This is the video recording of our January 3rd Monthly Charts Live Strategy Session
The Minor Leaguers (01-03-2022)
From the desk of Steve Strazza @Sstrazza
Welcome to our latest Minor Leaguers report.
We’ve already had some great trades come out of this small-cap-focused column since we launched it in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.
We recently decided to expand our universe to include some mid-caps…
For about a year now, we’ve focused only on Russell 2000 stocks with a market cap between $1 and $2B. That was fun, but it’s time we branch out a bit and allow some new stocks to find their way onto our list.
The way we’re doing this is simple…
To make the cut for our new Minor Leaguers list, a company must have a market cap between $1 and $4B. And it doesn’t have to be a Russell component–it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.
The same price and liquidity filters are applied. Then, as always, we sort by proximity to new highs in order to focus on the best players. But instead of all-time highs, we’re sorting by 52-week highs these days as we don’t want to discriminate against energy or other cyclical stocks.
The goal is still to catch the strongest names while they’re small and have serious upside potential. If any of these stocks ever climb the ranks to the big leagues, the returns could be huge. We’re looking at up to 10x moves just to break into large-cap land!
Let’s dive into this week’s report and see what’s happening in some of the hottest stocks in the Minor Leagues.
Follow the Flow (01-03-2022)
From the desk of Steve Strazza @sstrazza
This is one of our favorite bottom-up scans: Follow the Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish… but NOT both.
We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients. Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.
We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.
What remains is a list of stocks that large financial institutions are putting big money behind… and they’re doing so for one reason only: because they think the stock is about to move in their direction and make them a pretty penny.
Then we flip through our list of stocks flashing unusual activity and pick the best setups using many of the same technical filters we do for our other scans. And just like that, we’ll follow the money flow and fatten our own pockets along with some of the world’s most powerful financial institutions.
[Options Premium] Base/Metal
The All Star Charts team put a report out about the Metals sector end of last week, highlighting undercurrents investors should be keeping an eye on. Not everything is sending “all-clear” signals yet. But there is one particular name that definitely has my attention and is offering a good reward-to-risk opportunity to get involved.
I’ll spare you any further preamble and we’ll get right into the money quote that has me interested:
Are you scared of new highs?
A Theme: New All-time Highs
Who Won This Year?
Crypto Charts of the Year
It was a big year for Crypto, Web 3.0, the Metaverse and all things Blockchain.
In case you didn’t hear, a lot of people made a lot of money. And “a lot” is probably understating it.
How’d you do?
Either way, win lose or draw in 2021, we’re looking forward to 2022. But in order to do so responsibly, it’s important to know where we’ve come from. [Read more…]
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