Meta and Chips Cover Up Market Weakness
Here are a few names I’m watching closely as we work through this difficult period.
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Higher oil and lower bonds are putting pressure on the market again on Wednesday. However, strength in Meta Platforms (META), Tesla (TSLA), some semiconductors and oil are helping to hold the Nasdaq 100 near flat while the DJIA and the Russell 2000 are lagging with losses of around 0.7%.
Most notably, breadth is poor again at around 35% gainers and there are 150 new lows to about 50 new highs. It is poor price action and it is being covered up to some extent by a small number of bigger caps.
Watch the Close
It will be particularly interesting to see how we close on Wednesday. Weak closes are the hallmarks of a market under pressure. The conventional wisdom is that smart money institutions make their moves at the close, and if they are liquidating we will see it then.
Few Entries That Make Sense
This action doesn’t offer much opportunity. There are stocks that I want to buy but there is no reason to believe that they won’t go lower while the broad market struggles.
A good example is Amazon (AMZN), which I discussed on Tuesday. It is down around 2% on Wednesday as the hyperscalers react negatively to Muse, the new personal AI agent from Meta that handles shopping and other tasks on the user’s behalf. There is no clear support on the Amazon chart and it can easily fall further into that gap. I added a small amount and will continue to monitor it closely.
NeoVolta (NEOV), which I’ve discussed several times, continues to act well. It has some upcoming news flow so it is likely to remain volatile. I like the way it is developing and am actively trading it.
One name I did add to on Wednesday is National Energy Services Reunited (NESR), which is my Saudi oil and gas infrastructure play. I like the way that the chart is developing, and even if oil prices were to drop, the need for infrastructure will remain high.
Xeris Lays Out the Long Game
Long-time favorite Xeris Biopharma (XERS) is holding a webinar on Wednesday on its XP-8121 development program for treatment of hypothyroidism. CEO John Shannon stated, “With a well-established unmet need, and a differentiated product profile, we believe that XP-8121 could reach $1 (billion) to $3 billion in peak net revenue, cementing Xeris as a leading biopharmaceutical company.”
It will be several years before the product reaches the market, but the key here is whether analysts start to update their estimates. Once $1 billion to $3 billion in revenue starts to show up in the estimates, the target price will rise substantially.
Game Plan
I’m mainly just watching positions. My cash levels give me plenty of flexibility and I’m making a conscious decision to stay patient and wait for better technical action before I make any major buys.
At the time of publication, DePorre was long AMZN, NEOV, XERS and NESR.
