Stocks sold off hard on Friday after Federal Reserve Chairman Jerome Powell made remarks about taking aggressive action on interest rates.
He was clearly setting the tone for a 75-basis-point (0.75%) rate hike at the next meeting, which the market was obviously not anticipating.
Even though we expected this pullback from the 200-day moving average, it does not make it fun to live through…
The S&P 500, represented by the SPDR S&P 500 ETF Trust (SPY) above, has now pulled back 5% from its August high and could fall a few percentage points more.
This does not change my stance on the market… I believe the low is in and that we are in the early stages of a new bull market.
So, unless we see signs of institutional selling, I will continue to focus on stocks to buy.
Here are three names I’m watching this week…
AstraZeneca PLC (Long Idea)
I don’t often gravitate to big mega-cap names like AstraZeneca PLC (AZN), but this one is setting up beautifully.
After a strong first quarter, shares began to consolidate and have been forming a base for over four months now.
Pullbacks have shallowed, and there is clear resistance near the $68 mark.
Institutions are also building positions in the stock. The number of funds that own AZN grew from 883 to 932 last quarter.
The stock is now trying to push through resistance. If it does, it could make a strong move.
Resources Connection, Inc. (Long Idea)
I added Resources Connection, Inc. (RGP) to the Watchlist last week but it has not yet broken resistance.
The company provides accounting, finance and human resources consulting services from 63 offices across the country.
This sector of the market is currently very strong, ranking in the top 7% of all groups.
After forming a large base from November to June, shares surged on huge volume to advance 20% in a week.
Price then tightened again, forming a wedge pattern that I’ve outlined in the chart above.
This stock is also seeing a lot of accumulation volume.
The big green volume bars on the bottom of the chart are signs of institutional buying, which as we know is the true driver of stock prices.
Watch for a move above $22, as this could trigger the next surge higher in RGP.
PROCEPT BioRobotics Corporation (Long Idea)
PROCEPT BioRobotics Corporation (PRCT) is a medical equipment company focused on the treatment of benign prostatic hyperplasia.
The stock went public in September of last year and has yet to trade above its initial push up to the $47 area.
For the last several months, price has held above the 21-day moving average while volume is declining.
If the stock makes a move above $46.00 on good volume, it could lead to a nice rally.
Fly Under the Radar
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…
Embrace the surge,
Editor, Stock Surge Daily