Under The Hood (11-27-2020)

From the desk of Steve Strazza @Sstrazza.

Welcome to our "Under The Hood" column for the week ending November 27, 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.

After another action-packed week, with the market continuing to cruise higher, our list is chock-full of names offering favorable risk/reward opportunities.

Let's dive right in and check them out.

Click table to enlarge view.

Here is a name that shouldn't be new to our Premium Members. This is the popular big-box sporting retailer, Dicks Sporting Goods $DKS, which we discussed in early October in our Young Aristocrats column.

While we don't love the relative strength here, we believe it could be at a turning point relative to the broader market with a failed breakdown at the March lows and fast move higher.

On an absolute basis, price is still consolidating constructively right at our risk level of 60 after what looks to be a slight false start.

The way I learned it there is no such thing as a quadruple top. Sellers have overwhelmed the demand for DKS every time it's tested these key prior highs for over 5-years now. We think this time buyers may finally take control.

We want to be long DKS if we're above 60 with a target at 89 over the next 3-6 months.

Here's the software platform that many of us (including ourselves at ASC) use to communicate with co-workers every day. This is Slack Technologies $WORK, which just closed at a fresh all-time high on both a daily and weekly basis.

We've already outlined two long setups in Slack this summer, but the stock has been chopping around and trending lower on both a relative and absolute basis since its May high... until now.

We want to be careful with this one as it was up almost 40% this week on buyout rumors. It could easily give the gains back if the talks fall through. It could also get bought out at a share price below our target as well, which we need to monitor and be aware of if it happens.

With risk well-defined at the all-time and post-IPO highs, we want to take another shot on the long side. We like WORK as long as we're above 40 with a target at 56 over the next 2-4 months.

Here's the health and benefits solutions company, Accolade Inc $ACCD.

Just over a month ago we said we wanted to be long this name for a quick trade with a target at 50. It's since achieved our objective, consolidated for a few days above it, and looks ready to run higher again.

We love stocks that are making fresh all-time highs on both absolute and relative terms like ACCD is.

This stock is a fast mover, so we definitely want to respect our risk levels and be ready to act quickly. We want to be long Accolade if we're above 50 with a 1-3 month target at 62.50.