As market participants look ahead to the holiday festivities, we have thin and random trading but an upbeat bias. Breadth is solid at around three gainers for every two losers, and there are now more new 12-month highs than lows. The shift in the number of new lows has been the tipoff that the badly beaten up biotechnology names, small-caps, and growth stocks are finally finding support and turning up.
We are in good shape for a continuation of the upside action next week, but it will be thin and sloppy. Trading at the end of the year often has more to do with positioning and tax matters than fundamentals or charts.
One notable group on my radar this morning is cannabis which is building on yesterday's reverse and bounce. This group has probably seen a high level of tax-related selling and seems to finally have been washed out. I'm long the MSOS ETF (MSOS) and will be looking harder at individual names after the first of the year. One thin name in the group that I continue to favor is urban-gro (UGRO) . It is an infrastructure play that doesn't 'touch the leaf,' so it isn't stuck with OTC listing.
I continue to like the action in IonQ (IONQ) . This was one of the better deSPACs in 2021, but I think a theme in the year ahead will be that a few quality deSPACs stand out. I will be discussing some of the key names next week.
If you are heading out early today, I wish you a Merry Christmas and Happy Holidays.
(Please note that due to factors including low market capitalization and/or insufficient public float, we consider UGRO to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.)