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  1. Home
  2. / Investing
  3. / Stocks

Secondary Names Get a Look as Rotation Takes Place

Traders continue to hunt for good action as the gap narrows between extended big-cap stocks and beat-down smaller names.
By JAMES "REV SHARK" DEPORRE
Sep 27, 2021 | 11:04 AM EDT
Stocks quotes in this article: IWM, DMYI, POWW, XERS

We have some rotational action hitting Monday morning with all of the FATMAAN names trading in the red while breadth is running about 5 to 3 positive, and the Russell 2000 (IWM) is up around 1.3%. Stock pickers are hard at work and looking at the secondary names that have lagged since February.

What we are seeing is a closing of the gap between some of the most extended big-caps and rotation into the beaten-up secondary names. The gap has grown very wide, but it has been narrowing for a few weeks now.

I'm focused on stock picking, as many of my favorites are doing well. On Friday, I discussed why I was buying dMY Technology Group, Inc. III (DMYI) . I have named it my Stock of the Week, and it continues to perform extremely well. Long-time favorite Ammo, Inc. (POWW) announced an increase in revenue guidance for the third quarter, and Xeris Pharmaceuticals (XERS) is up due to a recall of a competitive product.

Traders continue to hunt for good action, and I expect to see more strength in secondary stocks as we head into earnings season. I'll be looking for more buys as the day progresses.

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At the time of publication, Rev shark was long DMYI, POWW and XERS.

TAGS: Indexes | Investing | Markets | Small Cap | Stocks | Trading | U.S. Equity

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