The new year is starting with some very choppy action as algorithms and positioning dominate the early action. Market participants are still dealing with the end-of-the-year reverberations and the trading action that has little to do with valuations or fundamentals.
Breadth is positive with around 4600 gainers to 3275 decliners, and there are around 155 stocks at new 12-month highs. Small-caps (IWM) and growth names (ARKK) are leading. Strength in Tesla (TSLA) is helping the FATMAAN names, but the S&P 500 and DJIA are lagging with smaller gains so far.
This is very tricky action as aggressive traders are looking for the stocks that were weakest at the end of the year to start to bounce. Some of them have strong fundamentals, but many don't, so it's a stock picker's environment.
Some of my favorite names right now are Ford (F) , Alto Ingredients (ALTO) , Xeris Biopharma Holdings (XERS) , Urban-Gro (UGRO) , IonQ (IONQ) , and Myovant Sciences (MYOV) , but this is a random action, and I expect to see higher levels of volatility. There are plenty of interesting stocks that are going to offer opportunities as we shake off the new year jitters, but it will require some patience.
(Ford is a holding in the Action Alerts PLUS member club. Want to be alerted before AAP buys or sells F? Learn more now.)
