Under The Hood (11-13-2020)

From the desk of Steve Strazza @Sstrazza.

Welcome to our "Under The Hood" column for the week ending November 13, 2020.

What we do is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.

Whether we're measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers... there is a lot of overlap.

The bottom line is there are a million ways to skin this cat. Relying on our entire arsenal of data makes us confident that we're producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.

With the S&P ending the week at new all-time closing highs, we continue to believe the bias is higher for equities. As always, we have plenty of ideas to express our bullish thesis.

Here's this week's list. Let's dive right in.

Click table to enlarge view.

Here's a hot new biotech which has already tripled in price since coming public earlier this year. This is Keros Therapeutics $KROS.

Nice uptrends on both absolute and relative terms. Price has been basing constructively for the past several months. If KROS breaks back above its former closing highs of 63 we're looking for a quick upside move toward 85.

Let's look at some updates from previous editions now.

This is Cognex $CGNX, which we discussed back in July and said we wanted to be long above 58 with a target at 73.

Fast forward to today and price just made new 3-year highs, achieved our objective, and is consolidating just beneath it. We still like CGNX, but only if it's above 73, with a 1-3 month target at 96.

Here is Fastly $FSLY, which we've covered a number of times already.

We already made some money on this name after covering it back in August, when we wanted to be long above 74-75 with a target at 113.

After more than achieving our objective, it has since suffered a roughly 50% drawdown following a disappointing earnings report.

Fastly has cooled off relative to the broader market as well. We would like to see it reassert its former leadership. That could already be happening after a failed move beneath support at its recent lows around 74 and a swift move back above them this week.

We want to continue to trade the same range, long above 74 with a target at 113, or depending on your risk appetite, even the former all-time highs above 130.

Despite the messy sideways action for the better part of this year, the primary trend is still higher so we're anticipating an eventual resolution to the upside.