2 To 100 Club (06-10-2021)

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

Something we’ve been working on internally is using various 'bottoms-up' tools and scans to complement our top-down approach.

One way we’re doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small, to mid, to large - and ultimately 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.

But the scan doesn’t just end there. We only want to look at the strongest growth industries in the market as that is typically where these potential 50-baggers come from.

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 as the major indexes continue to trade just beneath record levels themselves. Although, notice how there are far fewer stocks making new highs than usual once again this week? That is because growth and tech - which compose a great portion of the 2-100 Universe - have taken a much bigger hit than other areas of the market in recently.

While we're used to having a list of names all within about 1% of highs, the stocks in this week's table are as much as 5% off all-time highs.

We continue to see a lot of the same names make our list in recent reports, many of which we have already written about and you can find on our trade ideas page.

It's getting harder and harder to find new bullish setups as participation narrows... That's information about the current market environment, and this group of stocks in particular - and it's not bullish.