Helmets Ready

Helmets Ready

BUYER’S EDGE

For the week, there little to suggest this bull market is done. Pullbacks on lighter volume across the sectors is exactly what buyers want to see. 

Election is a week from Tuesday. Get your helmets ready, there’s no telling what bombs may go off as politics heats up. 

Breadth and thrust trends remain Bullish.

Weekly Advancing/Declining Volume NYSE: 1.3, NASDAQ: 1.2
Accumulation/Distribution Count, 20 DaysS&P 500: 5/4, NASDAQ: 3/2
Weekly Advances/Declines, IssuesNYSE: 1.2, NASDAQ: 0.9
New HighsNYSE: 200 (-35%), NASDAQ: 245 (-37%)
New LowsNYSE: 76 (+27%), NASDAQ: 120 (+46%)

TOP DOWN, SECTOR PRICE ACTION & NEWS ANALYSIS

ETFNAME% CHG40WEMACHART
XLCCommunication Services Sector 2.19Trend up. 5% off 52-wk high. 
XLUUtilities Sector 1.17Trend up. 10% off 52-wk high. 
XLFFinancial Sector 1.04Rangebound. 24% off 52-wk high. 
XLEEnergy Sector 0.66Downtrend. 25% off 52-wk low. 
XLYConsumer Discretionary Sector 0.09Pullback. 2% off 52-wk high.
XLVHealth Care Sector -0.09Pullback. 2% off 52-wk high.
XLBMaterials Sector -0.41Pullback. 2% off 52-wk high.
XLIIndustrial Sector -0.53Pullback. 5% off 52-wk high.
XLPConsumer Staples Sector -1.18Pullback. 3% off 52-wk high.
XLREReal Estate Sector -1.33Rangebound. 30% off 52-wk low,
XLKTechnology Sector -2.21Pullback. 8% off 52-wk high.

Look for Financials to trend higher to validate the bull.

Higher bond yields made headlines as Financials ETF (XLF, %), as Regional Banks (KRE, Retail ETF (XRT, +8%) soared higher along with the bigger Banks (KBE, +6.43%)

JPMogan (JPM, +2.27%) is entering the mobile payments business, allowing customers to charge credit cards with a contactless reader. The space was pioneered by Square (SQ, -5.14%) and PayPal (PYPL, -0.69%), who announced it will be allowing its customers to buy and well with cryptocurrencies like bitcoin. 

A pause in Big Tech leadership threatens to pull it all down. This sector is the relative strength king since the rally off the March lows.  

The Technology (XLK, -2.21%) was the biggest losing sector of the week as Apple (AAPL, -3.34%) pulled back on lighter volume amidst uncertainty over iPhone 12 release date and earnings guidance. Microsoft (MSFT, -1.56%) trades in like fashion. 

Watch the 50-day moving averages for support, as it would be typical to see some type of high-volume battle here. 

Semiconductors (SMH, -0.10%) are holding a nice, tight pull back to its up trending 20-DMA. Strength here is always good for the market in general. 

Communication Services (XLC, +0.75%) was the strongest sector for the week. 

Facebook (FB, +7%) will report earnings Thursday, and is expected to report strong ad revenue like its peers. Meanwhile, Alphabet (GOOG, +4.32%) said it will fight back against antitrust suits filed against it in 11 states. 

Netflix (NFLX, -1.60%) added 2.2 million subscribers for the third quarter, well below the 16 million and 10 million in the first and second quarters. 

Snap (SNAP, +55%) soared above its 2017 IPO price for a base breakout on news of higher revenue. The Internet Content industry fired up over the news, with Pinterest (PINS, +20.29%), Twitter (TWTR, +10%) and Spotify (SPOT, +8%,) 

Tesla (TSLA, -4.33%) is holding its base after saying it was on target to sell half a million cars this year. The electric car maker has been profitable for five quarters in a row. Production is in the works for its self-driving taxis. 

Healthcare (XLV, -0.09%) was quiet as Biotech (IBB, -2.30%) retreated for the second week in a row. CRISPR Therapeutics (CRSP, -15.64%) had a major about face on heavy selling, no news. 

Gilead Sciences (GILD, -1.95%) hit a seven-year low as its Covid-19 treatment drug remdesivir approved by the FDA. Not good. 

GSRTRADES

These are the stocks in breakout mode that meet the strict criteria for Growth Stock Trades.

These top names are leadership and will help determine the success of others on our Bases and Lower Bases lists. Strong representation from biotech, cloud computing, stay at home, work at home, software and online retail. 

