We have some melt-up action Tuesday morning as negative news is ignored, and FOMO takes hold.
The primary headlines are about interest rates rising as bonds weaken, a more hawkish Fed, and a stalemate between Russia and Ukraine. That doesn't seem to be news that would attract more market exposure, but the positive price action is sucking in cash off the sidelines. The thought process seems to be "What if this market keeps on running?" and "What if the bad news is already fully discounted?"
Breadth is running 3 to 1 positive. New highs are at 116 and new lows at 132. My list of stocks up more than 10% isn't that long, but it is solid and growing.
There is plenty of very good price action on my screens, although many stocks are up three or four days in a row and are technically extended. The FOMO is powerful and keeps things running.
One name I've mentioned quite frequently is Ondas Holdings (ONDS) . The company announced earnings today that were OK, but the story here is ongoing momentum. This is one of the few plays for industrial drones or, as I like to call it, Drones as a Service (DaaS). A division of Ondas is developing unmanned drones that will be used by oil companies and railroads to monitor oil fields. That is the gist of it, and the story is gaining some traction.
Another name I added this morning is Aehr Test Systems (AEHR) . This one was hot back in the fall as a supplier of test equipment for semiconductors used in EV manufacturing. The company has earnings coming up on March 31 but has announced some contract news and has a good backlog of business. For the fiscal year ending May 2023, the current EPS estimate is $0.69.
It is refreshing to see so many of the badly beaten up small-caps finally come to life, but it's a tad frothy now and tough to chase. The good news is that there should be solid support on pullbacks.
