Yesterday's momentum continues but some profit-taking is starting to hit after the gap-up open. There are many similar charts right now with 'dead cat bounce' patterns that need some further consolidation before they can gain more momentum. As long as recent lows are not undercut, some mixed action is favorable as it sets the stage for a more aggressive push higher next week.
Chasing V-shaped moves has worked often in recent years but historically this is not a pattern to be trusted. There have been some shifts in market dynamics that have caused more V-shape moves, but typically the folks that catch a bottom tend to flip into strength, and shorts tend to reload, which causes a retest before momentum picks up again. It makes for a better foundation but it frustrates overanxious bulls that want straight-up moves.
There is some slowing in the cannabis sector this morning, and I have very few stocks trading at intraday highs currently. The best theme looks like gambling right now, with DraftKings (DKNG) continuing to push higher. My Stock of the Week, Golden Nugget Online Gaming (GNOG) , is trying to move over the 200-day.
I like some of the low-priced gaming names like Bragg Gaming (BRGGF) , Elys Game Technology (ELYS) , and Enthusiast Gaming (ENGMF) , but traders are still not very confident, and it is hard for the secondary speculative names to gain much traction.
Breadth is very strong with 6200 gainers to 1375 decliners, but the list of new 12-month highs and stocks up more than 10% is mediocre. This is a sign that momentum is not that strong, and traders are hesitant about chasing too much.
