From the desk of Steve Strazza @Sstrazza
Welcome to the 2 to 100 Club.
Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying stocks as they climb the market-cap ladder from small, to mid, to large, and ultimately to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B) they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, and Salesforce, to a myriad of others… all would have been on this list at some point during their journey to becoming the market behemoths they are today.
When you look at the stocks in our table you will notice we are only focused on technology and growth industry groups such as Software, Semiconductors, Online Retail, Solar, etc.
Then like any good technician, we filter the list down to those that are closest to new 52-week highs. This allows the cream of these strongest groups to rise to the top and helps streamline our mission to identify technical breakouts in the top-performing stocks.
We’ve sorted this week’s list by proximity to all-time highs again as the major indexes continue to trade at/near record levels themselves.
All of the stocks in the table below are within 6% of all-time highs.
Let’s dive in and look at some of our favorite setups from this week’s list.Lost Password? First up is the $2B medical technology company, Axonics Modulation Technologies $AXNX. This stock was a winner for us back in August last year. It recently hit our latest target at 58 and has been consolidating just beneath this level since late January.
We see no signs of this strength slowing anytime soon as the stock is also pressing to fresh all-time highs relative to the market.
AXNX is setting up with a favorable risk/reward opportunity as it’s digested its recent gains constructively at our objective and now looks ready for its next move higher.
We’re buyers on a breakout above the recent record highs around 58 with a target of 88 over the next 3-6 months.
Next up is Revolve Group $RVLV an online fashion retailer. They operate a platform that connects consumers and global fashion influencers, with a focus on both emerging and established brands.
We are looking at the entire price history for RVLV as the stock just made its public debut in 2019.
The stock just closed at fresh all-time highs on Tuesday. We have also seen an acceleration in the relative trend over the past few months as RVLV is breaking out of an almost 2-year base and looks poised to test its record highs vs the broader market, which it made just days after its IPO.
Our risk is well defined at the former highs resulting in a very favorable reward ratio. We’d be foolish not to swing at this one.
But, we are only buyers on a decisive upside resolution from this base. The level is 48. If and when we take that out, we’re long with a 3-6 month target at 73.
Next up is Diodes Inc $DIOD, a $3.5B manufacturer and supplier of application-specific products for the semiconductor industry.
After breaking out of a decade-long base several years ago, this stock has spent the majority of its time chopping between its first extension level and former highs. Although, this changed during Q4 of last year when DIOD finally sliced through our first objective and followed through with a quick runup to our next target.
It’s spent the past few months coiling in a tight continuation pattern just beneath its objective of 86.
The stock has been steadily outperforming for at least five years and is currently at its highest level relative to the overall market since 2011.
We want to own DIOD on strength, if and only if it’s above 86 with a 3-6 month target at 140.
Next up is Silicon Motion Technology $SIMO, yet another mid-cap semiconductor stock.
After consolidating in a base for more than four years, SIMO just broke out to fresh all-time highs about a month ago. After a quick shakeout back beneath its former highs, price is now powering higher once again and looks poised to make another leg higher.
SIMO is also testing key multi-year highs on a relative basis and looks ready to break out of its base vs the Russell 3000 any day now.
We want to be buyers of SIMO if we’re above 62 with a target of 84 over the next 3-6 months.
Last on our list is TTEC Holdings $TTEC, a $4B customer experience technology and services company.
This stock is a secular leader, as illustrated by its steady uptrend since its financial crisis low. It’s really been stair-stepping higher from one target to the next lately, propelled by a decade-long base breakout last year.
TTEC may need time to digest its current gains here so some consolidation or corrective action wouldn’t surprise us, and would actually be a healthy development. We’ll be paying close attention to how price reacts as it approaches this logical level of supply in the mid-90s.
We want to be buyers of TTEC on strength above 96 with a target of 155 over the next 3-6 months.
That’s the latest scoop on our 2 to 100 Club. We hope you enjoyed it!
Thanks for reading and please reach out to us with any questions.