Is “value” the place to be? Here’s your value ticker: $LOL. But here is your trade on ARKK – May 22, 2023
This is Dan and I want to talk about ARK ( NYSEARCA: ARKK ) here. You can look at the market today ( NASDAQ: QQQ ) and we just get a continuation of this breakout. It’s the same thing with the S&P ( NYSEARCA: SPY ), not quite as convincing.
However, this really does get people’s attention. It gets the bear’s attention, that’s for sure, they tend to come out of hibernation. But the Nasdaq Composite ( INDEXNASDAQ: .IXIC ) is really kind of a big deal. The same thing with the Nasdaq 100 ( INDEXNASDAQ: NDX ) here. We want to be in growth stocks, or I will put it this way because everybody talks about the value, is the value trade dead? Or do we just get into the growth market? I’ll say it, somebody needs to, the value trade has always been dead, always.
There might be a time when the market is imploding and people are wondering less about what stocks they have in their account and more about how many rounds of ammo they have in their gun safe if you have such a thing. Otherwise, if you don’t you are wondering if you can hang out with your neighbor who does.
Anyway, during those adverse times, of course, people are going to go to the “value” stocks, which are those stocks that do make money but their charts suck. That’s the fact, Jack. But I will also say this, there is no such thing as a growth stock. There is no such thing as a growth company. What there is a lot of, and they do cycle through as time goes on, there are a lot of companies that are in growth mode. And that’s different than being a growth stock.
This one comes to mind, Qualcomm ( NASDAQ: QCOM ). Growth name, right? Well, guess what? It sure was back here. A massive growth stock but then, over the next couple of years it basically just about erased itself, down 88 percent. Nothing against Qualcomm ( NASDAQ: QCOM ). The point is, What happens when a growth story in a stock suddenly starts imploding the other way? The answer, you realize that maybe there is more to trading than just going into growth stocks or going into value sectors, stuff like that.
What you want to be doing is, looking for those stocks that have good fundamentals at the time. Not 3 years ago, not 3 years from now, unless the chart verifies it; unless the chart confirms it. You want to have stocks in your account with charts that are good. They don’t have to be awesome unless of course you already own them. But you want to have stocks that are moving up and that have good solid fundamentals with expanding revenues and earnings. You buy a stock on fundamentals AND technicals. You sell a stock on technicals.
Now, a lot of these chuckleheads on TV are sitting there all day long, it was driving me bats because I happened to be in the kitchen doing some stuff and I had one of the financial networks on and they had the same 4 people on that have been on for 15 years. And they are talking about the same crap that they have always been talking about, which is, Deere ( NYSE: DE ) is doing this. How can people not be in this, it’s a wonderful company. Or well, I own Nike ( NYSE: NKE ), I’ve owned it for a long time and I am not really happy about it. But I like the shoe company.
Guys, this is not going to make you money. It is not going to make you a dime. In fact, it is going to lose you money. `So if you are looking at value. If you are looking at fundamentals, that is all well and good. By the way, you don’t hear me talk too much about it on TV, and I am generally a hell of a lot more right than I am wrong.
Now, before you think I am patting myself on the back I will clarify that. I tend to be right more than I am wrong because the only stocks I talk about are the stocks that are moving higher. So unless, by some magical event, I happen to be talking about a stock right when it hits its all-time high and snap hook reverses, I am always going to be right because it is not me, it’s the actual stock.
So you look at stocks that make you think this way, look, this stock is just breaking out of a base. I get it, and I will show you one of those in just a second. I get it, I see what’s going on here. I like this probability right here right now. It’s not like, well they are book to bill is this and they are picking up market share from Jeb’s Feed and Grain Shop. And they do happen to sell chicken. It’s not that kind of stuff.
You are looking at a chart that you recognize from winners of the past, other winners. You are looking at a chart that looks like Microsoft ( NASDAQ: MSFT ). It looks like even Google ( NASDAQ: GOOGL ) at this point, although, they were really sucking the hind tailpipe for a long time. You are looking at a stock like Apple ( NASDAQ: AAPL ). You are looking at a stock like NVIDIA ( NASDAQ: NVDA ).
All of these types of things that you are looking at and you are saying. Okay, I understand this. I get this. I like this stock right here. Why? Because the stock is going up. You don’t have to have any magical powers of prediction or premonition. All you have got to do is have some eyeballs and a head that is able to keep the eyes level so you see what everybody else is seeing but few people are trading.
