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Momentum Monday - Two Wars, 7 Percent Mortgages and FOMO is Back!

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Good morning. As always, Ivanhoff and I got together to discuss the momentum in the markets. I also include Riley’s ‘Price and Popularity’ post amd the charts we discuss in the show at the bottom of the post.

You can watch this weeks episode of Momentum Monday and last weeks episode of Trends with Friends on my YouTube channel. It is easy to subscribe and if you do every Sunday you will get an alert when the shows get posted.

Chapters:

  • Intro (0:00)

  • Speculation is alive (0:55)

  • The effect of lower rates (5:00)

  • Howard’s ideas (10:40)

  • Semiconductors & AI (17:42)

  • Ivan’s week in review (20:50)

Riley’s Corner:

Here’s Riley’s screen that tracks new 52-week highs and lows sorted by the total followers on Stocktwits. For those unfamiliar, here’s the gist, 

In uptrending markets the least followed stocks with the highest relative strength are most interesting to me.

In downtrending markets, the most followed stocks with the weakest price relative strength are most interesting to me.

Riley shared a few words on this week’s results… 

Repeat New Highs led New Lows — 195 vs. 18.

Some notable names,

Birkenstock ($BIRK) is the New High Standout of the Week. The footwear company flew +14.97% and closed at an all-time high.

Affirm ($AFRM) is a notable new high. The buy now pay later (bnpl) payments platform posted its best week of all-time, propelling +43.61%. Despite the record week, $AFRM is still down 77% from its weekly all-time high.

Coinbase ($COIN) is a notable new high. The crypto company cruised +15.77% and closed at its highest price since April 2022.

NetApp ($NTAP) is a notable new high. The software systems provider sailed +16.52% after it beat earnings estimates and raised guidance. $NTAP closed at its highest price since October 2000.

PDD Holdings ($PDD) is a notable new high. The Chinese retailer rallied +22.38% after it beat earnings estimates.

UiPath ($PATH) is a notable new high. The software platform surged +36.46% after it beat earnings estimates and raised guidance.

Salesforce ($CRM) is a notable new high. The enterprise software developer dashed +15.87% after it beat earnings estimates and raised guidance.

BiliBili ($BILI) is the New Low Standout of the Week. The Chinese streaming service sank -18.60% after it missed earnings estimates.

Arrowhead Pharmaceuticals ($ARWR) is a notable new low. The biopharmaceutical company plummeted -20.43% after it missed earnings estimates.

BRP ($DOOO) is a notable new low. The recreational vehicle manufacturer dropped -12.53% after its weak earnings release.

Click here for the full weekend review.

Here are Ivanhoff’s thoughts:

Stock prices change when expectations change. The market expectations for interest rates have changed drastically over the past month. This is why we have seen such a tremendous rally in many stocks. The most sensitive to interest rate changes groups are the best performers since October lows – software, biotech, regional banks, biotech, etc.

The move in software and Internet stocks hasn’t been based on dreams and anticipations for a better future. Almost every major software company that reported earnings this quarter, crushed estimates and raised guidance. Most of them also gapped up and continued higher as a result. Just from last week, we saw that in ESTC, PATH, SNOW, ZS, CRWD, WDAY, etc. The software space has been extremely hot.

Small caps finally broke out above their 200-day moving average and all hell broke loose. Stocks with high short interest squeezed higher – UPST, AFRM, AAOI, COIN among many others. The speculative frenzy is on. FOMO is back in full force. I hope you have been able to participate properly. 

Featured Charts:

Coinbase remains strong

Elastic pops after earnings

Cloudfare bounces around near 52-week highs

Palantir stays hot with the rest of the defense sector

Have a great week.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here.

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