8 Good-Looking Investments as Market Grows Nervous Over Microsoft
As Magnificent Seven names lose their mojo, I am looking at a flurry of little stocks and an investment with major outsized potential.
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Stocks are mixed on Tuesday morning as nervousness about upcoming earnings reports from Microsoft MSFT and other Magnificent Seven names takes hold. Nvidia NVDA, which was the most dominant stock in the market earlier this year, has lost its mojo and is trading down over 2.5% on the morning. It looks vulnerable down to $95, which is the gap that was formed when it announced its 10-for-one split.
While there has been a steady rotation out of the big-cap technology names in recent weeks, it is a bumpy process and when the indices are weak, it keeps some of the rotational buyers on the sidelines. Ideally, the Magnificent Seven name simply holds steady and drifts around rather than fall into a deeper correction. It is tough for smaller stocks to attract buyers when the media is focused on negative action in the indices.
I have a long list of smaller stocks that I like right now, but I’m focused on managing positions while the technical conditions improve and earnings reports are issued. Little stocks like ADMA biologics ADMA, Mereo BioPharm MREO, Xeris XERS, Sensus SRTS, Humacyte HUMA, Aris Water ARIS and Archrock AROC look good to me, both technically and fundamentally, but they are being jerked around by market conditions. I’m constantly adjusting my position sizes as I try to take advantage of the volatility.
I am also looking at slowly building a position in bitcoin using the IBIT ETF IBIT. There are some major political swings taking place with bitcoin, and in the longer run, it is going to make it a more important asset class that every money manager will likely have some exposure to.
I’ve never liked the fact that there is no way to value bitcoin and its utility is questionable, but ultimately its future will be determined by supply and demand and nothing else. The demand is building, and it is becoming more mainstream. A change in the SEC would likely be a major positive for it. I’m in no rush to build up a position, but I have it on the books and will be adding.
Intraday market action is poor for the second day in a row, with the S&P500 fading fast after a positive opening.
At the time of publication, DePorre was long ADMA, MREO, XERS, SRTS, HUMAS, ARIS, AROC and IBIT.
