The Last Two Stocks Ran +30% and +34%. What’s Next?

Happy Wednesday! Despite the negative headlines, which I have, and will continue to explicitly state, to ignore…we continue to make all time highs. When I think a large bearish drawdown is imminent, I will happily let you know. I’m excited for break 😅

You all provided a great list of stocks this week, I can tell many of you are getting stronger everyday. The top 3 stocks all had essentially every buy variable we could ask for.

I saw Roku and SharkNinja in your picks, 1st place and 3rd place respectively in prior Mid Week Mover episodes. Those have ran +30% and +34%. These were fantastic, and I wouldn’t bet against them (trend is friend), but when stocks have ran so much, it becomes more difficult to get into a winning position.

You can read through the ranking process below, or simply watch the 5 minute video.

Let’s get started…

All of these stocks are below the 200 day moving average. I immediately cut these. I cannot time bottoms. You cannot time bottoms (consistently). We do not need to be first, or get the best price…but we do need to see strength. Bullish trends usually last a lengthy amount of time. Some of these stocks like USAR, WAL and NKE are right at the moving average; so if these interest you, my personal opinion would be to just keep an eye on them for now.

Roku was the May 5th winner, and SharkNinja was a 3rd place winner, as mentioned earlier. And to be abundantly clear with all the stocks in this group: I WOULD NOT SHORT THEM. Trend is friend. The problem here is the inverse of the last place group: I cannot time tops. Nor can you. They have ran so much, that I have no idea if they have 5% more runway or 50% more runway. It is hard to get into a winning position, and then begin the guessing game of where the top is at. I like to have “runway” out of a consolidation so that I can lock a win…regardless how much it runs. These are just too parabolic for me, personally.

Also note, WELL 0.00%↑, this real estate invest trust company has went absolutely parabolic on the weekly chart. I have no idea where the top is at, and getting into a winning position I think will be difficult.

The price action has been forming lower highs and lower lows. It needs to get above $52 a share, for me to reconsider this stock.

Now we are getting into the 13 remaining stocks that all have decent charts. Normally, at this point I would start cutting stocks that have TERRIBLE fundamentals. But you all have picked up this trick from me, and there were none that were blatantly bad. Nice work! All of the remaining stocks have decent cash flow and EPS. Some had mixed results, but not enough reason to outright cut them from the list.

A weird way to eliminate stocks, from this list, is the total shares. Normally I prefer a high ratio of closely held shares to free float shares. I also prefer stocks that have a lower total amount of shares. So from here I eliminated SAIL 0.00%↑ (4.13B shares), CVE 0.00%↑ (1.84B shares) and WMB 0.00%↑ (1.22B shares). Less shares available makes it easier for stocks to have parabolic runs in supply squeezes, and of this particular list of stocks, the other 10 had total shares in the millions.

Just because I ranked a stock lower, does not mean it was “bad”. And any of these stocks could go up (or down!). I am simply ranking them next to each other, and figuring out what has the highest probability to go up NOW. I loved Roku a few weeks ago…I do not now. Tickers change. So do we.

Now we are getting into nitpicking with the final 9 stocks.

JBHT 0.00%↑ is being eliminated because on the 4hr time frame, I am seeing a distribution event. We are seeing heavy selling volume, with corresponding lower highs and lower lows. My speculation is this will turn into a trend. Thus it must be cut.

Since many of the remaining stocks look strong, both on the charts and fundamentally, now we will eliminate them based on relative strength. That is, which stocks have performed the weakest. Remember, we want momentum and trend on our side. Because so many of these are strong, I eliminated any stocks with RS below 70.

Weaker RS: WAB 0.00%↑ NMIH 0.00%↑ INSW 0.00%↑ VG 0.00%↑ and RYCEY (Rolls Royce).

These stocks are NOT bad….their trends are just are not as strong as the remaining 3.

If you have questions about any of these, or want to talk more, swing by the Main Chat during market hours, and I’ll be happy to discuss.

Now it gets difficult.

The remaining 3 checked essentially every variable I look for in a strong setup. Roku and SharkNinja looked very similar when they appeared here, as mentioned, they’ve since run +30% and +34%.