BREAKOUTS & PULLBACKS

TickerCompany NameIndustryGRADEDEMAND
FOLDAmicus Therapeutics, Inc.Biotechnology4X++
EXASExact Sciences CorporationBiotechnology2X 
FVRRFiverr International Ltd.Data Processing Services3X++
ZENZendesk, Inc.Data Processing Services4X++
ROKURoku, Inc. Class AElectronics/Appliances4X++
PFSIPennyMac Financial Services, Inc.Finance/Rental/Leasing1P++
BYNDBeyond Meat, Inc.Food: Major Diversified2X+
ZZillow Group, Inc. Class CInformation Technology Services2X++
SQSquare, Inc. Class AInformation Technology Services4P++
NETCloudflare Inc Class AInformation Technology Services4X++
APPSDigital Turbine, Inc.Internet Software/Services3P++
SNAPSnap, Inc. Class AInternet Software/Services4X++
NVCRNovoCure Ltd.Medical Specialties4P++
ETSYEtsy, Inc.Miscellaneous Commercial Services3P++
PTONPeloton Interactive, Inc. Class AOther Consumer Services1X++
ZMZoom Video Communications, Inc. Class APackaged Software1P++
CRWDCrowdStrike Holdings, Inc. Class APackaged Software1X++
DDOGDatadog Inc Class APackaged Software2P++
VEEVVeeva Systems Inc Class APackaged Software4P++
OKTAOkta, Inc. Class APackaged Software4X++
TEAMAtlassian Corp. Plc Class APackaged Software4X++
TWLOTwilio, Inc. Class APackaged Software4X++
IIPRInnovative Industrial Properties IncReal Estate Investment Trusts1P++
GRUBGrubhub, Inc.Specialty Stores4X+

Countdown

BUYERS’ EDGE
Growth stock breakouts are sticking.

For the week, major indexes were little changed after falling back from attempts at new highs.   

Buyers remain uninspired as fear of resurgent coronavirus cases and fruitless government stimulus negotiations dominate headlines. Heavy bets on the market may be off ahead of the Presidential election in two weeks.

INDEXWEEK CLOSECHANGEWEEK % YTD %
DJIA28,606190.10.2
Nasdaq11,672920.830.1
S&P 5003,48470.27.8
Russell 20001,634-4-0.2-2.1

A Shift to small-cap stocks was evident as the Russell 2K plays catchup with major indexes. Lots of talk regarding who’s leading the election polls and what it means for the market. No need to get political here. Just observe. 

Breadth and thrust stays bullish.

Weekly Adv/Decl Volume 
NYSE: 1.1, NASDAQ: 1.1 – Bullish.
Accum./Dist. Count – 20 Days S&P 500: 5/4, NASDAQ: 3/3
Weekly Adv/Dec Issues
NYSE: 0.6, NASDAQ: 0.9 – Slightly Bearish.
New Highs – NYSE: 389, NASDAQ: 308
New Lows – NYSE: 60, NASDAQ: 82

Coronavirus numbers are reportedly up with 22 states hitting record of a thousand new cases. Germany, Italy and France have tightened social restrictions to fight contagion. 

The big get bigger. Layoffs in the hundreds of thousands, as well as a record amount of small business closures, tell a different story than what Wall Street earnings portray. 

Earnings boosts driven by government stimulus and a recovering economy have been cause for optimism. 

Third quarter earnings for S&P 500 companies are expected to be down 20% from a year ago. But if so, would be better than predicted earlier in the year, as well as the 30% fall in the second quarter. 

Expect growth stocks with business models that cater to stay at home at work from home to do very well, especially with the wind of a V-shaped economic recovery at their back. But keep in mind those earnings are last quarter.

Some hedge funds are reportedly shorting companies benefiting from covid closures, arguing the stay at home business has hit its peak. Ground up analysis key in this environment, watch your local cash registers.

WEEKLY SECTOR ACTION

ETFNAME% CHG40WEMACHART
XLIIndustrial Sector Fund1.1New High. 
XLUUtilities Sector Fund0.82Right Base Forming. 
XLKTechnology Sector Fund0.785% Off High. 
XLCCommunication Services Sector Fund0.758% Off High. 
XLPConsumer Staples Sector Fund0.652% Off High. 
XLYConsumer Discretionary Sector Fund-0.35New High. 
XLBMaterials Sector Fund-0.36New High. 
XLVHealth Care Sector Fund-0.41New High. 
XLFFinancial Sector Fund-0.95Treading. 
XLEEnergy Sector Fund-1.9524% Off Low. 
XLREReal Estate Sector Fund-2.2231% Off Low. 

Financials (XLF, -0.95%) struggles to stay above its 40-week moving average as the sector threatens to pull the market lower.  

It was a big news week for banks as JPMorgan Chase (JPM, +0.31%) and Citigroup (C, -3.87%) handily beat earnings expectations, though were less confident with their outlooks. 

Bank of America (BAC, -4.42%) said consumer spending for its customers was up compared to a year ago, and that credit card delinquencies were down. But Don’t be surprised to see credit defaults spike after government stimulus wears off. 

Retail (XRT, +0.44%) hit another new high since breaking out last week. Retail spending appears healthy with a 1.9% increase for the month, beating a consensus 0.8% increase. 

Technology (XLK, +.78%) threatens to slow its climb as titans Apple (AAPL, +1.75%), whose stock didn’t have much reaction to the company’s revealing of its iPhone 12, and Microsoft (MSFT, +1.78%) posted a close in retreat from its weekly and all-time high. 

Communication (XLC, +0.75%) was little changed as components Facebook (FB, +0.56%) and Alphabet (GOOG, +3.81%) , as well as Apple, face pressure from the European Union for being too powerful, and may be subject to more rules to make them more transparent with data collection.

Netflix (NFLX, -1.60%) struggled to breakout to a new high as it faces competition from Walt Disney (DIS), who said it would focus on making its growing streaming services the main part of its business. Growth stock Roku (ROKU, -0.78%) is holding a solid uptrend since breaking out of its base a month ago.  

