An Update on My Names as the Market Becomes Ideal for Stock Pickers

There was some hesitation near the open, but a solid earnings report from Tesla TSLA is fueling a bounce back from Wednesday’s poor action. 

It isn’t that strong of a bounce so far, with breadth running 5,500 gainers to 3,500 decliners, but what it lacks in vigor is being made up for by some very good pockets of strength.

The most interesting developments in the market in recent weeks have been broader action outside of the Magnificent Seven and better small-cap action. When small-cap action improves, it rewards traders who focus on stock picking. The market is much more likely to reward investors who can find stocks with a combination of good fundamentals and technicals.

Here are a few names that I’ve discussed in the past that are standing out today:

Viking Therapeutics VKTX posted earnings on Wednesday night, but the important thing here is that management continues to indicate that it is on track to be the best in class for obesity drugs. The company will have some additional data in early November but has strongly indicated that it is on track to perform. Viking has long been seen as a potential takeover target, and that talk should heat up as it continues to show how it compares favorably to the competition.

Xeris XERS is a stock that has had tremendous promise but has never seemed to gain traction. The stock is finally starting to see better technical action and has been trending higher since May. It is now testing the highs hit back in February. The company should post a solid report in November, but the kicker here is that it is developing a drug in a billion-dollar market and also has the potential for a licensing deal for its technology. Valuation is very good, and the market is finally starting to appreciate it.

Core Scientific CORZ is breaking to new highs and has had several target increases from analysts. It is my top play in the bitcoin area as it also has the advantage of being well ahead of other bitcoin miners in the high-powered computing (HPC) area.

Uber UBER is being punished again because Tesla made some comments about testing its robotaxi technology next year. UBER has many competitive advantages and is diversified into other areas as well. The selling on Tesla news has consistently been a good opportunity. Earnings are on October 31, and I expect the stock to see some opportunistic buying in front of the news. The stock is filling a gap on the chart on Thursday and is at a good entry point, in my view.

I’d like to find some new names but, so far, I haven’t seen much. When small caps start to report in about two weeks, there should be some standouts who may become new leaders.

At the time of publication, DePorre was long VKTX, XERS, CORZ and UBER.