The indexes continue to move along nicely, as we are close to 1,000 new 12-month highs. I'm finding, however, that the trading is increasingly chaotic and I'm dealing with more volatility.
Part of that is due to my stock selection and the news flow that is hitting them, but it is the sort of thing that happens as traders become more concerned about corrective action. There continues to be some big movers, but there are also some very sharp drops when there is a rush to protect some big gains.
One stock causing me some consternation is Triterras Fintech (TRIT) , which I mentioned Wednesday, following a buy recommendation and a target of $23. The stock was hit hard into the close, and Thursday morning in anticipation of a "short report" and some news. Market players were frightened by the uncertainty, and have "panic sold" the stock on Thursday. My feeling is that it is an overreaction and an analyst at B. Riley Securities has already reiterated its 'Buy' recommendation and $16 target and stated that he believes the "story remains intact" and that the shares are attractive at current levels.
Like many other stocks that have gone through the special purpose acquisition process, there are related party issues here, and that seems to be the main focus of the negative sentiment. The company has scheduled a business update on Jan. 5. So at this time, it is a battle group stock.
I'm also taking some hits on Horizon Therapeutics (HZNP) , which has some supply issues related to Covid and Aurinia Pharmaceuticals, which I discussed earlier. The gambling stocks like DraftKings (DKNG) and DMY Technology (DMYD) are helping out, but it has not been a great day.
It is the nature of trading to be caught by surprise and the most important thing is to just take it in stride the best you can. If you aren't suffering some setbacks along the way, then you probably aren't taking much risk and that means that you aren't producing superior performance. Risk and return go hand-in-hand and if you don't understand that, it makes the trading process much harder.
It is becoming increasingly more difficult to find new buys as this market keeps running but I'll keep on looking.