2 Stocks I'm Watching in a Market Supported by FOMO and Short Squeezes
Indexes are holding up well on Monday as we await the CPI report on Tuesday morning and the Fed's interest-rate decision on Wednesday afternoon. Breadth is running 4,600 gainers to 3,200 decliners, and there are around 130 names hitting new 12-month highs.
There is some big-cap strength in Oracle (ORCL) , Adobe (ADBE) , Salesforce (CRM) , Advanced Micro Devices (AMD) , and a few others, and financials are holding up well, but energy and commodity names are lagging.
The market seems to have lost interest in the inflation issue and is not embracing the idea of a slowing economy. The bull case is that there is a Goldilocks economic environment in which inflation is falling, growth is staying strong, and the Fed will make a dovish pivot.
Bears are scoffing at the likelihood of this scenario, but until there is some catalyst for a shift, the momentum will stay positive. Perhaps CPI or the Fed rate announcement will trigger a shift in sentiment, but this is a market that is rejecting the bearish narrative and is supported by FOMO and short squeezes.
Although the trading action has been generally good, I've been doing some selling into strength. I'd like to add some long exposure, but there isn't much that I like on a technical basis right now.
The biggest danger in this market right now is that the desire to buy may cause some mediocre entries. Fear of missing out can cause a lack of discipline, so it is very important to stay aware of your emotional state when considering new buys.
Two charts that I am watching right now are LianBio (LIAN) and Nano-X Imaging (NNOX) . I have positions in both and would like to add, but I don't see a reason to rush in right now.
Here are the charts.
LIAN Chart
NNOX Chart
Source: RealMoney
