In some market the best approach is to trade the indices, and in some markets the best approach is to trade individual stocks. The current market favors stock pickers. The indices have been trading flat with a positive bias. The S&P 500 has been in a seven point range for four days now.
When the indices are acting like this the focus turns to individual stocks that are moving and offer opportunity. There are good pockets of momentum as well as some January effect plays developing.
This morning I bought both Amarin (AMRN) and Minerva Neurosciences (NERV) on negative news and both have bounced well. January effect plays SmileDirect (SDC) and Twitter (TWTR) are showing some life. Momentum plays Enphase (ENPH) , Ping Identity (PING) , Axsome Therapeutics (AXSM) , and Recro Pharma (REPH) are strong.
The indices may be comatose but there is some very good trading in individual stocks. Don't let anticipatory bearishness prevent you from looking for strong action. Focus on the trees, not the forest.
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That's because inertia is your biggest enemy, tricking you into thinking it's easier to wait for your 'good stocks' to stop sinking and eventually bounce back.
Despite Monday's sharp selloff, the evidence seems to point a modest market pullback after reaching absurd overbought conditions.
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