Do you see how stocks are making new lows? That’s a characteristic of downtrends, not uptrends. We first want to identify what type of market environment we’re in, and then decide which tools we’re going to use to help us profit and manage risk.
Something interesting about the current market is that a lot of stocks are making new lows. Most stocks are. But there are a select few that decided they were going to make new highs instead. We call that Relative Strength. You sometimes hear people say how they’re “Bucking the trend”. This is that.
Our upside target in Zoom Video $ZM was hit today. That was a quick 40% gain. One for the good guys!
But which one is next? I think it’s Docusign $DOCU. The stock is ripping to all-time highs relative to S&Ps and prices have been consolidating nicely. I think the next move is higher. [Read more…]