Opening strength Friday morning has been met with steady selling in many of the small-cap stocks that have been leading recently. Breadth is still excellent at better than 2 to 1 positive, and over 750 stocks hit new 12-month highs, but it looks like traders are in the mood to lock in some gains as they finish up an excellent week for stock-picking.
The stocks that led Thursday are lagging badly Friday, but it doesn't look like there is any rush for the exits. It is just some profit-taking and cutting of exposure. I expect many of these names to set up quite well again after a bit of rest.
There is often an inclination to read too much into minor weakness after a good run. It is not only healthy but should be expected that stocks don't go straight up. It is necessary for those with a shorter-term time frame to exit and those with more optimism longer-term to step in. This sort of action is why I constantly preach to take partial profits into strength and then look for remounts lower.
I'm working on my shopping lists, and here are some names that I'll be looking to add: Aurinia Pharmaceuticals (AUPH) , HyreCar Inc. (HYRE) , Net Element (NETE) , Alto Ingredients (ALTO) , Xeris Pharmaceuticals (XERS) , Synchronoss Technologies (SNCR) , Gamida Cell (GMDA) , Hydrofarm Holdings (HYFM) , fuboTV (FUBO) , Firte Biosciences (FBRX) , Electrameccanica Vehicles Corp. (SOLO) , ANI Pharmaceuticals (ANIP) , New Providence Acquisition Corp. (NPA) , ReneSola (SOL) , Soliton (SOLY) , Lithium Americas (LAC) , Acacia Research (ACTG) , Longview Acquisition (LGVW) , Foley Trasimene Acquisition Corp. II (BFT) Esports Entertainment Group (GMBL) , Bragg Gaming Corp. (BRGGF) , GAN Ltd. (GAN) .
The best-looking sector on my screens continues to be cannabis, and I'm holding positions in Trulieve Cannabis (TCNNF) , AdvisorShares Pure US Cannabis ETF (MSOS) , Green Thumb Industries (GTBIF) Village Farms International (VFF) , Cresco Labs (CRLBF) , and several others.
The wild momentum Thursday was a lot more fun than the selling today, but this is the sort of action that should give us some good setups for next week. Study those charts and be ready to act as things develop.