Dear — Jeff Bishop here,
Last week, we saw a boatload of stocks continue to make new highs, and by the looks of it...
A continuation move higher still looks to be the more likely path.
That said, I'm expecting an abundance of opportunities to get long in our trading over the coming week.
Right now, some of the best money-makers are in small-caps, and since that's Jason Bond's bread and butter — I think it's important to learn from his number one trade ideas this week.
Not only will Jason be focused on small-cap stocks, but he'll also be focused on options trades as well — and I definitely want to see what he's got on his radar this week.
So make sure you secure your monthly access to Jason's number one trade ideas right here… before the deal gets pulled off the table.
Given it's the last day of the month tomorrow, and the start to the last month of 2020 this week, it's important to look for clues in the market.
In All-Access today, we'll share what the ETFs are telling us, as well as how to capitalize on stock breaking out on new highs.
To wrap up the short week last week all the main stock indices showed a lot of green.
SPY finished up 2.36%, QQQ up 2.97% and IWM advanced up 3.94%.
Both SPY and QQQ are hovering just under their all-time highs.
Here's a SPY chart:
Buyers are confidently in control and the internals seem to be screaming higher.
QQQ has been underperforming SPY in the past couple of weeks. Here's what the chart looks like:
Very similar story to SPY here: while the path of least resistance is higher, tech stocks just can't get enough traction to make a push higher.
IWM, on the other hand, still looks exceptionally strong:
The index refreshed new all-time highs last week.
From a macro perspective, one of the main dynamics to watch out for in the near future will be whether QQQ is going to be able to gain the upper hand over IWM once again.
Continuation of strength in tech stocks could potentially come from the worries that the vaccine distribution efforts are going to take longer than expected.
Work-from-home names like ZM and PTON, for example, showed resilience last week after the new restrictions on the economy started to emerge.
If that is the case, expect to see a rotation out of IWM and into QQQ.
Overall, the broader market action remains bullish and the main takeaway for traders is to focus on individual opportunities.
Tomorrow, we will be looking at some of the most interesting chart setups to watch in the upcoming week.
Stay tuned.
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At RagingBull, one of our favorite ways to make money as traders is keeping an eye on stocks setting new highs.
When a stock sets a new high, it can be a sign that a stock is ready for the next leg higher.
Right now, a lot of stocks are breaking out into new highs.
In fact, the Nasdaq and NYSE showed more stocks hitting new highs during the month of November than in any month since early 2018.
Small caps may have been the big winners over the recent weeks, but now even the big indexes are breaking out.
Currently, the XLC, XLK, and XLY all look like mountain peaks.
So how do we turn that information into a potentially profitable plan of action?
We start off by looking at the macro view and gradually boiling things down to individual stocks.
Let's start with XLK, the technology ETF— which has been lagging in some of the other sectors but is starting to show strength again.
From there, we can look at what specific industry groups within technology are showing strength.
Right now semiconductors are hitting all-time highs. The SMH ETF is on an absolute tear, in fact.
Finally, we can laser in on a specific stock within an industry group.
Within semiconductors, ADI is showing a strong setup. It's consolidating at near all-time highs and demonstrating a potential leg higher.
Breaking things down from sector to individual subgroup, to specific stocks is one helpful method of identifying individual opportunities that we can employ in our trading this week.
Check out these two other stocks that JC Parets is looking at, thanks to this approach.
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