The market is building on the bounce action from Tuesday, with small-cap and growth names leading the action again. Breadth is very strong at almost 4 to 1 positive but new 12-month highs are still quite low at around 150. The reason there aren't more new highs is that the lagging stocks are now leading while those that were at highs just a week or so ago are correcting.
I see some good bounce action in groups like cannabis that have been acting miserable for a while. Also, oil names are coming back, and traders are looking much harder for individual stocks that are finding support and starting to turn back up.
A good example of the sort of name I'm looking at is EMCORE (EMKR) which is a small specialized semiconductor company. It trended down starting in late June and finally bounced yesterday and is testing its 50-day simple moving average this morning on contract news from Raytheon (RTX) .
I also added to a couple of cannabis names - Curaleaf (CURLF) and TerrAscend (TRSSF) . The charts still look quite poor but there now appears to be some support that will provide a framework for the trade. Urban-gro (UGRO) , which I highlighted in a 'Shark Bite' yesterday, is acting well also.
Another new name I added this morning is ARLO Technologies (ARLO) . ARLO offers security cameras and has made some substantial operational changes that are putting it on track for excellent growth. Jim Cramer highlighted the stock on Mad Money last week, and it faded from $7 in the poor small-cap market. It has now found support, and I am looking to build a position into the upcoming earnings report.
I see much better stock picking and trading now. It started when the big selloff hit on Monday, and we may need some rest, but I like the looks of this action into earnings season.
Watch Real Money's Real Talk: Debating the Death of FAANG, Thursday, July 22, 2021 at 11:30 am E.T.
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