This week, I wanted to highlight analysis from my friend and well-respected colleague, Mary Ellen McGonagle! She primarily focuses on stocks with a 2-week to 9-month horizon depending on market conditions. She has some great tips on how to capitalize on the current uptrend taking place!
Check out her guest newsletter below to learn more.
Bear Market Rally Over?
Yesterday’s rally in the Nasdaq marked a 20% rise from its June 16th closing low and according to widely followed criteria, this signals the end of its bear market status.
The gains occurred following news of a slight easing of inflation in July and if we continue to see inflation drop, the bull market trade should gain further momentum.
This is great news for Growth investors as many Technology and Retail stocks are well priced after lengthy declines from their November peaks in price. Not all stocks have the criteria for a continued move higher however and below, I’ll review what’s needed.
My work centers around uncovering leadership stocks that go on to far outpace the markets and it’s based on my many years working with William O’Neil who is the founder of Investor’s Business Daily.
Get detailed analysis of the broader markets and top stocks poised to outperform delivered to your inbox every Sunday, along with critical market updates and stock analysis every Wednesday, for just $7 in the MEM Edge Report 30-day trial.
A recent alert for subscribers to my MEM Edge Report was to purchase Enphase (ENPH) on July 10th and it‘s a prime example of exhibiting the characteristics needed to outpace the markets.
Below are the criteria that put ENPH on my short, but select list of buy ideas and I’ll continue to use these proven criteria as the markets trend higher.
First up, ENPH was trending higher in early July as the broader markets were struggling – 3rd box below price chart. When searching for leadership names, relative outperformers during a bear market or correction will often go on to far outpace their pears.
Secondly, you want to make sure that your stock has solid growth prospects as this will draw the big money which will bid the stock higher. ENPH was estimated to report 60% earnings growth over last year in early July.
Lastly, reported earnings and industry group improvement will help propel the stock higher. ENPH reported earnings on July 26th that were 100% greater than last year, with management guiding estimates higher due to expected growth.
This is very positive news which helped push other stocks in the group higher.
ENPH has gained 40% since we added it to the MEM Edge List’s Suggested Holdings List and we think it’ll trade much higher from here. We’ve added an additional Alternative Energy stock to our List last Sunday and it’s up 10% with further upside ahead.
You can gain access to this and other Growth stocks that are poised to outpace the broader markets. As for whether the broader markets are in an uptrend? I review that in today’s Midweek Report which you can access immediately. (hint: I’m suspicious).
For those who’d like to be alerted to any shift in the current market’s uptrend or have access to my select list of buy ideas, sign up for the 30-day trial to my twice weekly MEM Edge Report for just $7.
Mary Ellen McGonagle
Editor, MEM Edge Report