Archives for April 2019
Semiconductors See Large Buying
Health Care – Cause For Pause
Health Care stocks experienced heavy selling pressure yesterday (4/17/19), with XLV (Health Care Select Sector SPDR) shedding 2.88%. What jumped out at us was the large number of stocks making UI sells in the sector. This was an extreme day to say the least. We looked back at prior days with this level of selling or more to see how the sector performed afterwards. Based on the findings, there is cause for pause.
Wednesday’s data showed that over 28% of our Health Care universe returned a UI sell signal. To put this rare event into perspective:
- YTD, excluding Wednesday, the daily average % of Health Care stocks showing UI sell signals is 1.52%
- Going back to 2013, including Wednesday, there have been only 14 trading days where +25% of our Health Care universe has showed UI selling
Below is a look at all days since 2013 with extreme selling in Health Care stocks. We define extreme as days where +25% of our Health Care universe returned a UI sell signal. At first glance, there tends to be additional days of extreme selling post the first day of large selling. This could indicate that the sector will likely see choppy waters ahead.
BOTTOM LINE: Days with extreme selling are rare. The average forward return for the Health Care sector after these instances is lackluster at best.
Materials & Industrials See Buying (Update)
The Horse Race of 2019 – Q1 Lookback
Markets have blasted higher in 2019. If you plan to beat a ripping market, you’d better have some of the best horses in the race. This year has felt a lot like a horse race for growth stocks. What was once a hated group (Q4 2018) is now leading the pack…and in a big way.
Below is the performance of all Q1 MAP View equity profiles held through 4/12/2019:
Clearly we caught some leaders to have out-performance like this. Below are the 3 horses that were profiled at the beginning of 2019:
Below are the 1 year MAP charts for these. We also want to point out that these stocks are in 3 different sectors: Financials, Discretionary, & Health Care.
MAP View Stocks Q4 2018, Performance Update
One thing we at MAP try and do is find the best stocks out there…the outliers. The 4th quarter of 2018 was a “rough” one for the markets to say the least. We looked back at how our weekly stock profiles performed since, given how volatile the market has been.
The 4th quarter includes the all-time closing high for the S&P 500 (2925.51) made on October 3rd. From then until the end of the quarter the market practically nosedived, falling to a closing low of 2351.10 on Christmas Eve. That was nearly a 20% pullback from peak-to-trough. Since the low we’ve seen a V-shaped recovery for markets. As of yesterday, we are still ~2% below the all-time closing high.
So, how have the MAP stock profiles performed? The below performance assumes initiation as of the profile date and held until yesterday’s close (4/3/19). Here are a couple of facts:
- Avg. Q4 stock profile return = +16.24% vs. avg. SPY (S&P 500 ETF) return = +7.85%
- Avg. December profile return = +33.73% vs. avg. SPY return = +12.70%
Needless to say, there was a large amount of out-performance. There were 3 notable standouts:
- 10/7/18, INTU (Intuit Inc.) +23.98%
- 10/28/18, XLNX (Xilinx Inc.) +65.99%
- 12/23/18, TTD (The Trade Desk, Inc.) +98.14%
Materials Stocks See Big Buying
RealVision Interview with Lucas Downey #2
In this interview, Luke take’s a look at 2 growth stocks showing unusual buy activity. Intuit Inc. (INTU) and The Trade Desk, Inc. (TTD) are household names for MAP and both continue to be on our radar. They each sport strong fundamentals, but most importantly they are gaining alongside unusual trading activity.
Click below to watch the full interview.
Industrial Stocks Showing UI Buying
Semiconductors Have Been On Fire
There is no doubt that the V-shaped recovery for stocks has been swift. You can see below the returns for many indices since the Christmas low. Possibly the most impressive is the +30.5% return for the PHLX Semiconductor Index:
For MAP, our focus is in identifying the leaders. The following 2 stocks have been showcased in our research continuously because the data suggested there was large demand for the shares. Since the 12/24/18 low, Xilinx, Inc. (XLNX) is +60.47% & Keysight Technologies Inc. (KEYS) is +55.6%. Bottom line, if you are going to out-perform a bullish market, one way to do it is by finding the leading stocks. Looking for unusual institutional activity in shares is one way to find the leaders of tomorrow.
