Welcome back to our latest Under the Hood column, where we'll cover all the action for the week ended March 18, 2022. This report is published bi-weekly and rotated with our Minor Leaguers column.
What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We use a variety of sources to generate the list of most popular names.
There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.
From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
Gold looks like it’s ready to run.
The largest gold miner in the world, Newmont Mining Corp. $NEM, has broken out of a multi-year base.
Silver and platinum have dug in at critical support levels and are catching higher.
And, most importantly, gold is in the process of reclaiming its former all-time highs from summer 2020.
These are all bullish developments, suggesting gold -- and precious metals more broadly -- are ready to join in on the party that most commodities have been enjoying for more than a year.
Last month, gold broke above its former 2011 highs near 1,924. Here’s a zoomed-out view of the chart:
Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs. We’ve also sprinkled in some of the largest ADRs from countries that did not make the market cap cut.
These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.
It’s got all the big names and more--but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.
The beauty of these scans is really in their simplicity.
We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.
Based on the market environment, we can also flip the scan on its head and filter for weakness.
Let’s dive in and take a look at some of the most important stocks from around the world.
As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!
One way we're doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn't just end there.
We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.
The move in metals, commodities, and materials was pretty rapid during the last couple of months. Given that, it's little surprise we've seen a pullback in a lot of these names over the past week or so.
One name that was recently on our Hall of Famers report rose rapidly with everyone else. And now it feels like it overshot a bit on it's pullback and it's offering a nice tactical opportunity to swoop in and steal some profits.
These are the registration details for our live mid-month conference call for Premium Members of All Star Charts.
Our next Live Call will be held on Monday March 21st at 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.
High Beta vs. Low Volatility, Copper vs. Gold, and our custom Risk-On vs. Risk-Off ratio have all gone nowhere since the beginning of 2021.
The Australian dollar/Japanese yen also falls into the range-bound category, as the risk-on pair looks a lot like the ratios we just mentioned.
But AUD/JPY has been showing resilience the past few weeks and is currently challenging the upper bounds of its multi-month range.
Since most risk appetite indicators aren’t giving us much in the form of new information these days, an upside resolution from AUD/JPY would be a major development.
It hasn’t happened yet, but things are certainly setting up that way.
In today’s post, we’ll dive into one of our favorite risk-on/risk-off gauges – the AUD/JPY cross - and discuss what it’s currently suggesting about risk-seeking behavior.
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.
We recently decided to expand our universe to include some mid-caps…
For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1B 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.
The way we did this is simple…
To make the cut for our new Minor Leaguers list, a company must have a market cap between $1B and $4B.
