We're seeing some selling into the gap-up open and limited momentum at midmorning Monday, but breadth remains about 2-to-1 positive. The action is choppy, and the main theme so far seems to involve an underlying rotation. The FAANG names are acting fairly well and there's finally a good bounce in banks and financials, but biotechnology, the oil sector and non-FAANG techs are a mixed bag.
What's been tricky about the market recently is that any pockets of momentum have failed to sustain. For example, biotechs and oil will do well one day, but then they'll stumble and some other group will start to lead. So far, it's the banks that are really helping the market the most this Monday.
One group that's on my radar screen -- some of the Chinese names that were high-fliers in May and June. I'm talking Baozun (BZUN) , Huya (HUYA) , iQIYI (IQ) , Sogou (SOGO) and Bilibili (BILI) . (Bilibili is my Stock of the Week.)
I discussed these names quite a bit when they were going parabolic, but they've been hit very hard over the past month as the Chinese market in general has come under severe pressure.
Another group I'm interested are the small oil stocks. I like this market segment the best right now for sustained momentum. I'm sticking with W&T Offshore (WTI) and Precision Drilling (PDS) and will be looking to add to names like Solaris Oilfield Infrastructure (SOI) .
