven track record of trading along the insiders like corporate CEOs, CFOs, executives and board members…

Do yourself a favor and check out my latest Insider Effect presentation!

Corporate insiders are always buying or selling shares in the companies they operate. These folks have a footing of knowledge that Main Street investors simply do not.

I talked more about this in my latest presentation, which you can watch at your convenience right here.

I covered my strategy for trading alongside corporate insiders and generating potentially massive gains as a result.

Just click here to learn more about my Insider Effect strategy and see what you could be missing out on.

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: Where the Rubber Meets the Road

Ross Givens on April 15, 2022

The major indexes remain under pressure.

While last week I told you that there was some improvement in the technical picture, with the S&P 500 above its 50- and 200-day moving averages, it is now back below them again.

The Nasdaq 100 and Russell 2000 are below their respective moving averages as well.

We are now at the point where the rubber meets the road.

Either the heavy buying we saw off of the recent lows will return, confirming stocks are back in a bull market…

Or this was simply a prolonged bear market bounce and the markets revisit those lows, which is very possible.

What’s Working

Several of our Stealth Trades positions are working well.

This includes the most recent official alert for Alpha Metallurgical Resources, Inc. (AMR) that went up 7% the first day and is now higher by nearly 12% since the breakout.

Five of our six open Alpha Stocks trades are also showing profits.

Still, inflation continues to reveal itself as worse than expected, which is worrisome since it increases the likelihood that the Federal Reserve will raise rates more aggressively.

As regular readers know, higher interest rates are bad for stocks and vice versa.

The second half of April will tell us if the market has already priced in the inflation and rate-hike issue or if things are going to get worse for stocks before they get better.

In the meantime, we’re sticking with our usual strategy of finding fundamentally strong stocks pushing up against clearly defined pivot levels…

First Majestic Silver Corp.

First Majestic Silver Corp. (AG) is a $3.7 billion Canadian mining company primarily focused on silver and gold production.

Here’s how the chart is setting up…

***Daily Chart of First Majestic Silver Corp. (AG) — Source: TradingView***

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

Surge score: 88/100
% Above 52-wk low: 52%
Sales growth: -27%
Return on Equity: N/A
Triple momentum: yes

From a fundamental perspective, analysts are forecasting record earnings for First Majestic in 2022 and another 97% increase in 2023.

Technically speaking, AG stock has basically gone nowhere for the last two years.

However, it is now setting up in a classic “cup with handle” pattern.

Price action has tightened nicely and formed a pivot area at $14.50.

Consider buying if that price is hit and use $13.40 as a stop.

Xenon Pharmaceuticals Inc.

Xenon Pharmaceuticals Inc. (XENE) is a $1.8 billion biotechnology company focused on treating neurological disorders.

I added this stock to the Watchlist last week. It has not yet triggered, but the setup still looks good.

Here’s how the chart is setting up…

***Daily Chart of Xenon Pharmaceuticals Inc. (XENE) — Source: TradingView***

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

Surge score: 96/100
% Above 52-wk low: 129%
Sales growth: -27%
Return on Equity: N/A
Triple momentum: yes

Xenon is a clinical-stage biotech stock, so fundamentals like sales and earnings aren’t much help in evaluating the trade.

However, the technical picture still looks great.

After a big jump in October on positive Phase 2 trial results for its epilepsy drug, shares have consolidated in a tightening pattern from left to right.

Consider buying if the stock can make new highs on good volume.

Fluor Corporation

Fluor Corporation (FLR) is a $4.2 billion construction and maintenance services company focused on the oil and gas, chemical and mining industries.

And all of these industries are booming right now.

Here’s how the chart is setting up…

***Daily Chart of Fluor Corporation (FLR) — Source: TradingView***

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

Surge score: 97/100
% Above 52-wk low: 109%
Sales growth: -3%
Return on Equity: 12%
Triple momentum: yes

High oil prices generally lead to increased drilling, and Flour stands to benefit from that.

Analysts appear to agree with consensus estimates calling for 35% earnings growth in each of the next two years.

From a technical perspective, the volume footprint shows signs of institutional accumulation.

Heavy buying for a week straight in early March propelled the stock higher, and it has now consolidated with minimal pullbacks.

I think you can buy FLR here at $30.00 and work a stop at $28.00 for protection.

Join the Insiders

Now, if you’ve ever wondered how I developed a proven track record of trading along the insiders like corporate CEOs, CFOs, executives and board members…

Do yourself a favor and check out my latest Insider Effect presentation!

Corporate insiders are always buying or selling shares in the companies they operate. These folks have a footing of knowledge that Main Street investors simply do not.

I talked more about this in my latest presentation, which you can watch at your convenience right here.

I covered my strategy for trading alongside corporate insiders and generating potentially massive gains as a result.

Just click here to learn more about my Insider Effect strategy and see what you could be missing out on.

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: The Market Demands Stealth Trades for More Gains

Ross Givens on February 25, 2022

The stock market continues to be a tough place to just place broad bets and hope for positive results.

The leading stock indexes are all down heavily so far this year led by the Nasdaq Composite Index and followed by both the S&P 500 Index and even the classic Dow Jones Industrial Average.

This means that index trading isn’t doing anything so far but losing you money – unless you might be short.

Instead, here at Stealth Trades, I’m all about digging out the right stocks that might not be well-known – but they are in the right industries and sectors with revenue gains, prices trading above their moving averages and of course great surge scores among my other factors that I use to find the best stocks for you to trade.

This week’s new Stealth Trades Watchlist of stocks includes three companies that are leaders in the major industries that continue to be highly in demand in the US market and around the globe.

Energy, shipping and agricultural products – these are what are all in demand resulting in more sales, more earnings and most importantly, more trading with buyers seeking the best in these sectors.

Here are my best Stealth Trades for this week…

SandRidge Energy (SD)

***SandRidge Energy Inc. Price & Technical Analysis – Source TradingView***

• Surge score: 99/100

• % Above 52-wk low: 246%

• Sales growth: +68%

• Triple momentum: yes

Energy continues to be the strongest sector in the market, and Russia’s invasion of the Ukraine is only making it stronger.

SD is compressing nicely into an early entry point on a breakout above 12.90.

Navios Maritime Partners (NMM)

***Navios Maritime Partners Price & Technical Analysis – Source TradingView***

• Surge score: 96/100

• % Above 52-wk low: 55%

• Sales growth: +287%

• Triple momentum: no

Navios Maritime is a dry bulk transport stock that is bucking the trend of the overall market. While the major indexes are down big over the last several weeks, NMM is up 40% over the last month.

A break above 33.00 could be a nice entry point to buy for another leg higher.

Andersons (ANDE)

***The Andersons Inc. Price & Technical Analysis – Source TradingView***

• Surge score: 97/100

• % Above 52-wk low: 72%

• Sales growth: +51%

• Triple momentum: no

The Andersons Inc. is a leading agricultural company focused on grain storage operations as well as fertilizer and other farm products. It is a textbook breakout pattern that fired up last week. The stock is surging higher on above-average volume under the worst possible market conditions.

The stock price is extended at the moment. But if we get a pullback near the $41 mark, this is definitely worth a buy. A clean breakout on consecutive days of above-average buying volume is exactly what we like to see in a healthy move.

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