Expert technical analysis of financial markets by JC Parets
From the desk of Steve Strazza @Sstrazza
Monday night we held our July Mid-Month Conference Call, which ASC Premium Members can review here.
In this post, we’ll summarize the call by highlighting five of the most important charts and/or themes we covered, along with commentary on each.
Let’s get right into it!
The largest insider transaction on today’s Hot List is a Form 4 filing by Nimish P. Shah, who reported an additional purchase of roughly $1.4 million of Tricida $TCDA.
The only 13D on our list today was filed by Baker Bros Advisors LP.
From the desk of Steve Strazza @Sstrazza
Welcome to the 2 to 100 Club.
As many of you know, something we’ve been working on internally is using various bottom-up tools and scans to complement our top-down approach. It’s really been working for us!
One way we’re doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn’t just end there.
We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.
Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey to becoming the market behemoths they are today.
When you look at the stocks in our table, you’ll notice we’re only focused on Technology and Growth industry groups such as Software, Semiconductors, Online Retail, Solar, etc.
Then, like any good technician, we filter the list down to those closest to new highs.
This allows the cream of these strong groups to rise to the top and helps streamline our mission to identify technical breakouts in the top-performing stocks.
This is the video recording of our July 20, 2022, Inside Scoop Weekly Strategy Session.
From the desk of Steve Strazza @Sstrazza
US equity markets have stabilized since June as macro headwinds have abated.
This has brought on more bullish chart setups and a longer list of new highs.
While it’s nothing to get too excited about yet, it’s definitely a departure from the environment we’d been in.
Today, we’ll cover a stock that recently joined the Hot List and looks ready to join the new 52-week highs list next.
There’s been a noticeable lack of Hot List activity, as insiders seem to be sitting out the latest rally.
Today is no different, as we have a single Form 4 and one 13G.
Warren Buffett filed his latest Form 4 yesterday, as Berkshire Hathaway $BRK continues to accumulate shares of Occidental Petroleum $OXY.
The additional 1.94 million shares leaves him with an ownership percentage just shy of 20%.
From the desk of Steve Strazza @sstrazza
This is one of our favorite bottom-up scans: Follow the Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish, but not both.
We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients.
Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.
We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.
What remains is a list of stocks that large financial institutions are putting big money behind.
And they’re doing so for one reason only: because they think the stock is about to move in their direction and make them a pretty penny.
Then we flip through our list of stocks flashing unusual activity and pick the best setups using many of the same technical filters we do for our other scans.
And, just like that, we’ll follow the money flow and fatten our own pockets along with some of the world’s most powerful financial institutions.
