Weekly Update: These Stealth Stocks Are Set Up for a Fearful Market
I’m putting together this list the morning of Friday, Nov. 26.
At the market open, the Dow was down over 850 points on renewed COVID fears.
A new heavily mutated coronavirus strain was discovered in South Africa, and the big but unsubstantiated fear is that it could be resistant to current vaccines.
Even though the market is only open until 1:00 p.m. ET today, it is possible we could see heavy selling if institutions begin liquidating on the news.
I continue to remain cautious in this market with such low stock participation.
Furthermore, I’m seeing fewer ideal setups in buyable positions.
In fact, I actually took a short position in the SPDR S&P 500 ETF Trust (SPY), an exchange-traded fund that tracks the S&P 500 index on Friday, with a tight stop above the high of the day.
If the market sells off even further on Friday, investors may consider staying out of the market for the next few days until we see how things play out.
Before we get to our Watchlist, if you’re a new member, be sure to watch the training videos on our website, including How to Find Stealth Trades and What are Stealth Trades?
You can also view our full Watchlist here and our Trade Tracker here.
Now, let’s get to the newest stocks on the Stealth Trades Watchlist:
Amazon.com, Inc.
Amazon.com, Inc. (AMZN) is the ubiquitous online retailer offering customers nearly anything they could ever want delivered straight to their doors.
The company also runs its lucrative Amazon Web Services (AWS) platform focused on cloud computing services.
Here’s how the chart is setting up:
And here’s how the stock is setting up with my Stealth System:
- Surge score: 70/100
- % Above 52-wk low: 25.4%
- MFI reading: 61
- Sales growth: +15%
- Triple momentum: yes
AMZN tried to break out last week but failed to follow through. It squatted back to the resistance level but quickly reversed back to the upside.
Renewed COVID fears have this stock up on Friday while most of the market is down.
A short-term pop in work-from-home stocks is expected, and AMZN is a good way to play it.
Traders now have the chance to buy AMZN near the original buy zone and work a tight stop to risk less than 5% on the trade.
The Real Brokerage Inc.
The Real Brokerage Inc. (REAX) is a $650 million real estate brokerage company based in Canada but with operations in the United States as well.
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: 421%
- MFI reading: 87
- Sales growth: +885%
- Triple momentum: yes
REAX formed a high tight flag pattern and quickly emerged to new highs after only six trading days.
The company is experiencing parabolic growth, and investors clearly have a big appetite for this stock.
As long as price does not get extended, the stock is buyable with a stop at $3.23.
Albertsons Companies, Inc.
Albertsons Companies, Inc. (ACI) is the $16 billion food and drug store operator, with 2,277 stores and 1,727 pharmacies along with in-store branded coffee shops and adjacent fuel centers.
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: 144%
- MFI reading: 42
- Sales growth: +5%
- Triple momentum: yes
I typically like to see higher sales growth than what Albertsons posted last quarter.
However, the company beat estimates in each of the last three quarters, and analysts are slowly raising their projections for the company.
Plus, the stock is actually up Friday morning in an ugly market.
We have a textbook consolidation pattern with pullbacks compressing down to a nice and tight 6%.
I would be comfortable buying here with a stop beneath the swing low.
On Holding AG
On Holding AG (ONON) is the $13 billion, Switzerland-based performance shoe and sportswear brand that makes the incredibly popular On Cloud shoe line.
The company went public in September and recently emerged from its initial IPO base.
Here’s how the chart is setting up:
And here’s how the stock is setting up with my Stealth System:
- Surge score: 94/100
- % Above 52-wk low: 49.4%
- MFI reading: 66
- Sales growth: +66%
- Triple momentum: yes
Retail stocks like this can make huge runs, especially when they are growing sales at nearly 100% per quarter like ONON.
Take a look at a chart of Crocs, Inc. (CROX) if you want to see what is possible.
After breaking out on Nov. 16, shares pulled back to the initial breakout area.
They bounced well on Wednesday but retraced a bit Friday morning on market weakness.
This gives traders the opportunity for a pullback buy in the $41-$42 area.
You could play this one with a fairly tight stop at $39.25 or $35.50 if you want to give it more room to potentially get in on a larger 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 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