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.
To make the cut for our Minor Leaguers list now, a company must have a market cap between $1 and $4B.
Today's trade is in a name that currently sports a 15% short interest which equates to approximately 7 days to cover. This could be significant fuel for a blast off if the current post-earnings momentum propels this stock above 52-week highs.
The countdown to launch is ticking, so lets get involved.
I've been writing in recent weeks that the best course of action is to adopt a patient approach and let the tape setup more constructively.
Over the last few days, we've moved a step in the right direction. But equally, the high timeframe trends are still choppy especially with Bitcoin still testing its former 2021 highs. While this recent failed breakdown in Bitcoin could be indicative of the ending stages of this consolidation, we are also in the context of a longer-term sideways chop.
When it comes to Bitcoin, I'd like to see a breakout above 73,000 to confirm a new leg higher. But down the cap-scale, we could be seeing opportunities begin to emerge.
Every week, we create a Power Rankings table that lists the market-cap rank of the top 20 cryptocurrencies. This allows us to see the winners and losers as they climb the market-cap ladder.
I'm used to a market where stocks struggle when the US Dollar are US rates are rising. And that's what we've seen all year.
And while the data certainly points to a market of stocks that have been grinding mostly sideways over the past few months, stocks haven't done nearly as bad as you'd think, considering just how strong the Dollar has been and how much rates have risen.
So the question for me is whether these consolidations are going to resolve higher or lower?
And what the implications might be....
A lower resolution here could be a massive tailwind for stocks.
Remember, during Election years, the market tends to bottom in May ahead of a very strong summer, particularly when there is an incumbent candidate.
If these resolutions are, in fact, to the downside, then that's exactly what I would expect to see happen:
