Profiling Last Week’s Rally and Ten Stocks That May Continue Higher

According to Exodus, the median return for stocks last week, measured using 4,311 stocks in the system, was +3.49%.

Basic materials, in spite of the fact that many will soon be bankrupt, were up 2.44%.

Consumer goods rose by an impressive 3.36%.

Financials, representing $5.5 trillion in market capitalization, were higher by 2.26%.

Healthcare, spearheaded by the recently dreaded biotech sector, enjoyed a respite of  +4.43%.

Industrial goods, which have been at the epicenter of the recent decline, was up 3.31%.

Services, which entail autos, airlines and retail clothing shoppes, were up 3.87%.

Even the utilities were up 1.47%, despite it being used as a countermeasure to risk in the market place for the better half of 8 weeks.

Tech stood out with an outsized gain of 4.82%.

This was an all around impressive showing for the market, by far its best week of 2016.

Stocks with market caps above $1billion in market capitalization were higher by 3.63%, whereas the smaller cap varietal was up 3.26%–effectively narrowing the performance gap between large and small capped stocks that have beguiled investors for the better part of two years. One week doesn’t make a trend, however. But it’s important to note the participation of the riskier asset classes, which might precede a larger rally to come in equities.

Digging deeper along those lines, we’ve found that heavily shorted stocks, as defined by companies whose shares have more than 10% of their float sold short, rose by an impressive 5.26% last week, shattering the performance of those stocks with less than 10% of their shares sold short, which rose by just 2.79%.

By using the software bestowed upon the great masses of investors, thanks to Exodus, we can begin to paint a picture of where the money is going, with respect to stocks. Using very rudimentary screens, we can tell that money has flowed freely into larger capped tech and healthcare stocks, heavily shorted and most likely hated by the public, for the better part of the past week.

Providing this trend continues to progress forward, and possibly exacerbate with vigor to the upside, I am prepared to offer you a handful of names worth watching closely, which may break out to the upside in the days and weeks to come.

Here are some names that presently fit the profile of stocks on the verge, or in the process of, breaking out to the upside, using the criteria mentioned above.

FIT

BOX

AMBA

AVGO

SCTY

XON

ALNY

SGEN

BLUE

RARE

Granted, several of the stocks mentioned above are utterly useless companies, whose share prices have been ravaged in 2016 for good reason. But, it’s important to note that periods of excessive speculation are often accompanied by mindless asset allocation, whereby traders jump from one bad stock to the next in search of momentum.

If it was my money, I’d seclude myself to the TWDFM (these will definitely fuck me) cabal– which includes TWTR, WYNN, DB, FCX and M. One thing is for certain, this is the best set up for the bulls in months and possibly the most important since the grim days of 2011.

 

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