This Week in Episodic Pivots: March 5, 2023
The market is turning around... And these episodic pivots mark the leaders.
Sometimes the market just asks as we expect… And this is one of those times.
Last week I said, “Often after a breakout above a downtrend line, the price will go back and touch that line… And price usually shoots higher afterwards.”
Well, look at the chart below. That’s exactly what happened.
This move makes it very likely we’ll see the markets go higher in the coming weeks. As always, this could change. But for now, we should be heavily invested in the markets. It looks like we’re going higher.
And there isn’t much to screw things up until the next Fed meeting on March 21 – 22. So right now, we can expect the markets to remain calm the next two and a half weeks.
That’s how I’m playing the markets.
Portfolio Update
We have some housekeeping to keep track of this week. First, Roku ( ROKU 0.00%↑ ) closed under the 10-day MA this week. I’m a little disappointed we got stopped out of this one because it should continue to pop with the market. It looks like there’s strength in this name.
But we follow our stops. So we should all be out of that position now.
And I’m going to close the Johnson Outdoors ( JOUT 0.00%↑ ) position. It hasn’t done anything in nearly 3 months, and I feel like our capital is put to better work elsewhere. So let’s close that out tomorrow morning.
Next, Soundhound ( SOUN 0.00%↑ ) closed below our stop level of $2.75 Thursday evening. BUT it jumped right back above on Friday morning. So we should not have sold this position and should still be holding this. And all the AI companies made large moves higher on Friday. I have a feeling these stocks will be the leaders of this rally. AI is catching the attention of the world. And SOUN is leading the way in practical applications.
This week I want to add just one company to the portfolio…
Advantage Solutions ( ADV 0.00%↑ )
ADV is a marketing agency that has been struggling for a couple years. This struggle led to the company replacing the old CEO with a new guy. And this quarter was the first full quarter under the leadership of the new CEO, Dave Peacock.
The quarter was impressive. The company beat revenue expectations and guided adjusted EBITDA above consensus for its 2023 fiscal year.
New guy came in strong. It looks like he will be able to deliver on a turnaround strategy. And this has investors excited… And that’s what caused our episodic pivot in this company.
So let’s enter this stock on Monday and we’ll use $2.15 as a hard stop for now.
That’s it for this week.
Happy Trading!