Weekly Update: The Rally Continues
Good evening, and welcome to this week’s edition of Stealth Trades!
The rally continues!
After a few days of consolidation to start the week, stocks surged higher on Friday to finish at the highest levels since September.
The only thing better than seeing the market rally is watching the bears lose money as their pessimism proves unfounded.
Investors must learn to detach the economy from the stock market. They are not the same. In fact, the stock market leads the economy – not the other way around.
Those who wait until things are all sunshine and roses will miss out on the lion’s share of market gains. As the famed technical analyst Walter Deemer used to say, “When it’s time to buy… you won’t want to.”
Yes, rates are high. Yes, debt is out of control. Yes, there are two wars in the Middle East and above-average inflation. But guess what?
That is when markets bottom… when things are at their worst and slowly begin to improve.
Our market health model remains bullish:
The sectors showing the most strength over the last two quarters are nuclear and software, although nuclear is beginning to weaken a bit.
On the software side, I’m seeing a lot of former market leaders set up in what could be great buying opportunities.
Palantir (PLTR), for example, looks fantastic here. We bought the stock on Friday morning in my Alpha Stocks service.
Palantir is an artificial intelligence company that made huge strides the first half of the year. It has been consolidating for the last few months but is now breaking through its post-earnings pivot and marching toward new all-time highs.
Another stock I like here is Datadog (DDOG)…
Shares trended lower from August to November, falling 30% from peak to trough.
But a strong earnings report put DDOG back in the game. And if shares get above the post-earnings high of 104.50, that could trigger the next leg higher.
On the energy side, I prefer nuclear and those stocks with exposure to natural gas. Two of my favorites right now are Cameco (CCJ) and TechnipFMC (FTI).
CCJ, as can be seen in the chart above, is pressing against new all-time highs. We are long from around $38 on the low base breakout.
FTI (below) just bounced off its 50-day moving average and looks poised for new highs as well.
Bitcoin, which I don’t often comment on, looks really good too. The weekly chart below shows BTCUSD breaking out from a textbook stage 1 base on great volume.
I wouldn’t be surprised to see Bitcoin back up around $60k in the next 6-12 months.
That’s all for this week. I will see you in Monday’s live Stealth Trades session at 4pm ET.
Best wishes for your trading,
