Why Meme Stock Trading Is a Positive for This Market
The latest celebration may be already losing traction, but here's why it's been beneficial overall.
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Stocks quickly recovered from a PPI report that looked hotter than expected, but there were revisions to prior months that offset some of those concerns. The market is trading mixed as it awaits the CPI report on Wednesday morning.
Jerome Powell spoke on Tuesday morning and said, “We’re just going to have to see where the inflation data fall out.” In other words, the Fed really doesn’t know what it is going to do at this point, which makes upcoming economic news like the CPI even more important.
After much celebration over meme trading on Monday, it is already starting to lose traction. At midday, there are no major meme names trading at highs, and there hasn’t been much expansion into new names. I see Funko FNKO on the meme scan, and my old favorite, Humacyte HUMA, seems to be trading like a meme stock now, too.
Although the major indexes have only minor games, there continues to be strong action in small-caps. The meme trading helps speculative sentiment and makes traders more willing to buy smaller stocks that they like fundamentally. My small-cap favorites like Sensus Healthcare SRTS, which, I discussed in detail Monday, ADMA Biologics ADMA, and Humacyte are making entries more difficult, which is a good sign.
I don’t want to make any big moves in front of CPI, but I’m thinking that we are going to have a window now where "buy the dip" is finally going to work better for small-caps than the well-known big-cap technology names.
TG Therapeutics TGTX was a Shark Technical Buy this morning and is moving well. There are some big targets on that name.
I like this market quite a bit with the meme action and improved trading in small-caps, but it is very important to stay disciplined, lock in gains, and not chase too much.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider several names mentioned in this article to be a small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
At the time of publication, Rev Shark was long HUMA, SRTS, ADMA, FNKO and TGTX.
