From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts
Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs. We’ve also sprinkled in some of the largest ADRs from countries that did not make the market cap cut.
These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.
It’s got all the big names and more--but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.
The beauty of these scans is really in their simplicity.
We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.
Based on the market environment, we can also flip the scan on its head and filter for weakness.
Let’s dive in and take a look at some of the most important stocks from around the world.
Cocoa is taking the shape of a potential ascending triangle. This pattern carries a bullish bias as buyers step in, creating a series of higher lows.
Momentum is another bullish data point on the chart. Notice the 14-week RSI has held within a bullish regime since the initial thrust higher in early 2018.
We got into and quickly out of a trade in Microstrategy $MSTR over the past two weeks. Whipsaws suck. But the way the stock has quickly battled back is telling me we weren't wrong, just early. And I'm getting back in, but with a new stop loss level.
Aha! moments often occur when we are faced with a problem or a situation that requires us to think outside the box. They can happen when we are struggling to find a solution to a problem, and suddenly, a new idea pops into our heads.
Think about the story of Archimedes, who had an Aha! moment when he saw the water in his bathtub overflow. Suddenly, he realized that the volume of an object can be measured by the amount of water it displaces.
Another example of an Aha! moment is when we finally understand a concept that we have been struggling with for a long time. It can be a concept in mathematics, science, or even in our personal lives. For me, they often happen in my world of trading.
In fact, I would argue that a career spent engaged in trading the markets by definition is a...
Today's most significant insider transaction report is a Form 4 filing by Ares Management, which revealed a purchase of roughly $26.4 million in Frontier Communications Parent $FYBR.
The hedge fund now owns 36 million shares, which represents an ownership stake of 14.3%.
As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!
One way we're doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn't just end there.
We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.
Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey...
[9/7: updated stop to 48. We're already #FreeRiding here, so whatever we sell the remaining portion of the position for is pure profit!]
According to "the news," Americans can't afford to buy homes and rising mortgage costs will only deepen the problem.
Cool story, bro.
Do you know what disagrees? The price of virtually every publicly traded homebuilding company. We're already long Lennar and Toll Brothers which continue to work for us.
Next up is KB Homes $KBH, which appears to be on the verge of a big breakout following a welcome response to its recent earnings report.
Check out the chart of Canadian dollar futures with the Commitment of Traders Report (COT) in the lower pane (red line for commercials, black for large speculators, and gray for small speculators):
Commercials hold their largest net-long position since early 2019. Extreme positioning such as this tends to mark key inflection points.
Why?
Because commercial hedgers represent the largest short sellers for any given market. And strong hands move markets.
Bottom line: When commercials get this bulled up on the Canadian dollar, forceful uptrends often follow as they unwind their position.
The stage is set for a rally, but it all comes down to price.