Semiconductors (SMH, -0.10%) hit a new high as it holds leadership status with a strong uptrend. PC sales rose 14.6% for the third quarter, their highest rate in a decade as work, and stay at home trends fueled demand. 

On the cloud computing front Fastly (FSLY, -33%) dampened moods as it lost a third of its market value after announcing third quarter revenue would fall 5% short of expectations as customers, including its largest TikTok, used less of its service than expected. 

Elsewhere in the cloud industry, Cloudfare Inc. (NET, +25.76%) scorched higher as the new cloud darling, and Twilio (TWLO) bought customer data startup Segment for $3.2B. Recent IPO Snowflake (SNOW, +1.90%) struggles to rise above its open price from a month ago.  

Healthcare (XLV, -0.41%) scratched a new high before retreating as Biotech (IBB, -1.98%) closed lower for the week despite several names holding breakout form and setting up in bases. See Setups.  

Autonomous vehicles are coming closer to streets near you. Google’s Waymo said it would put driverless cars with no human backups on the streets of the Phoenix are. General Motors (GM, +4%) will be joining in after receiving a permit for California to do the same. 

GSRTRADES BREAKOUTS & PULLBACKESThese breakout stocks met the strict GSRTrades fundamental criteria and have broken out of technical bases.

Strong representation from biotech, cloud computing, stay at home, work at home, software and online retail. 

TickerCompany NameIndustryGradeDemand
EXASExact Sciences CorporationBiotechnology2X+
FATEFate Therapeutics, Inc.Biotechnology3X++
FOLDAmicus Therapeutics, Inc.Biotechnology4X++
INSMInsmed IncorporatedBiotechnology2X++
TWSTTwist Bioscience Corp.Biotechnology4X++
BPMCBlueprint Medicines Corp.Biotechnology2X+
FVRRFiverr International Ltd.Data Processing Services3X++
TERTeradyne, Inc.Electronic Production Equipment4P+
ROKURoku, Inc. Class AElectronics/Appliances4X++
STRLSterling Construction Company, Inc.Engineering & Construction4P
COOPMr. Cooper Group, Inc.Finance/Rental/Leasing2P++
PFSIPennyMac Financial Services, Inc.Finance/Rental/Leasing1P++
EXPIeXp World Holdings, Inc.Financial Conglomerates4P++
BYNDBeyond Meat, Inc.Food: Major Diversified2X+
FRPTFreshpet IncFood: Specialty/Candy4P++
GRBKGreen Brick Partners, Inc.Homebuilding4P++
FIVNFive9, Inc.Information Technology Services4X++
GLOBGlobant SAInformation Technology Services4P++
NOWServiceNow, Inc.Information Technology Services4P++
QTWOQ2 Holdings, Inc.Information Technology Services4X+
UPLDUpland Software, Inc.Information Technology Services4X
NETCloudflare Inc Class AInformation Technology Services4X++
SQSquare, Inc. Class AInformation Technology Services4P++
MELIMercadoLibre, Inc.Internet Software/Services4X++
APPSDigital Turbine, Inc.Internet Software/Services3P++
FRHCFreedom Holding Corp.Investment Banks/Brokers3P++
PIPRPiper Sandler CompaniesInvestment Banks/Brokers4P
PJTPJT Partners, Inc. Class AInvestment Banks/Brokers4P+
PODDInsulet CorporationMedical Specialties4P++
NVCRNovoCure Ltd.Medical Specialties4P++
PRPLPurple Innovation, Inc.Miscellaneous4P++
ETSYEtsy, Inc.Miscellaneous Commercial Services3P++
KNSLKinsale Capital Group, Inc.Multi-Line Insurance4P++
PTONPeloton Interactive, Inc. Class AOther Consumer Services1X++
AVLRAvalara IncPackaged Software4X++
MDBMongoDB, Inc. Class APackaged Software4X++
OKTAOkta, Inc. Class APackaged Software4X++
TEAMAtlassian Corp. Plc Class APackaged Software4X++
TENBTenable Holdings, Inc.Packaged Software4X++
ZSZscaler, Inc.Packaged Software4X++
DDOGDatadog Inc Class APackaged Software2P++
TWLOTwilio, Inc. Class APackaged Software4X++
BMYBristol-Myers Squibb CompanyPharmaceuticals: Major4X+
GMREGlobal Medical REIT IncReal Estate Investment Trusts4P+
NVDANVIDIA CorporationSemiconductors4P++
TRUPTrupanion, Inc.Specialty Insurance4P++
LOVELovesac CompanySpecialty Stores4X++

These top names serve as leadership, and will help determine the success of other potential breakouts found on our Bases and Lower Bases lists.

