The Waiting Game: Here Are 12 Stocks I’m Waiting to Add
Market action is unusually weak Tuesday morning as investors await the Fed interest rate decision Wednesday afternoon. Breadth is running at about 33% positive and there are about three times as many stocks hitting new lows as new highs (220 to 70).
The most notable thing from a trading standpoint is that there are zero pockets of momentum. Only a small number of stocks are up more than 10%. Chip stocks are showing little strength after being hit hard Monday and oil is up again.
To put it simply, there is a lack of bids out there. Few folks are interested in adding long exposure right now, and I am one of them. I see stocks I want to add but lower prices aren’t a sufficient incentive.
Running through my charts this morning, some of the names I want to eventually add include BridgeBio Pharma ($BBIO), NeoVolta ($NEOV), Abivax ($ABVX), Amazon ($AMZN), Candel Therapeutics ($CADL), Cullinan Therapeutics ($CGEM), ClearPoint Neuro ($CLPT), SpaceX ($SPCX), National Energy Services Reunited ($NESR), SSR Mining ($SSRM), TG Therapeutics ($TGTX), and Xeris Biopharma ($XERS).
There are quite a few other stocks that I think will recover nicely when market conditions improve, but I’m not going to buy them now simply because they are lower. My entries aren’t determined by lower prices. My entries depend on better charts. I don’t want to buy into the teeth of a decline, because the risk the stock goes even lower is high.
Why Lower Is Not the Same as Cheap
I’ve written this before but it bears repeating. The one mistake that wipes out more traders than anything is averaging down too big and too fast in a stock that is trending lower. The bigger your position, the greater the risk of an emotional reaction. When a stock doesn’t bounce back fast enough, the desire to escape the pain is hard to resist.
The point is that the market is acting poorly right now, and just because stocks are lower does not mean they are a good buy. You want to buy when stocks have the best chance of sustained upside, and that does not necessarily have any relationship to how low the price might be.
My best advice right now is to work on that shopping list and then wait for chart development. I’m watching some names above but not buying them right now.
At the time of publication, Rev Shark was long BBIO, NEOV, ABVX, AMZN, CADL, CGEM, CLPT, SPCX, NESR, SSRM, TGTX and XERS.
