The market suffered a hiccup Wednesday morning that triggered a quick drop down to where the S&P 500 closed on Friday. However, the dip buyers showed up quickly, and stocks regained their footing. Breadth is now slightly positive, and there are still plenty of names moving up more than 10%.
These bouts of volatility often occur when market players are growing a little too complacent. The market beast likes to remind us once of while who is in control of the action. When too many folks take the strong action for granted, these hiccups are a friendly reminder that conditions can change quickly.
Overall some downside action at this point is very healthy. The bears often are too quick to conclude that any weakness is the start of a significant top. That is usually just wishful thinking more than anything else.
Back on Dec. 18, I named five low-priced, small-cap stocks that were poised for significant gains in 2021. They have been doing well, and I want to provide some insight into how I am trading them.
Gamida Cell (GMDA)
Up 38%, GMDA announced significant positive news Tuesday night and traded sharply higher. Analysts raised their targets to the $25 to $27 area. There is no new immediately catalyst coming here, but I will look to rebuild my position as it fades on lower volume.
Xeris Pharmaceuticals (XERS)
Up 57%, XERS has had a strong run in the past two weeks and is a bit extended, but the story here is the likelihood of some news flow that can take it much higher. I sold some into strength and am a buyer on weakness.
Alto Ingredients (ALTO)
ALTO is up 39%. I call ALTO an ATM because it is such a great short-term trading vehicle. The company should post solid earnings, and the valuation is still quite attractive. I will continue to trade it aggressively and will be looking for positive action into earnings.
Bragg Gaming Group (BRGGF)
BRGGF is up 58%. This gambling play recently was listed on the Toronto exchange and is starting to garner more attention. I like the way it is developing and have added shares today. This story is still little know.
Nano Dimension (NNDM)
NNDM is up 128%. NNDM continues to power higher even though it has done a series of offerings. I'm growing a bit concerned about valuation and have cut my position back, but it is hard to argue with a chart this strong.