Keep your head clear,

Dan

GSRTrades October 10, 2020

PULLBACKS

TickerCompany NameSectorIndustryGradeFunds
AXNXAxonics Modulation Technologies, Inc.Health TechnologyMedical Specialties1X++
BANDBandwidth Inc. Class ACommercial ServicesMiscellaneous Commercial Services4.3++
COOPMr. Cooper Group, Inc.FinanceFinance/Rental/Leasing2P++
EXASExact Sciences CorporationHealth TechnologyBiotechnology2X+
GRBKGreen Brick Partners, Inc.Consumer DurablesHomebuilding4.1+
NFENew Fortress Energy Inc. Class AIndustrial ServicesEngineering & Construction1X++
ZZillow Group, Inc. Class CTechnology ServicesInformation Technology Services2X++
ZMZoom Video Communications, Inc. Class ATechnology ServicesPackaged Software1P++

BASES

TickerCompany NameSectorIndustryGradeFunds
AAXNAxon Enterprise IncElectronic TechnologyAerospace & Defense4.3
AMDAdvanced Micro Devices, Inc.Electronic TechnologySemiconductors4.1++
AMEHApollo Medical Holdings, Inc.Health ServicesServices to the Health Industry4.1
APPFAppFolio Inc Class ATechnology ServicesInformation Technology Services4.1+
ATLCAtlanticus Holdings Corp.FinanceFinance/Rental/Leasing4.1++
BMYBristol-Myers Squibb CompanyHealth TechnologyPharmaceuticals: Major4.3+
CCXIChemocentryx, Inc.Health TechnologyBiotechnology1X++
CELHCelsius Holdings, Inc.Consumer Non-DurablesBeverages: Non-Alcoholic3P++
CEVACEVA, Inc.Electronic TechnologySemiconductors4.1+
CHCTCommunity Healthcare Trust, Inc.FinanceReal Estate Investment Trusts4.1+
CHGGChegg, Inc.Commercial ServicesMiscellaneous Commercial Services4.1++
CHRSCoherus BioSciences, Inc.Health TechnologyBiotechnology2P
CNCCentene CorporationHealth ServicesManaged Health Care4.1+
CRWDCrowdStrike Holdings, Inc. Class ATechnology ServicesPackaged Software1X++
FISFidelity National Information Services, Inc.Technology ServicesData Processing Services4.3
GMREGlobal Medical REIT IncFinanceReal Estate Investment Trusts4.1+
GRUBGrubhub, Inc.Retail TradeSpecialty Stores4.3+
INFUInfuSystem Holdings, Inc.Health TechnologyMedical Specialties4.2++
KNSLKinsale Capital Group, Inc.FinanceMulti-Line Insurance4.1++
LOVELovesac CompanyRetail TradeSpecialty Stores4.3++
LVGOLivongo Health, Inc.Technology ServicesPackaged Software1P++
MBINMerchants BancorpFinanceRegional Banks3P+
MDBMongoDB, Inc. Class ATechnology ServicesPackaged Software4.3++
MELIMercadoLibre, Inc.Technology ServicesInternet Software/Services4.3++
MKTXMarketAxess Holdings Inc.FinanceInvestment Banks/Brokers4.1++
NEWTNewtek Business Services Corp.Commercial ServicesMiscellaneous Commercial Services3P
NTLAIntellia Therapeutics, Inc.Health TechnologyBiotechnology4.3++
NVDANVIDIA CorporationElectronic TechnologySemiconductors4.1++
NVEENV5 Global IncCommercial ServicesMiscellaneous Commercial Services4.1
PLANAnaplan, Inc.Technology ServicesPackaged Software4.3+
PLDPrologis, Inc.FinanceReal Estate Investment Trusts4.1+
PTGXProtagonist Therapeutics, Inc.Health TechnologyBiotechnology1X++
QDELQuidel CorporationHealth TechnologyMedical Specialties3P++
QTWOQ2 Holdings, Inc.Technology ServicesInformation Technology Services4.3+
RPDRapid7 Inc.Technology ServicesInformation Technology Services4.3+
SAFESafehold Inc.FinanceReal Estate Investment Trusts1P++
SAMBoston Beer Company, Inc. Class AConsumer Non-DurablesBeverages: Alcoholic4.1++
SHOPShopify, Inc. Class ARetail TradeInternet Retail3X++
SINASINA Corp.Technology ServicesInternet Software/Services4.1
SPWHSportsman's Warehouse Holdings, Inc.Retail TradeSpecialty Stores3P++
STRLSterling Construction Company, Inc.Industrial ServicesEngineering & Construction4.1
TDOCTeladoc Health, Inc.Health ServicesHospital/Nursing Management3X++
TEAMAtlassian Corp. Plc Class ATechnology ServicesPackaged Software4.3++
TENBTenable Holdings, Inc.Technology ServicesPackaged Software4.3++
UPLDUpland Software, Inc.Technology ServicesInformation Technology Services4.3
VEEVVeeva Systems Inc Class ATechnology ServicesPackaged Software4.1++
WWayfair, Inc. Class ARetail TradeInternet Retail3X++
ZSZscaler, Inc.Technology ServicesPackaged Software4.3++

