Welcome to a brand-new trading week.
It was the second worst-week for the S&P 500 this year as the markets continue to react to a hawkish Fed that seems dead set on “higher for longer” interest rates.
Of course, we have to keep in mind that the Fed is trying to “balance” their messaging so as not cause an over-exuberant market…
So nothing is set in stone – we’ll just have to wait and see how it plays out.
In the meantime, let’s start the week as we always do – with three high-potential short-term plays that could surge over the week.
Because even though most stocks were heavily down for the week doesn’t mean all stocks were…
And we can look at this “defiant” pool of stocks to find those that can continue to stick it up to the hawkish Fed to deliver some much-needed gains to begin the week.
So, without further ado…
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Cameco Corporation (CCJ)
Uranium producer CCJ actually fell by 1.3% last week. But the reason I’m including this stock is its chart – with its price solidly “bouncing” off its 21-day moving average as a support line since early July – just before the current market pullback started.
In short, CCJ has been performing better at almost exactly the same time the market started performing worse. And with its 21-day moving average proving it can serve as a strong support level for its price, CCJ looks set to continue the current pullback to keep ripping higher.
Smith & Wesson Brands, Inc. (SWBI)
Firearms manufacturer SWBI had been negatively affected by the broader market pullback – albeit not as much as the tech companies. But after announcing a massive $50 million share repurchase program last week (massive because the company’s market cap is under $600 million), its shares have been rising strongly…
And the price action indicates that this trend is likely to continue. The upward price movement last week resulted in SWBI blowing past its 200-day, 50-day, and 21-day moving average – and that’s always a good sign for a continuing trend (at least in the short term).
Vista Outdoor Inc. (VSTO)
VSTO designs and manufactures outdoor sports and recreation products, and over the past week, its stock is up nearly 7%. While there’s no clear catalyst behind this move, the price action tells me it’s likely sustainable.
Why? Because after last week’s move, it’s broken past a resistance level established in early August – which was its highest level for the past year. That said, this is a highly volatile stock – so even though I always say to manage your position sizing carefully for these fast-moving stocks, you may want to be even more conservative with VSTO.
To your wealth,
Felix @ Ace of Investing