October 17, 2021

The Nasdaq printed an O'Neil follow-through day (FTD) on Thursday, +1.73% on increased turnover that was merely average in size. The session was tipped off by a number of growth issues showing strength on Wednesday.

Some FTDs occur as many stocks are ready to break out of consolidation patterns, some occur with only a few stocks ready to break out, and some occur with no stocks ready to lift off. This one comes with a relatively thin group of growth issues ready for take-off.

 

It would not be the worst thing in the world if the market came in here, as this would potentially provide some additional entries.

One thing to keep in mind is that we cannot expect the same gains as earlier in this bull market when inflation and bond yields were lower and the Fed was not so close to tapering its bond buying campaign. It is unlikely that institutions will want to storm right back into growth stocks given the situation with the Fed primarily, and rising inflation and bond yields secondarily.

This is manifested by a rather limited assortment of growth issues with the type of technicals and fundamentals we seek: rich earnings estimates and 40%+ sales growth. It appears there are fewer stocks of this ilk with each fresh market advance within the bull market.

With that said, we will always let the market show us the way forward.

The following three names are the most intriquing recent new issues and have ample liquidity. They are not actionable, and so there are no comments.

Dutch Bros (BROS) 

Taskus (TASK)

Toast (TOST)

The following names are believed to be the most attractive in the $13+ market for our strategy of speculation. Click to zoom in.

Some have earnings coming out soon. It will be up to each subscriber to determine whether it makes sense to take a partial or full position ahead of a report.

Asana (ASAN)

Atlassian (TEAM)

Bill.com Holdings (BILL)

 

Crowdstrike Holdings (CRWD)

Fortinet (FTNT)

Generac Holdings (GNRC)

Nvidia (NVDA)

Sea Limited (SE)

In sum, we began taking fresh money buys last week as the Nasdaq and S&P appear to have put their correction behind them. Seasonals favor continued upward revaluation.

Kevin Marder

Trading Lessons
Introduction to the service video (38:00)
Money management and risk management video (20:27)
Bread and butter pullback video (11:10)
Bread and butter pullback: Pt II video (15:09)
Bread and butter pullback: Pt III video (31:48)
Bread and butter pullback: Pt IV video (30:16)
System R
Short-selling video (25:53)