Don’t Be a Bull or a Bear. Be an Opportunist.
Ignore the bulls and bears and focus on short-term market opportunity. Here are nine stocks I like right now.
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There are two things we know for sure about the current market action — there has been some technical damage done to the charts recently, and volatility is elevated.
There is much speculation about whether this is the start of a protracted downtrend or just a short-lived glitch before the market resumes its uptrend. Strong opinions exist on both sides of the argument, which is why we are seeing increased volatility.
My view is that market predictions are useless. People like to pretend that they have some special insight, but no one in the history of the market has been able to call the short-term twists and turns with a high degree of accuracy. People make lucky calls quite often, but it is confused with skill or special insight. Just look at the high-level strategists who were so gloriously wrong about the market over the past few years.
My gut feeling is that the market is going to struggle for a while and that poor seasonality will make it very tough for a strong positive trend to emerge. We are seeing some big swings in either direction as folks try to figure out where things are going.
The Best Way to Trade This Market
The best way to deal with this sort of action isn’t to have a strong bullish or bearish view and act accordingly. The best way to deal with it is to stay open-minded and trade the volatility. That means using very short time frames and tight trade management.
This is a market where the best methodology is buying the dips and selling the rips. If you are aggressive and manage trades closely, you can do pretty well. Also, that sort of trading distracts you from the useless bull/bear debate. We don’t know where the market will be a month from now, but we know it is going to move around quite a bit while new trends and leadership emerge.
The optimal way to implement a short-term trading strategy in this market environment is to first have a list of stocks that you want to own in the long term. That is your trading inventory. There are lots of one-day wonders that will make giant moves in a couple of days, but that is a different sort of trading. What we want at this point are stocks that have solid fundamentals and potentially good charts that can morph into longer-term investments when market conditions shift.
Now is the time to take advantage of volatility. Whether there is a market bottom or not isn’t important. Focus on buying the dips and selling the rips in your favorite names, and then adjust that strategy as technical conditions improve.
Names I Like
Some of the names that I like longer term that I’m trading right now are Bitcoin IBIT, Bitcoin miners such as Core Scientific CORZ and Cipher Mining CIFR, Uber UBER, Nvidia NVDA, Palantir PLTR, Shift4 Payments FOUR, Xeris Biopharma XERS and Humacyte HUMA.
In this sort of market environment, I don’t want to be a bull or a bear. I want to be an opportunist.
At the time of publication, Rev Shark was long IBIT, CORZ, CIFR, UBER, NVDA, PLTR, FOUR, XERS and HUMA.