So you want to focus on stocks that are in growth mode. The companies are in growth mode. They are high-growth companies at that time. They are the Microsoft‘s ( NASDAQ: MSFT ) of today. Where Microsoft ( NASDAQ: MSFT ) was back in the 80s and certainly the 90s. Everything went up in the 90s, you didn’t even have to be smart, just buy 4 letters, any 4 letters and you’re good, and you made money and you were a genius. Then came March of 2000 and everybody got revealed to what they really were, which was just lucky.
The bottom line is, you want to be focused on companies that are in growth mode. So why am I looking at ARK ( NYSEARCA: ARKK )? Well, I will tell you why. They could change the ticker to H-O-P-E. As you guys know this is a Cathie Wood thing, the big huge beneficiary, of the gamma squeeze a couple of years ago. But all of these stocks in here, I don’t know if this is an up-to-date list, but all of these stocks in here are innovation. They are innovators, which by definition means they are in growth mode. Now, I am not saying they are. I am just saying that is what the index is for. I think a lot of the stocks that Cathie Wood owns are crap. It is like she just started trading 5 or 6 months ago and she’s got a bunch of money.
However, it is not really what I think so much as what the market thinks. And the index here, if you want to call it that, it is an ETF but I look just look at it as the Hope Index. You see this has been drifting along the 200-day moving average for a while. The 50-day is below it, which is not a good sign, you want to see the 50 above it. However, the 50 is starting to drift higher so I would say, by the way, this is looking, by mid-June, at the latest, the 50-day will be up above the 200-day, which will be a good thing, that’s a good technical development.
But you look at the volume here today. It is probably about 20 percent higher than the average volume. The stock closed right at the intraday high of 40.87, 40.87 was the high, 40.77, so it closed within $.10 of its intraday high. That means that there is buying all the way into the close. This is what you want to see. It is exactly what you want to see.
I put this on our Active Trade Idea List, which is a list of stocks that I follow all the way through from initial entry, stop level, raising your stop, and raising your stop again. Selling half, selling it all, stuff like that. What I am looking at here on this is, we got a solid breakout, really right out of the gates here. Friday’s intraday high was 39.30, so really, your time to buy this stock, Thursday’s was 39.23. So your time to buy this stock was right here when the stock surpassed Friday’s intraday high, and then you are off to the races. You are not making a huge amount today, 4 percent, but I look at this and I see the turn.
And then I also look at all of these stocks in here and they are all, at least theoretically, and maybe practically, they are all in growth mode. I will just flip through these real quick and see how they are coming out of these bases. These are all showing you the same thing, ( NYSE: DNA ), ( NYSE: WST ), ( NYSE: TWLO ), ( NASDAQ: ZM ). ( NASDAQ: VCYT ), ( NASDAQ: ROKU ), ( NYSE: PATH ) ( NASDAQ: COIN ). A little bit different pattern ( NASDAQ: CRSP ), ( NASDAQ: NTLA ) but they are all up today, with the exception of one, which I will show you in just about 15 stocks.
So you look at all of these stocks ( NASDAQ: TSLA ), ( NASDAQ: CERS ), ( NASDAQ: DKNG ), ( NYSE: NVTA ), ( NYSE: U ), ( NYSE: SQ ), ( NASDAQ: PACB ), ( NYSE: TDOC ), ( NASDAQ: HOOD ), ( NASDAQ: TXG ), ( NYSE: SHOP ), that’s a nice one, ( NASDAQ: BEAM ), ( NYSE: PLTR ), ( NASDAQ: EXAS ), and these are all ( NASDAQ: VERV ), ( NYSE: PD ). And these are all growth stocks, growth-themed stocks. Stocks that the market looks at as having good growth potential right now.
They are not value stocks, stay away from value. If you want to be a value stock owner, just buy some Berkshire, and look at how rich Warren Buffett is. Now, he’s been around, I think he knew Moses. I’m not sure, either Moses or Moses’ son, but he’s been around for a long time. So he’s had an opportunity to amass all this wealth, and that’s fine. My bet is, but I wouldn’t bet much, I’m not really sure that he’s outperformed the market. But again, I am not sure. Nothing against old Dairy Queen boy, love him to death. But with respect to ARK ( NYSEARCA: ARKK ), I would rather own ARK ( NYSEARCA: ARKK ) right now than Berkshire because I think this is going to go higher.
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