Stocks advanced for another week, primarily driven by Wednesday’s consumer price index (CPI) report.
The CPI rose less than expected, confirming that inflation has peaked and is finally showing signs of cooling.
This bullish data sent the S&P 500 up 2.1% for the day on 93% advancing volume.
That does not mean this is an easy market yet… Stocks remain choppy, and breakouts are still somewhat hit-or-miss.
Two of the stocks I added to last week’s Watchlist — Krystal Biotech, Inc. (KRYS) and Xenon Pharmaceuticals Inc. (XENE) — advanced 10%-15% each from their breakout points before pulling back over the next several days.
Until we stop seeing this kind of activity, I suggest taking profits quicker than usual and selling pieces of your positions into strength to nail down profits on the way up.
With that in mind, here are the three new ideas I’m monitoring this week…
Murphy USA Inc. (Long Idea)
Don’t mistake Murphy USA Inc. (MUSA) for an oil stock. Although this company sells gas, it is in the convenience store business.
And business is booming…
Sales have increased by roughly 50% in each of the last four quarters, and earnings are up even more.
The stock is ranked #1 in its industry group, and Investor’s Business Daily gave it a 99/100 composite rating.
MUSA has formed a tight pivot area over the last three weeks with resistance at $291 and is beginning to breach this area as of Friday morning.
Traders interested in the stock might consider a tight stop below the consolidation area.
RxSight, Inc. (Long Idea)
RxSight, Inc. (RXST) is a name I have been watching for several months…
The stock went public this time last year and has yet to trade above its initial price for more than a couple of days.
There is likely lots of supply near the $16 level, which is why the stock has stalled there for the past couple weeks.
Pullbacks are getting shallower, however, and there are noticeable signs of accumulation in the volume bars beneath the chart.
If shares can break out above $16 on above-average volume, RXST could make a nice move.
Seagen Inc. (Long Idea)
Seagen Inc. (SGEN) is a large-cap biotech stock showing lots of strength over the last two months…
Shares rose over 30% in June before consolidating and forming a pivot near $182.
Pullbacks have been minimal after its most recent surge, and volume is drying up nicely.
I’ve had SGEN on the Watchlist before, but it never hit our entry trigger.
If SGEN can power through the $182 area, a signal that sellers have been exhausted and supply is no longer coming to market, I’d expect a strong move higher.
Fly Under the Radar
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Embrace the surge,
Editor, Stock Surge Daily