The early action Monday is mixed, but breadth is improving as a rotation back into small-caps ( (IWM) ETF) is gaining some steam.
Last Thursday and Friday, the indices and big-cap names were in control after small-caps finally bounced, but there is much better action in the more speculative names Monday. It probably doesn't hurt that cryptocurrencies are on fire and seeing some of their biggest daily moves in a long time.
Breadth is now running about 3 to 2 positive, but new 12-month highs are only at 265 since it is the beaten-down small-caps that are outperforming rather than big-caps, which are hovering near highs. There is still weakness in groups such as biotechnology and cannabis, but I see better action in quite a few smaller stocks that have been languishing.
My Stock of the Week is Arlo Technologies (ARLO) , which makes security cameras abut is moving aggressively into the cloud and SaaS.
I added to last week's Stock of the Week, Performant Financial (PFMT) , which is moving from debt collection to auditing of medical billing.
Elys Game Technology (ELYS) has a "buy" recommendation and a $10 target from Maxim this morning, and I'm looking for additional entries.
Emcore (EMKR) , a small chip name, is also on my radar. The company will report earnings on Aug. 5.
There are quite a few stocks developing nicely. There is a huge disparity between very extended big-caps and some very beaten-down small-caps. If this rotation picks up more steam, the small guys have plenty of potential upside.
