We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.
For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.
That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.
We expanded our universe to include some mid-caps.
Nowadays, to make the cut for our Minor Leaguers list, a company must have a market cap between $1 and $4B.
Names with high short interests continue to work in this environment as the bears struggle to take down even the worst stocks.
As such, it's time to run it back with another Freshly Squeezed report.
Here's how we do things...
We find the most heavily shorted stocks in the market. We wait for momentum to come into these names. And then we ride them higher as the bears get squeezed.
We got new short data this week, so let's dive in and talk about it.
Our scan is quite simple. It is designed to identify stocks with the most aggressive short positions.
When a stock is shorted, it means incremental buyers are waiting in the wings to close out their bearish bets.
We love this, as new buyers are the one true catalyst for higher prices.
When shorts are proven wrong, they become buyers of the stock. In many cases, this happens as momentum flows into these names and fuels massive short-covering rallies.
For this reason, we pair short-interest data with short-term momentum overlays, as this combination is needed to spark the moves we’re looking for.
In today's Flow Show, Steve and I put our heads together to find a good trade to take advantage of elevated options premiums in a big-cap name that may have seen the worst of the selling and is now may be putting in a pivot.
That name is Amazon $AMZN and here's the chart where it stands right now:
From the Desks of Ian Culley @IanCulley and Sam Gatlin @Sam_Gatlin
It’s time to buy natty gas.
A bullish momentum swing is on the verge of flashing green. And seasonal tailwinds are due to pick up as price pulls back.
Plus, the dominant four-year cycle is approaching the next expansion phase.
Buckle up!
Check out the monthly natty gas chart with a MAC-D momentum indicator in the lower pane:
The monthly MAC-D is nearing a bullish crossover at extreme oversold conditions. This long-term momentum setup occurs after cyclical lows, marking critical inflection points in 2012, 2016, and 2020.
Also, all three previous natty gas cycles hit bottom in the spring and ripped higher toward the end of summer – the start of the best three months of the year (August- October).
Our Hall of Famers list is composed of the 150 largest US-based stocks.
These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.
It has all the big names and more.
It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that. Click here to check it out.
The Hall of Famers is simple.
We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.
Let’s dive right in and check out what these big boys are up to.
