Weekly Update: Keep an Eye on These Stealth Stocks
While today’s session ended relatively flat, this week was another one for the record books.
The S&P 500 ended the week higher by 1.3% and set a new all-time high of 4,608.08, while the Nasdaq 100 jumped 3.2% to set its own all-time high of 15,504.12.
That’s largely thanks to the strong earnings reports we saw from tech giants Alphabet Inc. (GOOGL) and Microsoft Corp. (MSFT), which are some of the highest-weighted stocks in the Nasdaq.
Mixed Results
Investors were also expecting strong results from Apple Inc. (AAPL) and Amazon.com, Inc. (AMZN), but both stocks ended up showing underwhelming numbers that sent their stocks lower today.
AMZN posted earnings per share of $6.12 versus the expected reading of $8.92, while revenue of $110.81 billion fell short of the expected $111.60 billion reading.
The company also provided guidance for the fourth quarter that was below estimates as it cited rising costs from labor shortages, higher employee and shipping costs and, of course, global supply chain constraints.
AAPL also cited supply constraints and chip shortages during the third quarter as well as COVID-related manufacturing disruptions.
The company managed to meet expectations on earnings per share, but the revenue figure of $83.36 billion also fell short of the expected reading of $84.85 billion.
So, it was a mixed bag for the mega-cap tech stocks this week. While we don’t focus on stocks of that size here in Stealth Trades, it’s still important to keep an eye on the world’s largest companies given the weight they carry in the major indexes.
As far as the Russell 2000 small-caps go, the index is still stuck in the large sideways channel that started to form back in February. But that doesn’t mean there aren’t opportunities among small companies.
In fact, I have three great new small-caps that have just been added to my Watchlist, so let’s get into them now…
Oramed Pharmaceuticals Inc.
Oramed Pharmaceuticals Inc. (ORMP) is a pharmaceutical company focused on the development of oral drug delivery systems – most notably, insulin capsules for the treatment of type 2 diabetes.
This is an exciting development for the medical community and anyone required to inject themselves with insulin.
On Friday, the company announced that its majority-owned subsidiary, Oravax Medical, received clearance to begin Phase 1 clinical trials of its oral COVID-19 vaccine in South Africa.
Needless to say, there is plenty of news to keep interest alive and demand high for shares of ORMP.
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: 850%
- MFI reading: 58
- Sales growth: +0%
- Triple momentum: yes
As a clinical-stage firm, there are no sales or earnings to analyze. But institutional investors appear to be getting interested.
At the end of last year, only 12 funds owned the stock. Last quarter, that number had jumped to 92.
I’m looking to buy ORMP on a move above $23.98. Depending on one’s risk tolerance, you could place a tight stop at $22.70 or give it room and use $21.30.
Revolve Group, Inc.
Revolve Group, Inc. (RVLV) is a Cerritos, California-based online fashion retailer that aims to connect consumers and global fashion influencers.
The company’s platform carries trendy luxury brand apparel, shoes and accessories and works with social media influencers to build and promote those brands.
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: 296%
- MFI reading: 48
- Sales growth: +60%
- Triple momentum: yes
You may remember this stock from the Oct. 18 Watchlist. Those who followed the trade should be up a little over 4%.
But we haven’t yet seen the large surge that I am still expecting.
In fact, price contracted even further over the last two weeks and set up what I believe is an even better entry.
I have a buy stop order set at $75.15. That is my entry trigger.
Once filled, I will work a sell stop at $69.40.
Century Casinos, Inc.
Century Casinos, Inc. (CNTY), as the name implies, is a worldwide casino entertainment company.
In addition to traditional casinos, the company also develops and operates lodging, restaurant, horse racing and other entertainment facilities like bars, showrooms, event venues and even comedy clubs.
Here’s how the chart is setting up:
And here’s how the stock is setting up with my Stealth System:
- Surge score: 96/100
- % Above 52-wk low: 216%
- MFI reading: 57
- Sales growth: +155%
- Triple momentum: yes
After climbing more than 14-fold off its COVID-induced lows, CNTY began to consolidate in June. It has formed a robust base with corrections shrinking from 32% down to 6%.
The company has beaten earnings expectations by a wide margin in each of the last five quarters.
It is scheduled to report again on Nov. 5, before the market opens, and I wouldn’t be surprised to see another blowout number.
I will be looking to buy on new highs with a stop below the swing low.
Pure Storage, Inc.
Pure Storage, Inc. (PSTG) is a data storage and management company. It offers proprietary software platforms and enterprise-class storage services, such as data reduction, encryption and protection as well as storage, data protection and security and recovery/backup services for cloud-based applications.
As more and more companies migrate to cloud-based systems, this company should benefit.
Here’s how the chart is setting up:
And here’s how the stock is setting up with my Stealth System:
- Surge score: 88/100
- % Above 52-wk low: 67.1%
- MFI reading: 65
- Sales growth: +23%
- Triple momentum: yes
In late August, PSTG made a big move higher on better-than-expected earnings numbers. More importantly, it has held that gain.
Shares continued to drift higher through September, and the only profit-taking was a small 10% retracement.
Volume has dropped significantly, and price action has gotten very tight – both good signs for a potential breakout.
The stock is now approaching its highs. I will consider buying a move above $27.50 with a stop at $25.35.
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
Stealth Trades