Yesterday's Worries Are Totally Forgotten

 | Nov 16, 2017 | 10:42 AM EST
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Stock quotes in this article:

wmt

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amzn

,

wuba

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baba

,

yy

,

wb

,

ichr

The worries of the last week or so are totally forgotten Thursday morning. Breadth is a very robust 3-1 positive and Walmart (WMT) is leading retailers higher. The FAANG names are doing well again, and Amazon (AMZN) is acting like WMT is not taking any of its market share.

Once again, bulls are faced with trying to put capital back to work. A little bit of caution is one of the easiest ways to end up lagging benchmark indices. Hedge funds used to produce substantial outperformance by profiting in weaker markets, but they seldom have that opportunity now.

My Stock of the Week, 58.com (WUBA) is back on track after a sharp dip on Wednesday. That is a good example of how easy it can be if your set stops are normal areas of support. After triggering stops when it broke under $70 yesterday, it has gone straight back up to $74.

China stocks in general are doing well, with Alibaba (BABA) , YY (YY) , Weibo (WB) and others exhibiting good relative strength.

I tend to focus on momentum more than value, but one stock I find to be very undervalued right now is Ichor Holdings (ICHR) . ICHR reported a very solid quarter and expects to earn $2.47 this year and $3.38 in 2018, which is 37% eps growth. It trades with a trailing PE of just 12. Cowen has a $40 target on the stock, and analysts are optimistic about a recent acquisition. It trades thinly and can be volatile, but these numbers should offer strong support.

I'm working hard to put more cash to work, but it is not easy. Some corrective action would be helpful, but the market doesn't seem to want to offer any pullbacks.

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