Looking for New Stock Picks With Relative Strength
These four names are holding up very well in a poor market environment.
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The market action started poorly Wednesday morning, but softer than expected. Prices paid in the ISM-Services report spiked the market sharply. According to the Institution for Supply Management, "The Prices Index reflected its lowest reading since March 2020, when the index registered 50.4 percent; however, respondents indicated that even with some prices stabilizing, inflation is still a concern."
This report is a bit of relief to the market, which has recently seen several inflationary data points. However, none of these reports will matter much once Fed Chair Jerome Powell starts speaking around midday.
Market players will be looking for any hint about whether there has been a shift in the forecast of three rate cuts this one. One Fed member — Raphael Bostic — said this morning he only expects one cut this year, in the fourth quarter.
The jobs report on Friday will be extremely important, and after some hot ADP data Wednesday morning, there will be concern about an upside surprise.
The market is temporarily breathing a sigh of relief while it awaits Powell.
I have quite a bit of idle cash and have been looking to put some of it to work. I'm focusing on names that have strong relative strength right now. The logic is that if these stocks can hold up when there is broad pressure, then they are likely to continue to outperform when market conditions improve.
Two names I've added are bigger caps. Uber UBER, the ride-share stock, bounced off its 50-day simple moving average on Tuesday and recently had a price target increase to $97 from Truist.
On Monday, I highlighted ACM Research ACMR. The stock has hardly hiccupped due to weak market action and may benefit from increased optimism about the economic situation in China. I added shares and will be more aggressive if it continues to act like this.
A third stock I'm adding is LifeMD LFMD. The stock ran up to $12 following a strong quarter and a number of target increases. It has now pulled back to a little under $10, and I'm going to start adding back some shares that I have sold.
Inozyme Pharma INZY is a small biotechnology company that is scheduled to release important data on April 8 next week. I'm looking for positive anticipation in front of the news and have been actively trading it.
At the time of publication, Rev Shark was long UBER, ACMR, LFMD and INZY.
