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Top One Percent Stocks – Feb 3rd

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I am continuing my weekly habit to post some interesting swing trade setups among the strongest stocks currently in the market. I look at the strongest 1-2% stocks. This means stocks having a relative strength rating of 99 or 98. I am interested in two major setups: a breakout, which I can buy intraday or an anticipation setup, which I can potentially buy the next day if it clears new 3-day high.

Here are a few anticipation setups for next week: GKOS, RARX, INSP, VCEL, and FN. As you can see, biotech stocks are dominating.

Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.

Momentum Monday – The New Trading Range

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When SPY broke below its 260-280 box two weeks ago, it entered into a downward spiral and quickly dropped to the low 230s. Few were prepared for a 10% fall in seven trading days. The oversold bounce came a bit later than expected by most but it was a powerful one. Those who bought the extreme weakness too early, are very motivated to sell when their break-even levels are reached. This is why bear markets characterize with monster rallies followed by powerful reversals.

What’s next?

SPY has most likely entered into another box and we will see range-bound trading in the next few weeks. That range could be 240 to 260, or 230 to 250. The smartest way to approach the new box is to play the ranges and stay away from breakouts and breakdowns because most of them are likely to fail on longer time frames.

In the last Momentum Monday for 2018, we covered enterprise software stocks like OKTA, TEAM, and WDAY; the coming competition between DIS and NFLX; the price action in SPY, AAPL, and others.

Happy New Year!
Check out my latest book: Swing Trading with Options – How to trade big trends for big profits.

A Few Recent IPOs that I am Watching

The IPO market is gradually coming back. After the huge run-ups in ACIA and TWLO, more companies are eager to go public. We may not be too far from seeing a really big fish filing for an IPO – Snapchat or Uber.

Based on current price action, the market is eager for new IPOs. Taking into account that all new companies offer only 10 to 20% of their float and thousands of funds compete to own a limited number of shares, it is not a big surprise that IPOs are a favorite trading vehicle for many traders.

Here are a few names that I am watching: NTNX, COTV, NH, PI, TPIC, LN, PTI, YRD, AVXS, AIRG, FLGT, etc.

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