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Watchlist Update: Is the Market Low Already In?

The lows that the S&P 500, Nasdaq 100 and Dow Jones all made on May 20 continue to hold.

Since then, we’ve seen a valid follow-through day on May 26 and strong action that week.

Daily Chart of S&P 500 Index – Source: TradingView

Last week, the indexes were largely unchanged. As I’m writing this on Friday morning, the S&P and Nasdaq are flat to slightly lower for the week.

I’m happy to see recent gains are holding.

But for the coming week, I would like to see additional accumulation. In other words, I want to see stocks move up on increased volume.

Breakouts as a whole have been performing much better over the last couple of weeks.

As I’ve been talking about recently, we purchased Permian Basin Royalty Trust (PBT) in my Alpha Stocks research service on May 17, and shares soared 33% in just two weeks following a clear breakout.

Other names have also shown good progress.

So, unless the May 20 low is breached and the market begins another leg lower, I am now bullish on the market and looking for long trades.

Here are the three ideas I’m watching this week, all of which are setting up with clear horizontal breakout boundaries…

Howmet Aerospace Inc.

Howmet Aerospace Inc. (HWM) is a $15 billion specialty industrial company that engineers metal products for the aerospace and transportation industries across the globe.

The company is a major supplier for Boeing (BA).

Here’s how the chart is setting up…

Daily Chart of Howmet Aerospace Inc. (HWM) – Source: TradingView

And here’s how the stock is setting up with my Stock Surge Indicator (SSI)…

  • Surge score: 91/100
  • % Above 52-wk low: 36%
  • Sales growth: +10%
  • Return on Equity: 9%
  • Triple momentum: yes

As you can see in the chart above, HWM is completing a large “cup with handle” pattern.

This is a 13-month base, so it could lead to a sustained move higher if shares can break out on good volume.

Relative strength (RS) has been climbing all year, and the RS line has made nine new highs since May.

I’m looking for a strong move through $37.50 to signal a buy. Consider working a stop beneath the 21-day moving average at $34.70.

Enact Holdings, Inc.

Enact Holdings, Inc. (ACT) is a $4 billion private mortgage insurance company and a recent initial public offering (IPO) that is consolidating nicely at its highs.

I like trading newer issues since the first breakout can lead to a strong move to the upside.

Here’s how the chart is setting up…

Daily Chart of Enact Holdings, Inc. (ACT) – Source: TradingView

And here’s how the stock is setting up with my SSI…

  • Surge score: 94/100
  • % Above 52-wk low: 36%
  • Sales growth: -&%
  • Return on Equity: 14%
  • Triple momentum: yes

ACT is unique compared to most new issues in that it never undercut its initial price.

Most IPOs trade lower, sometimes significantly lower, after going public.

But ACT’s ability to hold up after its debut, especially in these market conditions, is a good sign of strength.

Consider buying ACT if it makes a new high. My buy trigger would be $24.90 with a stop at $22.85.


FLEX LNG Ltd. (FLNG), with a market cap of $1.6 billion, builds and operates carrier vessels to transport liquefied natural gas.

The oil and gas sector continues to lead the market, so it is not surprising that FLNG keeps coming up on my strength scans.

Here’s how the chart is setting up…

Daily Chart of Enact Holdings, Inc. (ACT) – Source: TradingView

And here’s how the stock is setting up with my SSI…

  • Surge score: 98/100
  • % Above 52-wk low: 163%
  • Sales growth: -8%
  • Return on Equity: 19%
  • Triple momentum: yes

After a big run higher in March, shares have consolidated over the last eight weeks.

Thursday saw a big up day on three times average daily volume as FLNG broke through resistance.

Consider buying at current levels, and use a 10% stop loss.

Follow the Insiders

Just because we’ve identified a near-term bottom doesn’t mean we don’t need to be careful about which long trades we take and where we enter them.

If this is the real market bottom, we should start to see massive buying by institutions.

These are hedge funds, pension funds, endowments and other trillion-dollar organizations that are going to start scooping up stocks at value levels.

When they put their money to work, following their lead can pay off big time.

This is exactly what I focus on in my premium Stealth Trades research service.

If you’re interested in learning more, click here now to view my latest presentation.

Embrace the surge,

Ross Givens
Editor, Stock Surge Daily

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Ross Givens
Ross Givens

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