5 Stocks With Relative Strength Right Now
Semiconductors are leading a bounce, but this is not a market that can be trusted.
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Intel (INTC) is leading a bounce in semiconductors (SMH) Monday morning and the Nasdaq 100 (QQQ) is trading up about 1.6%, but this is a difficult bounce to trust. A lot of folks were trapped in the sharp selloff on Friday and many will be looking for an opportunity to reduce some exposure into strength.
The issue for many traders isn’t whether a market top is forming, but reducing risk just in case. The market is unlikely to run away to the upside and it is better to be positioned with some cash to take advantage of opportunities that develop due to increased volatility.
The SpaceX IPO is going to be a significant event and the smart move is to be ready to trade the reaction to it rather than try to anticipate what the response might be. I expect major swings and I want to be ready to catch some short-term moves. High cash levels and flexibility are the important things rather than useless predictions.
Five Names With Relative Strength
Some of the best-looking names on my screens right now include The Oncology Institute (TOI). I highlighted TOI after its earnings report when it was around $4 and it is now up about 35% to $5.40. I think it can continue higher and will be looking to add to my position.
National Energy Services Reunited (NESR) is an oil services company based in the Middle East. It is positioned to benefit greatly from infrastructure rebuilding once the Iran situation stabilizes. It is riding its 50-day simple moving average and has good support.
I reduced Roku (ROKU) the other day when it pulled back, but it is finding support and building a high level base. I’ll be looking to add shares as market conditions improve. It is a good big-cap alternative to the technology sector.
Xeris Biopharma (XERS) is exhibiting some relative strength while the market was hit hard the last few days. That is a good indication of solid support and there should be some news flow coming up during the second-quarter report.
Glass House Brands (GLASF) is my cannabis play. It broke out on Friday and I’m looking for opportunities to increase my stake. It is a bit extended here but the valuation is solid.
Strategy
The key to this market right now is finding the right sectors and using the right time frames. You can’t approach this market the same way you did a few weeks ago. You need to play tight defense and be selective with buys.
Most of the things I’m interested in buying are exhibiting relative strength in the poor market action.
At the time of publication, Rev Shark was long TOI, NESR, ROKU, XERS and GLASF.
