Unfortunately, with the last week or two of action, we've seen an expansion of stocks participating to the downside which suggests this near-term weakness could continue for the rest of the fourth quarter. Rather than the weakest stocks catching up to the leaders, the leaders are now catching down to the weakest names.
We've been highlighting the relative strength of certain Gas names in the Energy space since August, and they've worked wonders on the long side.
Although we've issued several tactical updates since then (December and January), I wanted to use today as an opportunity to revisit this thesis and update our approach given many of our price objectives have been hit.
The Fast Moving Consumer Goods Index continues to chop around, but there remains an opportunity in many individual index components on the long side (while avoiding the weak ones).
Two weeks ago we outlined our thesis for near-term weakness in stocks in India and around the globe.
Since then we've outlined additional information that seems to support the thesis that the next few weeks, and potentially months, are to be a choppy environment. (Feb 1, Jan 27,Jan 26, and Jan 25).
After some downside follow-through, many are asking: How low can we go?
This post is a quick update on a name in the Consumer Goods' space that we've been watching for a breakout, as well as two other names worth putting on your radar.
We've gotten a few questions about the stock, Spencer's Retail Ltd., since it rallied more than 50% over the last few weeks on news of a large shareholder building a position.
The question now is, can this run continue and how do we define our risk if involved in the stock?
