Stocks remain in a downtrend with precious few growth titles setting up in buyable patterns. This despite a 1% gain by the Nasdaq in Wednesday's session.
The market continues to be buffeted by the latest announcements regarding the U.S.-China trade talks. To illustrate the elevated risk faced by speculators, after Wednesday's close China announced it would be leaving the talks on Thursday - the same day the talks were to begin. The following Nasdaq future chart shows the news slamming the contract for a 1.5% loss before cooler heads prevailed. It was last down 1.0%.
Cash remains king. The following names are the most interesting from our Watch List of 17 titles. None are actionable given the averages being in a downtrend with virtually no recent growth-stock breakouts succeeding. Pivot points are noted for those very aggressive subscribers who feel a need for long exposure.
Coupa Software (COUP) forms a five-week mini double-bottom pattern as investors eye an estimated 138% earnings growth in the January ’21 fiscal year. Revenue growth is stout at 44% and 54% in the last two quarters.
COUP is one of the better growth actors, along with DOCU below, and can be monitored. It has one of the very best patterns in the growth sector. Its entry pivot is the pattern high of 156.16 for those who need long exposure in this market.
Docusign (DOCU) came public 17 months ago. This has been discussed in the videos as being one of the most intriguing names in the growth sector, if not the most intriguing. Earnings estimates are at 45%/150% for the January ‘20/’21 fiscal years. Revenue has grown at a stout 37% and 41% in the last two quarters. A 97 RS stock with an A+ acc/dis rating.
Monday, after consolidating for 13 months, the stock took out its handle high on +39% volume. As noted in the videos, the view here is that nothing has changed in the world of growth-stock breakouts. Until it does, it did not make sense to make DOCU a buy idea. The idea is that if the stock follows through post-breakout, it can potentially be entered on a pullback or other temporary weakness.
For those interested in buying DOCU, it sits 2% above its handle high, and is thus not extended. One to watch.
Franco Nevada (FNV) is a Canadian gold-centered royalty company. Earnings growth estimates are 33%/21% for ‘19/’20 and its acc/dis rating is C+.
The stock sets up in a five-week, mini double-bottom pattern. Such formations can be bought as price crosses the midpoint. However, the recent weakness of gold stocks leaves the pattern high as the preferred entrance pivot, not the cheater pivot of the pattern’s midpoint. Worth watching.
Royal Gold (RGLD) is another owner of royalty interests in precious metals and mines. Earnings growth is predicted to be 76%/-1% in the June ‘20/’21 fiscal years. It holds a B- acc/dis rating.
Like FNV above, the stock forms a five-week, mini double-bottom pattern with cheater entrance of 131.53, the midpoint of the formation. Alternatively, the 138.78 pattern high could be used as a standard pivot. This would be favored due to the reason given in the FNV discussion above.
In sum, cash is king. As in life, trading presents certain tests and challenges that largely define who we are. Let's continue to do our homework and stay on top of what is transpiring beneath the surface of the averages so that we are ready and prepared for anything that might come our way.
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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.