Cash remains king.
We have stayed cautious for four weeks. When the averages are in downtrends, they tend to pull everything down with them. As the saying goes, "When they raid the brothel, they usually get everyone, including the piano player."
This will be a short report, as there is very little to add to what the May 26 and May 29 reports covered. Since rallies in downtrends are preferred short-selling setups, we are unable to short this downdraft without some sort of rally to short into. Until then, we will be patient.
Long positions are not suggested. The following names are to be used in the event the averages show some firming, including an O'Neil follow-through day. Until then, stay safe.
Among the names, Appfolio (APPF) was discussed in Wednesday’s report (“The stock can be taken above the 5/17 high of 99.28”). The comment stands. Earnings expected Aug. 1 (unconfirmed).
Industrial Innovative Properties (IIPR) shows earnings estimates of 108%/38% for ‘19/’20 with triple-digit revenue growth for the past half-dozen quarters. In the most recent quarter, sequential revenue jumped 42%, possibly the highest I have seen. A 98 RS stock in an 80 RS group, the property REITs, with a C acc/dist rating.
It can be taken above the 93.24 high of its eight-week base. Earnings expected Aug. 7 (unconfirmed).
Mongodb (MDB) is expected to record losses for the January ‘20/’21 fiscal years. However, revenue growth accelerated in the past three quarters from 44% to 55% to 67% to 71%. A 99 RS stock in an 86 RS group with a B acc/dist rating.
Price forms a 10-week flat base with a 20% depth. A cheater entrance can be taken above the 148.00 high of 5/17. Alternatively, the 154.80 pattern high can be used. Earnings expected June 5 (confirmed).
NanoString Technologies (NSTG) will post losses in ‘19/’20 according to the Wall Street analysts that follow it. Revenue growth was -15% and 20% in the two recent quarters. A 98 RS stock in a 60 RS group with a B acc/dist rating.
The medical research interest builds a three-month, cup-with-handle base. The 12%-deep handle shows some volume dry-up, a plus. It is buyable on a takeout of the 29.29 handle high of 5/10. Earnings expected Aug. 8 (unconfirmed).
Novocure (NVCR) is expected to show earnings-per-share estimates of -$0.20/$0.53 for this year and next. Sales growth accelerated over the past two quarters, from 29% to 30% to 41%. A 95 RS stock in a 70 RS group with a B acc/dist rating.
NVCR forms a three-month cup with a 27% depth, which is reasonable. The RS line has shown a solid upward slope throughout this market correction. It would be preferable to see this title form a handle to go with its cup. Regardless, it can be taken above the 56.67 pattern high. Earnings expected Aug. 1 (unconfirmed).
Q2 Holdings (QTWO) is a financial software developer that shows earnings estimates of -50%/246% for ‘19/’20. Revenue has grown at 30% in each of the past two quarters. A 93 RS stock in a 94 RS group with a B- acc/dist rating.
The stock forms a five-week base with a solid upward slope to its RS line during the current general market weakness. As well, the line hits new highs well ahead of price, a positive. It can be taken above the 76.08 pattern high. Earnings expected Aug. 6 (unconfirmed).
Tandem Diabetes Care (TNDM) is predicted to show losses for ‘19/’20, though these are moving in the right direction (toward profitability). Revenue growth has been scorching, accelerating in the last three quarters from 60% to 71% to 89% to 142%. A 99 RS stock in a 70 RS group with a B acc/dist rating.
The stock can be taken above the 72.19 cheater entrance pivot. Alternatively, the 74.81 pattern high can be used for a pivot. Earnings expected July 30 (unconfirmed).
In sum, cash remains king.
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Unless otherwise noted, charts created using TradeStation. ©TradeStation Technologies, 2001-2019. All rights reserved.
The views contained herein represent those of Marder Investment Advisors Corp. At the time of this writing, of the stocks mentioned in this report, Marder Investment Advisors Corp., Kevin Marder, or an affiliate thereof held no positions, though positions are subject to change at any time and without notice. Estimate data provided by Thomson Reuters. Expected earnings release dates provided by EarningsWhispers.