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Watchlist Update: Seeing Signs of Stealth Buys

As I write this on Friday morning, the Nasdaq is up roughly 2% for the week. 

The S&P 500 recorded four positive days in a row to start the week, and we are beginning to see signs of institutional buying.

Thursday was an 88% up-volume day, meaning 88% of the volume was on the advance. 

I’ve been waiting for a 90% up-day to signal that the low is in, and this was darn close…

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Daily Chart of S&P 500 Index with Market Breadth & Volume Indicators – Source: TradingView

The same areas of the market I have been highlighting over the last few weeks continue to show strength – mainly biotechnology and solar stocks.

If you took the trade in Chinook Therapeutics, Inc. (KDNY) from last week’s Watchlist, you should have seen a nice quick gain as the stock surged 13% in just three days. 

Alpha Stocks members took the trade and already locked in partial profits.

Stay Cautious

Make no mistake… The market is not out of the woods yet, and this may end up being nothing more than a tradeable rally. 

But I have started to increase exposure in my personal account. 

If I see decent gains in these pilot positions, I will continue to buy news setups and increase my size accordingly.

With that in mind, I have three new long trades to share with you this week…

Sierra Wireless, Inc. (Long Idea)

Sierra Wireless, Inc. (SWIR) is a Canadian designer of wireless and embedded modules, gateways and routers.

Computer networking stocks are not showing strength as a group, but SWIR has a Surge Score of 99/100. 

In other words, it is outperforming 99% of stocks.

Earnings and sales were both up big last quarter, and analysts are calling for further growth through 2023. 

TradingView Chart
Daily Chart of Sierra Wireless, Inc. (SWIR) – Source: TradingView
  • Surge score: 99/100
  • % Above 52-wk low: 86%
  • Sales growth: +60%
  • Return on Equity: N/A
  • Triple momentum: yes 

The chart looks great as well. The up/down volume ratio is incredibly bullish at 1.86, and institutional buyers are flocking to the stock.

SWIR has formed a pivot at the $25 level. 

In a perfect world, it would trade sideways here for a few days to absorb any sellers near the highs. 

That would make it an even higher conviction buy for me. 

But demand for this stock is high. Consider buying on new highs with a 10% stop.

Seagen Inc. (Long Idea)

Seagen Inc. (SGEN) is a biotech that has come ripping off the lows. 

Shares are up 70% in just six weeks, with almost no pullbacks along the way.

TradingView Chart
Daily Chart of Seagen Inc. (SGEN) – Source: TradingView
  • Surge score: 96/100
  • % Above 52-wk low: 71%
  • Sales growth: +28%
  • Return on Equity: N/A
  • Triple momentum: yes 

At this point, price has been consolidating for almost two weeks near the $180 level. 

There is also a fundamental catalyst in play… 

Reuters reported that Merck & Co., Inc. (MRK) is in advanced talks to buy Seagen at a price above $200 per share – more than 10% above where it trades today.

Consider buying SGEN above $182 with a stop at $167.

United Therapeutics Corporation (Long Idea)

United Therapeutics Corporation (UTHR) is another biotech stock showing tremendous strength as the general market is coming off its lows.

The stock is just entering Stage 2 and currently trades just 1% off its all-time high. 

Price action is tightening, pullbacks are becoming shallow and volume dried up for several days. 

This is exactly what we want to see pre-breakout…

TradingView Chart
Daily Chart of United Therapeutics Corporation (UTHR) – Source: TradingView
  • Surge score: 97/100
  • % Above 52-wk low: 51%
  • Sales growth: +22%
  • Return on Equity: 20%
  • Triple momentum: no

The fundamentals are also strong… Unlike many biotech stocks, which have limited revenue and negative earnings, United Therapeutics is showing solid growth in both areas. 

Earnings and sales grew by 44% and 22%, respectively, in the most recent quarter.

This stock is a potential market leader that could make a large advance if the market has indeed found the bottom. 

Consider buying UTHR here with a stop at $220.

Big Buyers Coming Back

As I mentioned above, we are finally starting to see some signs of institutional buying in this market… 

This is a big deal for a potential market turnaround.

Institutional investors like pension funds, mutual funds, hedge funds and other large players make massive institutional buys that fly under the radar of most individual investors.

But if you know how to spot those buys in real time, you can potentially follow the big money to big gains.

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

Look, if you haven’t been making money in these markets, it’s time to try something new…

Take a few moments to click here and watch my brand new Stealth Trades video bulletin…

Embrace the surge,

Ross Givens
Editor, Stock Surge Daily

Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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