Buy This $4 Stock Monday To Lock In 50% Profits

What a week – the markets sold off violently as the full scale of the inflation we've talked about threw a bucket of cold water on the speculative party that's been raging for months now.

Stocks managed to catch a bid on Thursday, but the gains were definitely not evenly spread around; the NASDAQ stayed more or less flat as the other indexes bounced nicely.

But that's the new normal; a permanent state of volatility, courtesy of millions of new retail traders.

Just to make it more interesting, there's a kind of "buyer's strike" going on. See, the market only rallies higher when buyers crowd out the sellers, but off and on for the past few weeks, buyers have periodically fled to the sidelines. Sometimes they don't even buy dips.

This spells trouble for the short-term trend. It spells trouble for tech, too, particularly the FAANGs.

But from where I'm standing, the picture is looking good. I've got to show you this chart – I see a technical situation unfolding here that's likely to send one small stock rocketing 50% or more.

Retail Is the New Tech Right Now

This is why, like I always say, it pays to look at technicals before fundamentals.

I've noticed a severe lack of volume on major exchange-traded funds (ETFs), and their largest component companies have begun dropping yet again, a very strong signal that that buyer's strike I mentioned is continuing through May.

Unfortunately, things are turning more and more dire, since the only volume we're seeing is on select selling surges.

Adding to the pressure, we're entering a more tepid part of the earnings season as the "headliner" companies are now finished dazzling Wall Street.

See, small-cap and retail companies will start to own the after-hours news cycle as the earnings focus shifts to this group.

The retail stocks have taken a break this week as some of the leaders like Gap Inc. (NYSE: GPS), American Eagle Outfitters Inc. (NYSE: AEO), Abercrombie & Fitch Co. (NYSE: ANF), Boot Barn Holdings Inc. (NYSE: BOOT), and others had some profit-taking over the last few days before buyers came poking around on Thursday.

1 2
View single page >> |

Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.