Ivanhoff Capital – Page 115

62 Stocks Doubled In 2018

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The market is still in a correction mode but plenty of stocks have had a good year. As of December 15, there are 62 that have more than doubled. If you study their charts, you will notice how the majority of them started their move with a huge-volume breakout to new 50-day highs.

We see quite a few enterprise software names on the list, which only comes to remind us to always pay attention to industry relative strength. It is a lot more sustainable catalyst than just company’s earnings: TWLO, TTD, OKTA, MDB, AYX, COUP. Most of these names continue to be among the strongest stocks currently in the market and are likely to outperform if the general market bounces.

There are also a few cannabis related stocks, which was one of the hottest industries in 2018: TLRY, NBEV.

As usual, the list is dominated by biotech, healthcare and medical research names which account for almost half of the big 2018 winners.

There are a couple turnaround stories in the retail space – CROX and FOSL. There were a lot cannabis-related earlier in the year, but the correction in the last two months has caused a lot of damage to the sector.

While the S&P 500 is down 11.2% from its 52-week highs, the 2018 Doubles are down on average 24.3% from their 52-week highs. Most of them offer multiple great long trading opportunities during their ascent. Now, quite a few of them are setting up on the short side. Some examples to consider: WWE, REGI, SSTI, AMRN,

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

Momentum Monday – Bear Flags Everywhere. What’s Next?

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As active market participants, we need to be prepared for different market scenarios. Here are the two most logical developments for the rest of the year:

$260 is the line in the sand for the S&P 500. It has been tested numerous times this year. Buyers have consistently stepped up to defend it. If SPY loses it, we will likely see another quick leg lower and 260 is likely to become a level of resistance. Since correlations between stocks are extremely high during corrections, no sector can really be a safe place.

The bullish short-term scenario is 260 holds and the market rallies on some type of unexpected news. Another variation of this scenario is an intraday break of 260 to lure short-sellers and then a strong rally and a close above it. If this happens, the two types of stocks that you would want to own on the long side are:

The ones that have held the best so far – enterprise software stocks like AYX, WDAY, OKTA, SPLK, TWLO, etc.
The ones that have been hit the worst – Chinese ADRs, high-momentum stocks that have correct 40-50% from their recent all-time highs like GRUB.

On this Momentum Monday, we also discussed the impact of the stock market on the economy and most specifically AAPL and LULU.

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

Another Gap Down. Enterprise Software Stocks Shine

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The major U.S. stock indexes opened with another gap this morning. Most stocks are off their lows, but this is hardly a reason to get excited.

The small-cap index, Russell 2000 broke below its October lows. The good news is that market breadth didn’t confirm the new lows. Plenty of stocks are holding a lot better than the market averages.

Enterprise software stocks stood out today and are shaping out to be the new old leaders.

OKTA beat estimates and guided higher. It opened near its 50dma and it recovered quickly. It was among the first stocks to not only go green but also trade above its Tuesday’s highs.

Last week, we saw SPLK and WDAY gapping up on stronger than expected earnings results. Both of them have consolidated through time (sideways) while the overall market has fallen. This is a notable relative strength.