Starting this past Monday, small-caps and growth names exhibited some very good relative strength. It has been a very energetic bounce, and many stocks have jumped off support, but now it's time for some rest and consolidation.
The indices are mixed with a slight positive bias, but the Russell 2000 (IWM) is down 1%, and breadth is running 3250 gainers to 4000 decliners. The pockets of momentum have narrowed again, and quite a few names that are on my radar are drifting back down.
The question to ponder is whether we just had a very energetic 'dead cat' bounce, and now we are in for a retest of some lows, or is this a pause that refreshes before there is another push higher?
I have a bias toward optimism and am just looking for some mild pullbacks to create another round of setups as we head into more earnings news. I'll be picking at some names, but mostly I plan on being patient while stocks rest and find their support levels.
There are plenty of small-caps that have finally bounced and are now consolidating. A few I'm watching are TaskUs (TASK) , Quantum-Si (QSI) , ASLAN Pharmaceuticals (ASLN) , AMMO (POWW) , Aurinia Pharmaceuticals (AUPH) , Elys Game Technology (ELYS) , EMCORE (EMKR) , Performant Financial (PFMT) , Arlo Technologies (ARLO) , and Forte Biosciences (FBRX) .
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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