With the S&P 500 hovering at a new all-time high, we have some mixed action. The indices are holding up relatively well on strength in the Nasdaq 100 (QQQ) and FATMAAN names but breadth is running slightly negative with 3300 gainers to 3675 losers. The number of new 12-month highs is down to around 100 and speculative trading action continues to narrow. The list of 10% movers is down to around 20 on my screens and there isn't much trading at day highs.
I'm growing increasingly cautious but I'm still finding some stock picks that are working. My favorite SPAC play, Tortoise Acquisition (SHLL) , is moving well and one recent winner, Seres Therapeutics (MCRB) , is moving very nicely following a secondary offering.
In the cannabis sector, I've had two earnings winners in Trulieve Cannabis (TCNNF) and Green Thumb Industries (GTBIF) . Both are extended now and I'm waiting for new entry points to develop but the solid numbers there should keep a bid under the stocks.
I've added a third play today, GrowGeneration (GRWG) , which provides nursing and growing equipment that is used by cannabis cultivators as well as for ordinary gardening. Since it does not sell any actual cannabis it is qualified for listing on the Nasdaq. The company announced very strong earnings with revenue growth of 123%. I started a position this morning and will be looking to add. I suspect that the Covid-19 lockdown has been a positive for home gardeners and that this is a theme that is likely to continue.
There are still stock picks out there but it is becoming more difficult and I'm trying to be more selective. Any buys I'm making at this point are incremental and I'm leaving plenty of room to take advantage of pullbacks.
