Weekly Focus List

The following charts are weekly views with 10ma plotted. All will be the focus for new trades for the coming week and represent potential new initiations, positions that have already been established (but remain within buying range) or add on opportunities.

(Click any chart to enlarge)

Medpace Holdings Inc. (MEDP) has formed a cup base following an explosive gain on a 19 cent earnings surprise last quarter. Not only has MEDP digested the 30% pop on the report well, but the recent secondary offering priced at $55 was well received as the stock absorbed the supply and continued its march higher. Belonging to the #8 ranked industry group, MEDP is also a member of the 60/60 club demonstrating 60% eps growth and 60% sales growth last quarter (YOY). Digging deeper, MEDP saw nearly $240M in new business in the second quarter highlighted by broad based strength both within and outside of their specialty in oncology. No doubt the institutional demand is there, as evidenced by both the recent secondary, and the number of funds participating has increased to 273 from 148 this time a year ago. I’m already long here from 57.20s for 8%+ unrealized, but looking for an add on buy above recent highs and the $64 level.

 

I don’t go bottom fishing often, but when I do, this is the type of setup I’m looking for. PagSeguro Digital (PAGS) has been trading in this downtrending channel for 6+ months now. An attempt to break free on earnings failed and price fell back within the channel. Unable to hold the breakout, price was also unable to hold the 10 week moving average, which often acts as an important bench for entry/exit over an intermediate timeframe. Despite the weakness, the 10ma has now flattened out as price has consolidated and PAGS again attempted to work its way above 10ma resistance last week. PAGS belongs to an A rated group with SQ and GDOT as running mates. With forward estimates of +46% annual EPS growth and multiple consecutive quarters of triple digit sales growth, an explosive move out of this channel would not be surprising given nearly 14% of the float is short with nearly 4 days to cover.

 

Splunk Inc (SPLK) has formed an ascending triangle after a monster volume breakout and nearly 15% pop following last quarter’s earnings beat. Within the #11 ranked group, SPLK is looking to reclaim its leadership role following strong moves of late in group mates ATTU, MDB, DATA and AYX. Volume has eased up during the recent consolidation and the healthy action has set up a potential high handle breakout entry above 130. Alternatively, SPLK remains in buying range just 3% above the 121.64 cup base breakout. With consistent sales growth between 34-39% and estimates for nearly double EPS growth next year (and climbing), the fundamentals here are solid. In the same group, NEWR looks to be setting up a cup base and is now back above the 10 week moving average, as well. With nearly 50% of a stock’s move related to its sector and industry group, keep a close eye on this software group for continued strength in the coming weeks.

 

Cronos group (CRON) is easy to manage here on the dip. It has fallen back near the pivot on the weekly chart and the 21ema on the daily chart (not shown) sits just below at 10.13. This idea is for the gunslingers and I’m not going to bother to go into the numbers, as I do not want to lead anyone to believe there’s an investment thesis here. This is speculation in its purest form, along with a sprinkle of euphoria. I’m not looking to overstay my welcome if I do decide to jump into the fray. Don’t mistake my view here with CRON as not buying into the longer term prospects with medical marijuana and its therapeutic uses and benefits. I simply view other names “in the weeds” as significantly better positioned. However, CRON is the name on my radar that presents significant short term upside if the rally continues, while offering a clear and tight exit if the high wears off.

A few other ideas include 3 weeks tight setups in NSP, VNOM and CYBR; as well as a base on base setup in previous focus list highlight ECHO.

Disclaimer: None of the presented content represents individual investment advice to buy or sell securities and the information provided is solely for informational, educational and entertainment purposes. Author has a long position in MEDP at the time of this writing.