Tech Rotation, Bitcoin, Massive Moves And Some New Setups
Yesterday We Saw A Broadening Rally Within Risk On Themes
Very nice to see, and a good burst up in S&P 500 and the QQQ. And tech is starting to lead in a more significant way, we highlighted recently that we were approaching peak rotation trade, the analysis from two weeks ago is a free read.
And heading into this week we noticed a couple of things using TSF - Analytics.
Rotation Into Growth, Speculative Tech & IPOs
I showed you this in Sunday’s market analysis, we saw clear acceleration of relative strength in speculative growth and IPOs, these themes bid when risk on starts.
A subtle clue, but an important one.
Prior To Large Moves Assets Will Exhibit RS-Acceleration — Bitcoin
And when I designed the TSF - Analytics platform, I developed a method to capture this while making the signals meaningful and not noisy.
Bitcoin flashed as an improving group on the platform heading into this week, and improving groups are interesting because they are showing RS-acceleration, while still underperforming.
Which can be a sign of an early turn.
Here you can see bitcoin coming from lagging conditions and suddenly showing strong RS acceleration despite still underperforming, heading into this week.
And RS acceleration is not as easily visible by looking at an RS - line. Because you can have an asset that is underperforming but still showing RS acceleration.
RS-line steady downtrending until yesterday.
Not a bad move in bitcoin.
And we also saw the week prior, that crypto stocks were outperforming bitcoin, which is always interesting.
These things aren’t that easily visualized or noticed without a dedicated method to analyze relative strength.
Every Week TSF - Analytics Delivers A Thematic RS Analysis To The TSF - Community
Our overview page easily pinpoints which themes are leading, weakening, improving and lagging.
And improving themes are specially interesting, because they are showing early RS acceleration, while still underperforming, often a sign they might be bottoming.
This week we saw some standout groups that were improving.
Mega caps bursted up, software and fintech turned, bitcoin with the first real move up, miners bidding .
Strong information to have before the week starts.
Today We Are Going To Go Through This Weeks Focus Stocks
To see how they did and look for new entries. And in the end I have a couple of interesting new plays for you.
And like always, I won’t change the annotations unless it is setting up again for a new entry, to see how the scenario played out.
SGML
This was actually from last week, but we need to look at this move.
That was a hard catch, big move yesterday up 30%. And if we are going to hindsight trade it, it did put in a very tight inside day the day prior to the move, but it was under EMA 21, I wouldn’t have bought that.
But one to watch from here.
LAR
Solid setup, up 20% in three days and triggered the breakout, if you bought it good job. We will watch if it will build a small handle from here.
UAMY
Also solid move, almost 20% in two days, if you bought it good job. I think it might soon retrace some to backtest this level, we will watch it from here.
FORM
Always pay attention to a stock surfing the 10 SMA or EMA 21, it’s the hallmark of quality demand. And often you will see stocks surfing the moving averages prior to an acceleration of trend — a breakout.
Great move with followthrough.
I Bought VRT
Which was also one of this weeks setups.
It’s always a bit scary buying these setups when they go quick after the earnings gap. And there is no right or wrong, you just have to commit with defined risk.
But what made me buy it, is that VRT is a stock where the theme, the fundamentals and the chart are all aligning and leading.
And whenever a stock tests down and breaks out the same day, that breakout tends to stick. Because that last test down if bought, is a sign supply is depleted.
So far so good.