Mid and small-cap stocks have been under-performing their large-cap counterparts as of late, however, it’s important to remember when looking at an index that it’s basket of stocks and therefore looking at each of the components can unearth great opportunities. Yesterday we did a deep dive into mid-cap stocks for long opportunities, so today we’re following that up with a look for similar setups in small-caps.
Before we get into individual stocks, I want to highlight the potential failed breakdown that we’re watching in the index itself. Last week prices undercut the March lows as momentum diverged positively. If we can get back above 8,040, it would confirm a failed breakdown and likely be the catalyst to push this market to new all-time highs. The individual names within this index remain mixed, so a neutral stance remains appropriate in the index itself until this range resolves itself.
Click on chart to enlarge view.
The first stock on our list is Parag Milk Foods, which is resolving a 2-year range to the upside. This looks like the start of a new long-term trend, therefore we want to be buying this breakout above 357 and taking profits near 452.
The next name on our list is TV Today Networks which broke out of a 1.5-year base last September and has been trending higher since. Prices have been consolidating above our first price target since December and are now ready to continue to the upside. As long as prices are above the May closing lows of 430, we want to be buying weakness and taking profits at our secondary price target of 577.80.
Here is a list of the remaining small-cap stocks we want to be buying:
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