Please ensure Javascript is enabled for purposes of website accessibility
Top Ten Trader
Discover the Market’s Strongest Stocks

August 5, 2022

On the whole it’s looking like a consolidation week for the market—the Nasdaq is up around 2.5% on the week, though just about every other major index was either flat (broader indexes) or up a bit (S&P 500).

On the whole it’s looking like a consolidation week for the market—the Nasdaq is up around 2.5% on the week, though just about every other major index was either flat (broader indexes) or up a bit (S&P 500).

Stepping back, the situation remains broadly the same, with the evidence split between top-down (looking at the indexes first) and bottom-up (individual stocks). From a top-down perspective, things look good—the intermediate-term green light remains in good shape while we’re seeing some other secondary measures improve, with new lows slowly sloughing off and growth stocks outperforming defensive names in general.

From a bottom-up perspective, the evidence is also improving … but, as we’ve been writing, there’s still a lot of chop out there among high relative performance stocks. Yes, some of the names down 80% from their highs are popping on earnings, but some stuff bumping up against two-to-four-month highs is meeting with some selling—including many major indexes, in fact, which are testing their peaks from the late May/early June rally.

We’re on the lookout for that to change—and to be fair, we’re actually seeing some of it, with some positive earnings reports or otherwise bullish action bringing a few more multi-month highs, though we’d like to see it broaden out a bit.

All in all, we’re just going with what we see: The bears are in retreat, and there are an increasing number of opportunities out there, both of which are good—but it’s still relatively tricky, with lots of potholes and daily rotation along with the aforementioned selling on strength in many areas.

Thus, it’s fine to grab some names at logical levels, but trail your stops and take partial profits—and, of course, honor your stops if the name hits a pothole. We favor slowly increasing exposure, and if you’re making progress, you can extend your line. We’ll likely leave our Market Monitor at a level 5, but all in all we consider this another constructive week.

CrowdStrike (CRWD) has been up and down of late, but it’s set up a relatively calm structure over the past month just south of its 200-day line. Earnings aren’t out until August 30, so we’re not opposed to a small buy here (stop near 174) or a potential breakout buy above 198-200 down the road.

Intra-Cellular Therapies (ITCI) has been testing, testing, testing, but after kissing its 200-day line on Monday, the stock has shown great strength and is now closing in on resistance in the 60 to 61 area. The quarterly report is due next week (August 9); if you’re aggressive you could nibble here, or just wait to see if ITCI can really get moving on earnings. If you buy, use a loose-ish leash of 12% to 15% for an initial loss limit.


Partial profits: We like the action in Axonics (AXNX), including the shakeout on earnings (and subsequent recovery), but we’re also OK taking a quick partial profit up here and riding the rest.

Global Blood Therapeutics (GBT) – take some chips off the table on this week’s windfall move.
Cinemark (CNK) – cracked on earnings
Fortinet (FTNT) – clonked on earnings
Incyte Corp. (INCY) – again, cracked on earnings
Perrigo (PRGO) – looks fine but not powerful. Take the minor profit
United Therapeutics (UTHR) – no bounce after big selling

Outright sells:
Autonation (AN) – tripped stop. You can hold with a stop near 110 if you still have some, but we’re out.
Baidu (BIDU)—Cracked support this morning
Daqo New Energy (DQ) – tripped stop
Dollar Tree (DLTR) – tripped stop on the WMT news this week
Legend Biotech (LEGN) – tripped stop on share offering. If you happen to still own it, you can consider holding with a stop near 45, though there are better looking names out there for sure.
Li Auto (LI) – Another breakout rejection and steady bleed since
Northrop Grumman (NOC) – tripped stop
Xpeng (XPEV) – broke down

Agilon Health (AGL) near 23.5
Argenx (ARGX) near 350
Axsome Therapeutics (AXSM) near 36
Consol Energy (CEIX) near 54
CrowdStrike (CRWD) near 174
Enphase Energy (ENPH) near 220
Intra-Cellular Therapies (ITCI) near 53
Lantheus (LNTH) near 67
Nexstar Media (NXST) near 182
Neurocrine Bio (NBIX) near 95