Moving Into Position on 6 Names Ahead of Major News Events
Opening strength was sold on Tuesday as investors prepared for important economic news and the SpaceX IPO. President Trump is again hinting at an Iran deal in the next several days, which has pushed oil lower and is helping bonds, but the CPI report that is due on Wednesday will be a market mover regardless of oil or Iran.
This is obviously a nervous market, which will lead to increased volatility when news events hit. I want to make sure I have plenty of cash on hand to take advantage of the swings, so I carefully review every one of my positions and consider reducing my risk exposure, especially on larger positions. I can always buy back what I sold, and in most cases, I’m not fearful that a good stock is going to run away from me, even if there is a positive reaction to news.
Where I See Relative Strength
My base case is that we will see some sell-the-news action, especially in technology names on CPI and the SpaceX IPO. My technology exposure is already limited and I like the relative strength I’m seeing in many of my biotechnology names such as Delcath ($DCTH), TG Therapeutics ($TGTX), and Xeris Biopharma ($XERS).
A couple of other names with some relative strength that I have added to Tuesday are Hims & Hers ($HIMS) and Sofi Technologies ($SOFI). My small bank play, Primis Financial ($FRST), is breaking out. Actively traded client accounts at Hammerhead Financial Strategies have cash levels averaging 30-40%.
Strategy
The name of the game right now is positioning for some big swings. Those swings can offer great opportunities, but only if you have cash to trade and are mentally prepared.
At the time of publication, Rev Shark was long DCTH, TGTX, XERS, HIMS, SOFI and FRST.
