Weekly Update: Shortened Week of Trading
Good evening, and welcome to this week’s edition of Stealth Trades!
I apologize for not getting this update out on Friday afternoon as usual, I was away from my office last week working with my team in Orlando.
The stock market is closed today in celebration of Presidents Day, so this will be a shortened week of trading.
Let’s look at where things stand…
While markets have pulled back slightly over the last 2 weeks, we have not lost any significant ground in the uptrend.
The S&P 500 held at its 21-day moving average Friday on above-average volume.
The real test will be whether we can avoid any major distribution in February. We want to see the SPY hold above the 400 level with not big down days on significant selling volume.
As long as that doesn’t happen, bulls are in charge, the bull market is intact, and this has been nothing more than typical digestion after a strong move up.
I continue to focus on the highest relative strength names to gauge market health.
Here are a few on my radar:
Agilysys (AGYS)
Agilysys is a hospitality software company that checks all the boxes.
Steady earnings and sales growth, high relative strength, a small float, strong fundamental ratings, and a clean chart.
The stock has been forming a base since mid-December when it climbed 35% on news of its software deal with Marriott.
Pullbacks have tightened and the stock has short-term resistance near the $85 mark.
A push through this level could ignite the next leg higher for AGYS.
CECO Environmental Corp (CECO)
CECO is a somewhat off-the-radar stock.
With a market capitalization of just $500 million, this small-cap environmental company is not as heavily watched as many others.
The stock formed a pretty textbook consolidation base between November in January before making a powerful move higher at the beginning of the year.
CECO is now tightening up again and holding above its 21-day EMA.
I’ll be watching for a breakout to new highs accompanied by another surge in volume.
Qualtrics International (XM)
XM made a huge move last month when the company reported sales and earnings numbers far in excess of analyst expectations.
I’ve used a weekly chart to give a big picture view.
Shares have pulled back only slightly and are now sitting on a significant support level at their 10-day moving average.
One might consider a buy here with a 6% stop loss near $15.00 – just beneath the stock’s 21-day moving average.
If the surge is to continue, this level should hold.
Best wishes for your trading,
Ross Givens
Editor, Stealth Trades