LOWER BASES

TickerCompany NameSectorIndustryGradeFunds
ABCBAmeris BancorpFinanceRegional Banks4.1
ACADACADIA Pharmaceuticals Inc.Health TechnologyBiotechnology4.3+
ACMRACM Research, Inc. Class AProducer ManufacturingIndustrial Machinery4.2++
ADCAgree Realty CorporationFinanceReal Estate Investment Trusts4.1
AEISAdvanced Energy Industries, Inc.Electronic TechnologyElectronic Production Equipment1P
AEYEAudioEye, Inc.Technology ServicesInternet Software/Services1X++
AGIOAgios Pharmaceuticals, Inc.Health TechnologyBiotechnology2X
ALBOAlbireo Pharma, Inc.Health TechnologyPharmaceuticals: Other2X++
ALNYAlnylam Pharmaceuticals, IncHealth TechnologyBiotechnology1X++
AMZNAmazon.com, Inc.Retail TradeInternet Retail4.1++
APTAlpha Pro Tech, Ltd.Health TechnologyMedical Specialties3P++
ARVNArvinas, Inc.Health TechnologyBiotechnology2X+
ASMBAssembly Biosciences, Inc.Health TechnologyPharmaceuticals: Other1X++
ASPUAspen Group, Inc.Consumer DurablesOther Consumer Specialties4.3++
ATNXAthenex, Inc.Health TechnologyPharmaceuticals: Major3X+
BAMBrookfield Asset Management Inc. Class AFinanceInvestment Managers2P
BERYBerry Global Group IncProcess IndustriesContainers/Packaging4.2+
BLUEbluebird bio, Inc.Health TechnologyBiotechnology1X
CFBKCF Bankshares IncFinanceSavings Banks1P
CHWYChewy, Inc. Class ARetail TradeInternet Retail4.3++
CNQCanadian Natural Resources LimitedEnergy MineralsOil & Gas Production4.2
CODXCo-Diagnostics, Inc.Health TechnologyBiotechnology1P++
COHNCohen & Company IncFinanceFinancial Conglomerates3X++
COUPCoupa Software, Inc.Technology ServicesPackaged Software4.3++
CRMsalesforce.com, inc.Technology ServicesPackaged Software4.1++
CUZCousins Properties IncorporatedFinanceReal Estate Investment Trusts4.2
DMTKDermTech, Inc.Health TechnologyMedical Specialties2X++
DOCUDocuSign, Inc.Technology ServicesPackaged Software4.3++
DRNADicerna Pharmaceuticals, Inc.Health TechnologyBiotechnology1X+
DTDynatrace, Inc.Technology ServicesPackaged Software4.3++
DXCMDexCom, Inc.Health TechnologyMedical Specialties4.2++
EBSEmergent BioSolutions Inc.Health TechnologyBiotechnology4.2++
ECOLUS Ecology, Inc.Industrial ServicesEnvironmental Services4.4
EDITEditas Medicine, Inc.Health TechnologyBiotechnology3X+
EGHT8×8, Inc.Technology ServicesPackaged Software4.3
EHTHeHealth, Inc.FinanceLife/Health Insurance2P+
ESPREsperion Therapeutics, Inc.Health TechnologyBiotechnology3X
EVBGEverbridge, Inc.Technology ServicesPackaged Software4.4++
EVEREverQuote, Inc. Class ATechnology ServicesInternet Software/Services4.3++
FBCFlagstar Bancorp, Inc.FinanceFinancial Conglomerates4.1
FBMSFirst Bancshares, Inc.FinanceMajor Banks4.1
FISVFiserv, Inc.Technology ServicesData Processing Services1P
FOLDAmicus Therapeutics, Inc.Health TechnologyBiotechnology4.3++
FORForestar Group Inc.FinanceReal Estate Development1P
FSFGFirst Savings Financial Group, Inc.FinanceRegional Banks1P
GBDCGolub Capital BDC, Inc.FinanceInvestment Managers4.3
GNMKGenMark Diagnostics, Inc.Health TechnologyMedical Specialties3X++
GPNGlobal Payments Inc.Technology ServicesData Processing Services1P
GRWGGrowGeneration Corp.Distribution ServicesWholesale Distributors1P++
HARPHarpoon Therapeutics, Inc.Health TechnologyBiotechnology1X+
HESMHess Midstream LP Class AEnergy MineralsIntegrated Oil4.2
HIHillenbrand, Inc.Producer ManufacturingIndustrial Conglomerates4.3
HQYHealthEquity IncFinanceInvestment Managers1X
HVBCHV Bancorp, Inc.FinanceRegional Banks4.1
ICHRIchor Holdings, Ltd.Electronic TechnologySemiconductors4.1
INSWInternational Seaways, Inc.TransportationMarine Shipping3P
IPHIInphi CorporationElectronic TechnologySemiconductors3X++
KNOPKNOT Offshore Partners LPTransportationMarine Shipping4.1
KPTIKaryopharm Therapeutics, Inc.Health TechnologyBiotechnology1X+
LAKELakeland Industries, Inc.Process IndustriesIndustrial Specialties4.1++
LHXL3Harris Technologies IncElectronic TechnologyAerospace & Defense1P
MCBMetropolitan Bank Holding Corp.FinanceMajor Banks4.1
MEOHMethanex CorporationProcess IndustriesChemicals: Specialty4.1
MGNXMacroGenics, Inc.Health TechnologyBiotechnology3X++
MPWMedical Properties Trust, Inc.FinanceReal Estate Investment Trusts4.1
MSONMisonix IncHealth TechnologyMedical Specialties4.4
MVBFMVB Financial Corp.FinanceRegional Banks4.1
NBIXNeurocrine Biosciences, Inc.Health TechnologyBiotechnology4.2
NKTRNektar TherapeuticsHealth TechnologyPharmaceuticals: Major3X
NTRNutrien Ltd.Process IndustriesChemicals: Agricultural1P
NVAXNovavax, Inc.Health TechnologyBiotechnology1X++
NXSTNexstar Media Group, Inc. Class AConsumer ServicesBroadcasting4.1
ONTOOnto Innovation, Inc.Electronic TechnologyElectronic Production Equipment1X
OPCHOption Care Health IncHealth ServicesMedical/Nursing Services4.3
OSBNorbord Inc.Non-Energy MineralsForest Products4.2+
OTRKOntrak, Inc.Health ServicesMedical/Nursing Services1X++
PBProsperity Bancshares, Inc.(R)FinanceRegional Banks4.1
PBAPembina Pipeline CorporationIndustrial ServicesOil & Gas Pipelines4.2
PDPagerDuty, Inc.Technology ServicesPackaged Software4.3+
PFHDProfessional Holding Corp Class AFinanceRegional Banks3P
PLYMPlymouth Industrial REIT, Inc.FinanceReal Estate Investment Trusts4.4
PWPower REITFinanceReal Estate Investment Trusts3P++
RBNCReliant Bancorp IncFinanceRegional Banks3P
RCIRogers Communications Inc. Class BCommunicationsWireless Telecommunications3P
RNGRingCentral, Inc. Class ATechnology ServicesPackaged Software4.3++
RNRRenaissanceRe Holdings Ltd.FinanceProperty/Casualty Insurance4.2
SBGISinclair Broadcast Group, Inc. Class AConsumer ServicesBroadcasting2P
SMARSmartsheet, Inc. Class ATechnology ServicesPackaged Software4.3++
SMPLSimply Good Foods CoConsumer Non-DurablesFood: Major Diversified4.2
SRPTSarepta Therapeutics, Inc.Health TechnologyBiotechnology4.4++
SWBISmith & Wesson Brands, Inc.Electronic TechnologyAerospace & Defense3X++
TBIOTranslate Bio, Inc.Health TechnologyBiotechnology1X++
TERTeradyne, Inc.Electronic TechnologyElectronic Production Equipment4.1+
TFCTruist Financial CorporationFinanceRegional Banks3P
TWOU2U, Inc.Technology ServicesPackaged Software4.4++
VAPOVapotherm, Inc.Health TechnologyMedical Specialties3X++
VCTRVictory Capital Holdings, Inc. Class AFinanceInvestment Managers1P+
VIRTVirtu Financial, Inc. Class AFinanceInvestment Banks/Brokers1P++
VRTXVertex Pharmaceuticals IncorporatedHealth TechnologyBiotechnology4.2++
VTOLBristow Group IncTransportationOther Transportation1P
WBWeibo Corp Sponsored ADR Class ATechnology ServicesInternet Software/Services2P
WINGWingstop, Inc.Consumer ServicesRestaurants4.2+
WIXWix.com Ltd.Technology ServicesInformation Technology Services4.3++
WORKSlack Technologies, Inc. Class ATechnology ServicesPackaged Software4.3+
WSBFWaterstone Financial, Inc.FinanceFinancial Conglomerates4.1
WTRGEssential Utilities, Inc.UtilitiesWater Utilities3P
ZYXIZynex, Inc.Health TechnologyMedical Specialties3P++

