After two days of big moves in the indices, we have some dull action Tuesday morning.
Breadth is poor at around 2,200 gainers to 5,400 decliners, but it is more disinterest than aggressive selling. While small-caps ( (IWM) ETF) are lagging, and everything crypto-related is being hit hard, the big problem is that there is no energy. On my scans of stocks with strong moves, there are only 16 that are up more than 10%.
Action like this sometimes leads to a "don't short a dull market" response. The buyers start to think that if the sellers can't create more pressure than this, then maybe it's a good idea to do some buying.
I'm focused on stock-picking as most of the action is uncorrelated. The indices are moving randomly, and individual stock action is where the opportunities seem to be.
I have added to Emcore Corp. (EMKR) , which produces mixed-signal devices that are used in aerospace and defense as well as for broadband. The company saw revenues jump 61% last quarter and is expecting EPS of $0.64 for the fiscal year ending September 2021. Cowen initiated the stock with an "outperform" and a $16 target on May 26.
What I like about EMKR at this point is that the chart is attractive, fundamentals are solid, and it is being added to the Russell 2000 at the market close on Friday.
I'm looking for similar plays but not seeing much. Another name on my radar is UiPath (PATH) seems to have found support in the high $60s and is now trying to turn up. There are quite a few high-beta growth names with similar patterns, but they aren't finding my sustained momentum so far.