Welcome back for another Top Down Trade of the Week.
This is a classic leadership scan.
We start with the best sectors, then drill into the subgroups. We pick one, and then take a look at the top stocks in it.
This week’s standout is Financials, which stayed unchanged in our sector rankings.
We could highlight just about any of these sectors following Friday’s broad-based rally, but the recent action in value is what has my attention right now.
For the first time since the rally off the April lows began, value outperformed growth in a big way this week.
Among the value groups, Industrials and Financials have been consistent leaders this cycle, while Materials and Energy have been steady laggards.
Here’s a look at our overall industry rankings, which show Consumer Finance surging 39 spots and breaking into the Top 20.
This subsector includes lenders, payment processors, and fintech companies— which are all breaking out this week.
Below are the Top 10 names in the Consumer Finance subsector, ranked by relative strength.
This week’s top pick is SoFi $SOFI:
We’ve been long SOFI since November, when the stock was completing a textbook reversal pattern above 13.50.
Fast forward to today, and it has already hit our first two targets, the latest one at the former all-time highs.
Despite an already stellar performance, momentum keeps building, and leadership remains off the charts. I think there’s plenty left in the tank for this fintech winner.
The shelf of former highs around 25 provides a logical area to define risk. We’re targeting 40 from there.
Our team at ASC is constantly running these kinds of top-down scans. If you want access to our research and the trade ideas that come out of it, join us today—risk free.