BROKEN

TickerCompany NameSectorIndustryGradeFunds
LANDGladstone Land Corp.FinanceReal Estate Investment Trusts4.4++
PDEXPro-Dex, Inc.Health ServicesMedical/Nursing Services4.1++
PLMRPalomar Holdings, Inc.FinanceProperty/Casualty Insurance2P++

Whip It

Quick Take: Buyer’s Edge. Growth stock buyers on the prowl. 

President Trump’s Tweets appeared to whipsaw the market this week after he gave up support for, then backtracked on economic stimulus negotiations with congress. You must wonder how the algo traders weathered that one. 

We’re in the final weeks before the Presidential election. Expect more volatility. 

INDEXWEEK CLOSECHANGE% CHANGEYTD %
DJIA28586.90904.093.30.2
Nasdaq11579.94504.924.629.1
S&P 5003477.14128.723.87.6
Russell 20001637.5598.256.4-1.8
Strong buying above 50-DMA, trend up.
Growth Stock Bias: BUYERS’ EDGEAdvances Declines For Week:NYSE 3.3, Nasdaq 3.8
Accumulation/Distribution Count For Month: S&P 500 5/5, Nasdaq 4/4Advancing/Declining Volume For The Week:NYSE 1.9, Nasdaq 2.1

It’s unclear if the market has a preference for the negotiations to continue. As of Friday, Trump said talks are on. McConnell has said it’s unlikely any deal would be made before the election. 

The market may be more vulnerable to a contested election rather than a particular candidate winning or losing. Obama didn’t raise taxes when he took office during the financial crisis, Biden probably won’t, at first, either.

The V-shaped economic recovery is intact. The overall general data supports this. Though we’re still perhaps another year away from returning to pre-pandemic numbers as far as jobs and output. 

What we want to see as Growth Stock investors is continued earnings success from companies benefiting from the environment. Funds buy businesses, not economies.

We’re in an environment of easy money from the Fed. Buyouts and mergers in effect. The hunt for yield is being played out in stocks. 

LEADERSHIP 

SYMBOLNAME% CHG
XLBMaterials Sector Fund5.07
XLEEnergy Sector Fund5.05
XLUUtilities Sector Fund4.6
XLKTechnology Sector Fund4.56
XLVHealth Care Sector Fund4.03
XLIIndustrial Sector Fund3.99
XLFFinancial Sector Fund3.83
XLYConsumer Discretionary Sector Fund3.45
XLPConsumer Staples Sector Fund2.56
XLCCommunication Services Sector Fund2.15
XLREReal Estate Sector Fund1.37

Consumer Discretionary and Materials are the strongest horses in this race as they hits 52-week highs. 

