Under The Hood (12-25-2020)

From the desk of Steve Strazza @Sstrazza.

Welcome to our “Under The Hood” column for the week ending December 25, 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 start with a familiar name before we jump into this week's new stock setups.

Here is Crowdstrike $CRWD which we've already doubled our money on this year with two trade ideas in previous Under The Hood editions.

Our most recent target was 209, which price just achieved last week.

We always like to take some off the table, pay ourselves, and reassess things when price hits our objective. With that said, we also like to stick with our winners, and this is definitely one of them.

After such a quick run-up in December, we'd like to see CRWD digest its recent gains at this logical level of supply.

The stock remains a relative leader, so if we get some healthy consolidation here and are above 214ish, we want to be long against our prior objective with a target at 332 over the next 3-6 months.