The following charts are weekly views with 10ma and 40ma 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)
Roku Inc (ROKU) remains my largest holding at 15% size and given how well it’s held up during the recent market decline, I’m feeling like I don’t own enough into the 4th quarter. This position is also the reason I chose to hedge with SQQQ during the recent market decline rather than moving to all cash. While the weekly 10ma didn’t hold, horizontal support at the prior breakout provided support late last week. I’m in good company here as institutional sponsorship has increased to 231 funds from 100 a year ago. I’ve discussed previously how ROKU turned a profit last quarter on +106% sales growth and forward estimates continue to rise. Don’t be surprised if I increase my holdings here one more time on this pullback and ride ROKU as my largest position into 2019.
Genomic Health Inc. (GHDX) has barely blinked over the past few weeks. GHDX printed six consecutive up weeks following the 3 weeks tight breakout in mid-August before pulling back with the major averages of late. Bouncing off support last week at the weekly 10ma, prices now look ready to come out of the flag pattern and continue the charge higher. GHDX has posted four consecutive quarters of triple digit EPS growth while sales growth is picking up with 10-12% over the last two quarters. While the sales growth is a little light for my preference, rising estimates for EPS growth of +60% for 2019 is hard to ignore. Group mates STAA and TNDM got hit harder than GHDX, but the group RS remains one of the strongest in the markets. Risk is easy to manage here benched against a close below the weekly 10ma.
It seems every couple weeks I’m writing about Match Group (MTCH) and it continues to hold up very well. One had to be very brave to buy the retest while the major averages were deep in the red, but MTCH has now reclaimed the weekly 10ma and that would serve as the risk management guide on a new entry. I wrote about the fundamentals here and nothing has changed in that regard. Perhaps the next entry is the one that will stick as I’ve been in and out of MTCH several times this year. Of interest, the short float here has grown to 50% with nearly 10 days to cover. Those are the type of numbers that can provide a lot of fuel for a next leg up with a market that cooperates.
I3 Verticals (IIIV) is another stock that has held up relatively well. IIIV found support at the weekly 10ma and is looking to bounce following a pivot retest. The stock is showing notable relative strength. Group leader SQ got hit hard late last week, but IIIV held its own and posted a strong recovery on Friday. Sales growth ranges from +24% to +38% over the past year and forward EPS growth estimates are up to +43%. Risk is easily managed using the 10ma and prior pivot as an exit, but sizing here is important as the stock does trade thin and IPOs have a tendency to be more volatile by nature.
I’m not going to post the charts, but as a group the cannabis stocks look great. CGC, CRON, TLRY and ACBFF are a few of the better looking charts.
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 is long ROKU and CGC at the time of this writing.