Technology (XLK, +4.56%) titans Alphabet (GOOG, +3.89%), Amazon.com (AMZN, +5.17%), Apple (AAPL, +3.49%), and Facebook (FB, +1.74%) are under political pressure after a House antitrust subcommittee accused them of holding monopoly power. The group recommended separating parts of their businesses. 

Weakness from the group could weigh on this growth stock rally. Watch as these names wrestle with their 50-day moving averages, the technical outcome will be bullish looking new bases or bearish right shoulders. 

Semiconductors (SMH, +7.8%) lit it up this week as key players reported and forecasted strong sales. news that Xilinx (XLNX, +17.89%) is in talks to be acquired by AMD (AMD, +1.59%) for $30 billion.

Retail is casting a positive vote for the broader market with the S&P Retail ETF (XRT, +5.36%) breaking out to a new high. The survivors get stronger. Big Lots (BIG, +10.67%) and Lowes (LOW, +4.05%) are climbing higher as they post great sales and earnings.

Healthcare (XLV, +4.03%) is just off a new high, being led by Biotech (IBB, +6.47%) as a number of companies possessing strong fundamentals breakout of bases. They’ve been included in The Growth Stock Report for months.

The Financials ETF (XLF, +3.83%) is recovering from technical brokenness. We’d expect it to fall back into bullish form for the market to have more durable strength in the long run. 

Small caps are just shy of positive territory for the year as measured by the Russell 2000 Index. 

At some point the money will flow to value-oriented stocks – but not now. 

A sell off in the US Dollar has Gold benefiting as it looks to hold its head above an eight-year base breakout.  

Square (SQ, 10.42%), an online payment company, grabbed headlines with its $50 million, purchase of the Bitcoin currency. That’s 1% of the company’s assets. 

Bitcoin spiked 4% on the Square announcement. Speculation is more companies will invest in Bitcoin. ARK Next Generation Internet ETF (ARKW, +7.07%) bought into the Grayscale Bitcoin Trust (GBTC, +8.38%) they announced Friday. The 451, 179 shares they reported buying would be worth $5.3M at closing price Friday. 

GSRTRADES

These are the stocks in breakout mode that meet the strict criteria for Growth Stock Trades.

These top names are leadership and will help determine the success of others on our Bases and Lower Bases lists. Strong representation from biotech, cloud computing, stay at home, work at home, software and online retail. 

BREAKOUTS

TickerCompany NameSectorIndustryGradeFunds
BPMCBlueprint Medicines Corp.Health TechnologyBiotechnology2X+
FATEFate Therapeutics, Inc.Health TechnologyBiotechnology3X++
INSMInsmed IncorporatedHealth TechnologyBiotechnology2X++
RAREUltragenyx Pharmaceutical, Inc.Health TechnologyBiotechnology1X++
SGENSeattle Genetics, Inc.Health TechnologyBiotechnology4.3++
TWSTTwist Bioscience Corp.Health TechnologyBiotechnology4.3++
XLRNAcceleron Pharma IncHealth TechnologyBiotechnology2X++
FVRRFiverr International Ltd.Technology ServicesData Processing Services3X++
ZENZendesk, Inc.Technology ServicesData Processing Services4.3+
ROKURoku, Inc. Class AConsumer DurablesElectronics/Appliances4.3++
PFSIPennyMac Financial Services, Inc.FinanceFinance/Rental/Leasing1P++
EXPIeXp World Holdings, Inc.FinanceFinancial Conglomerates4.1++
BYNDBeyond Meat, Inc.Consumer Non-DurablesFood: Major Diversified2X+
FRPTFreshpet IncConsumer Non-DurablesFood: Specialty/Candy4.1++
FIVNFive9, Inc.Technology ServicesInformation Technology Services4.3++
FSLYFastly, Inc. Class ATechnology ServicesInformation Technology Services4.3++
GLOBGlobant SATechnology ServicesInformation Technology Services4.1++
NETCloudflare Inc Class ATechnology ServicesInformation Technology Services4.3++
NOWServiceNow, Inc.Technology ServicesInformation Technology Services4.1++
SQSquare, Inc. Class ATechnology ServicesInformation Technology Services4.1++
APPSDigital Turbine, Inc.Technology ServicesInternet Software/Services3P++
FRHCFreedom Holding Corp.FinanceInvestment Banks/Brokers3P++
PIPRPiper Sandler CompaniesFinanceInvestment Banks/Brokers4.1
PJTPJT Partners, Inc. Class AFinanceInvestment Banks/Brokers4.1+
CDNACareDx, Inc.Health TechnologyMedical Specialties4.3++
NVCRNovoCure Ltd.Health TechnologyMedical Specialties4.1++
PODDInsulet CorporationHealth TechnologyMedical Specialties4.1++
PRPLPurple Innovation, Inc.MiscellaneousMiscellaneous4.1++
ETSYEtsy, Inc.Commercial ServicesMiscellaneous Commercial Services3P++
PTONPeloton Interactive, Inc. Class AConsumer ServicesOther Consumer Services1X++
AVLRAvalara IncTechnology ServicesPackaged Software4.3++
DDOGDatadog Inc Class ATechnology ServicesPackaged Software2P++
ESTCElastic NVTechnology ServicesPackaged Software4.3+
OKTAOkta, Inc. Class ATechnology ServicesPackaged Software4.3++
TWLOTwilio, Inc. Class ATechnology ServicesPackaged Software4.3++
ICLRICON PlcHealth TechnologyPharmaceuticals: Other4.1+
IIPRInnovative Industrial Properties IncFinanceReal Estate Investment Trusts1P+
TRUPTrupanion, Inc.FinanceSpecialty Insurance4.1++

Picking a good stock to trade is one thing. Picking one for investment is another. The longer the hold time, the more in depth we get into the company’s business model. 

