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)
Staar Surgical (STAA) has been a big winner in 2018 up over 161% year to date. The pullback here in an ugly tape has been rather orderly and volume is beginning to ease up. STAA gapped up over 20% on its last earnings release and price is now dipping back to retest that level but remains well above the gap, which comes in below 36.75. If the market can find its footing, and I believe it will soon, I’d look for STAA to come out of this channel to the upside and reclaim the earnings week high of 43.15. Wouldn’t surprise me at all to see this come to fruition in the form of a pocket pivot, with a quick reclaim of the weekly 10ma, as well. I believe it makes the most sense to see that candle (or candles) print before coming in long here. From a fundamental perspective, STAA checks all the boxes with triple digit earnings growth and strong double digit revenue growth, combined with forward estimates pointing to solid 2019 EPS of 23 cents from estimates of a penny this year. The medical products group remains top ranked and STAA also has the N in CANSLIM covered, as their new visual implant technology goes global.
Ollie’s Bargain Outlet (OLLI) has formed a 3 weeks tight pattern with prices closing last week on the weekly 10ma. OLLI has running mates in the A+ rated retail group with FIVE and DG also holding up well. General market weakness is likely the only reason OLLI hasn’t pulled off the hundy roll and this may very well be the last easy to manage opportunity to get on board while price remains in double digits. While sales growth comes in a little light, strong double digit EPS growth and recent relative strength has my attention here. Additionally, short interest comes in at 9% of the float with 7+ days to cover.
PagSeguro Digital (PAGS) “the SQ of Brazil” continues to flirt with a break above $30. There’s no 40 week MA here (38 weeks so far); but by my calculation price would be sitting right on it. Watch for the break above $30 and the 10 week MA to turn up to confirm that the lows in PAGS are in. I wrote more on the fundamentals of PAGS here and nothing has changed in that regard. It’s a monster in the 5 year EPS growth rate category at +133%. That piece came 4 weeks and 10% ago, but I still think the idea stands and this may actually present the potential safer entry.
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 does not own positions in any of the stocks mentioned at the time of this writing.