Under The Hood (12-11-2020)

From the desk of Steve Strazza @Sstrazza.

Welcome to our “Under The Hood” column for the week ending December 11, 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.

As the major indexes continue to trade at or near record highs, we continue to find plenty of stocks breaking out and offering favorable setups on the long side.

Let’s dive right in and see where all the buzz was last week.

Click table to enlarge view.

Let's kick things off with some names we've already covered prior to today and then we'll dive into some fresh setups from this week's list.

Here's Tesla $TSLA. You've probably heard of this one by now... We've covered it a lot this year.

The EV maker has been rallying aggressively off its March lows and with more new highs on both absolute and relative terms, it's showing no sign of slowing down any time soon.

We want to own Tesla above 606 with a target at 919 over the next 6-12 months. Be patient with this one and expect some drawdowns along the way as we're betting on another 50% move higher from here.

Here is a hot growth name within the Software space. This is MongoDB $MDB, which we put out a long idea on back in late September with a target at 332.

The stock achieved our objective with a big move higher last week. It continues to trade at all-time highs on both an absolute and relative basis and is offering a well-defined risk level to trade against at our prior objective.

It may need some time to digest its recent gains, but as long as we're above 330, we want to own MDB with a 3-6 month target at 480.