More to come,

Dan

Ride It

Quick Take: Buyer’s Edge. Don’t fight a Bull, ride it.

We have a bullish Follow Through Day to hang our Viking hats on. Big buying equates to firm believing. 

Growth Stocks are alive and well in a market that sees relatively light selling in the face of all kinds of uncertainty.  The Nasdaq has posted four each of Accumulation and Distribution days over the past month. The S&P 500 has split five each. 

INDEXWEEK CLOSECHANGE% CHANGEYTD %
DJIA27682.81508.851.9-3.0
Nasdaq11075.02161.461.523.4
S&P 5003348.4249.961.53.6
Russell 20001539.3064.394.4-7.7

We’re in the final stretch to the election. President Trump and the First Lady have reportedly tested positive for the coronavirus. It’s that kind of year. 

Look for signs of who the market is voting for. Friday’s price action leaves little to grasp, and much will depend on the how well the fight between the President and the virus goes.  

Trump will portray strength. Though initial mild symptoms, as they are for most, though have been known to give way to more serious symptoms. 

The economic recovery is being judged for speed. 

A disappointing September employment report showed a slower than expected recovery process as fear of permanent job losses is increasing.

The unemployment rate dropped to 7.9% from 8.4%, but the labor force participation rate fell to 61.4% from 61.7%. Lack job growth was coupled with a lack of growth in average hourly earnings.

Job data from California was not included as it grapples with large numbers of claims and suspected fraud. A significant omission from our most populous state.

Walt Disney (DIS) is laying off 28,000 employees, and the airline industry could be announcing even more layoffs as of tomorrow without a stimulus plan.

House Speaker Pelosi and Treasury Secretary Mnuchin are still negotiating a possible stimulus plan.

Good earnings expected for the third quarter. 

The fourth quarter has historically been great for stocks. It has also marked many pivotal lows for the market. 

WEEKLY SECTOR ACTION

Nearly all sectors positive with the exception of energy as crude prices fell 8%.

Real estate and financials led the way. Not so much a growth story here as much as a rebound.

SYMBOLNAME% CHG
XLREReal Estate Sector Fund5.08
XLFFinancial Sector Fund3.45
XLUUtilities Sector Fund3.35
XLYConsumer Discretionary Sector Fund3.02
XLPConsumer Staples Sector Fund1.68
XLIIndustrial Sector Fund1.46
XLBMaterials Sector Fund1.34
XLVHealth Care Sector Fund1.11
XLCCommunication Services Sector Fund0.92
XLKTechnology Sector Fund0.88
XLEEnergy Sector Fund-2.88

LEADERSHIP

The tech giants leading this bull have slowed their pace. Watch the 50-day moving averages for signs of recovery or perhaps leadership for the market to downside. 

Apple (AAPL, +0.66%) and Facebook (FB, +2.01%) are trending higher along their upward trending 50-day moving average. Amazon (AMZN, +0.97%) is treading water here.

Downward slopes of the 50-day MA’s for Alphabet (GOOG, +0.93%) and Microsoft (MSFT, -0.78%) are cracks in an otherwise good picture for the group. Let’s see if they can straighten it out. 

Lots of attractive setups in Biotech as the Nasdaq Biotech ETF (IBB, +0.30%) holds its five-year base breakout. See succeeding breakouts below.

Software and E-commerce names continue to attract strong bids. As do any business that thrives with the stay at home theme, like streaming and home goods. 

Growth star Twillio (TWLO, +18.5%), soared to a new high after giving an optimistic forecast for its business that providing of cloud-based communication tools and services for developers.

The market may garner new upside leadership. This would likely come from names on the screens produced here each week. 

SUCCEEDING BREAKOUTS

Here are some succeeding breakouts that met our strict fundamental criteria:

TickerCompany NameIndustry
APPSDigital Turbine, Inc.Internet Software/Services
BPMCBlueprint Medicines Corp.Biotechnology
BYNDBeyond Meat, Inc.Food: Major Diversified
CDNACareDx, Inc.Medical Specialties
COOPMr. Cooper Group, Inc.Finance/Rental/Leasing
DDOGDatadog Inc Class APackaged Software
FATEFate Therapeutics, Inc.Biotechnology
FVRRFiverr International Ltd.Data Processing Services
NVCRNovoCure Ltd.Medical Specialties
PTONPeloton Interactive, Inc. Class AOther Consumer Services
ROKURoku, Inc. Class AElectronics/Appliances
SGENSeattle Genetics, Inc.Biotechnology
TWSTTwist Bioscience Corp.Biotechnology
ZZillow Group, Inc. Class CInformation Technology Services

Keeping it real,

Dan