Author: Raj Gupta

Raj Gupta is Director, Research Analyst. After joining the firm in 2002 as a research analyst, Raj was appointed senior equity analyst in 2006, and lead senior equity analyst in 2014—largely because of his ability to select outperforming stocks. He acts as an expert in the O’Neil Methodology and contributes to the direction of product and service line development. He recommends securities for addition to or removal from the U.S. Focus List, or USFL, and the associated alerts to clients. During his tenure, he was part of the leadership that developed the Global Focus List, which marked the firm’s successful expansion into international equity recommendations. He is also a lead on the IPO Rewind report and contributes to weekly summaries on the performance of the U.S. market. Much of his expertise is delivered as highly customized service to clients. RAj earned his Bachelor’s degree in Economics from the University of California, Santa Barbara. He began working at the firm directly out of college, driven by his passion for investing and stocks. An avid soccer player, he built and managed an adult league in the Los Angeles area, in which he still plays. He also enjoys international travel; he and his wife commit to at least one major adventure a year.

Market View

Posted on June 22, 2018February 1, 2019 by Raj Gupta

Market Overview

The U.S. market remains in a Confirmed Uptrend. The S&P 500 is holding support at 2743, while the Nasdaq
remains just 1% off all-time highs. Distribution is elevated, however one day did expire at the close Friday to take
the count back down to six on the S&P 500. Another distribution day is also set to expire at the close Tuesday.
Leadership is mixed with the majority still holding up well. Software ideas, however, did take a hit this week,
pulling back off extended levels and likely set to consolidate gains over the next several weeks. Going forward,
we will be looking for the market to avoid further distribution and for the majority of leading ideas to continue
holding above short-term levels of support.

By Sector

We did see early signs of rotation to close the week. Energy, which has been lagging over the past month, ral-
lied on Friday. FANG and CLR both regained their respective 50-DMA, while WRD is attempting to regain that

same level. NEP also broke out into a new YTD high on Friday, before pulling back at the close. Financial also
fared well this week, with Payment Processors still leading. FLT broke out after being added to the S&P 500,
while MA, V, PYPL, SQ, and WP remain at or near new highs. Banks still remain mostly sideways. Health Care
ideas also continue to stand out, as the majority of USFL ideas held their ground despite the general market
pullback. EW, PRAH, ILMN, ABMD, IDXX, and ALGN all remain at or near new highs. VRTX is also now rounding

out the ride side of a new base after trading below both its 50- and 200-DMA over the last few weeks. Con-
versely, USFL software ideas pulled back after big runs over the past month. RHT gapped down ~14% post

earnings, while SPLK and RP both broke their respective 50-DMA on very heavy volume. Most other ideas includ-
ing RNG, NOW, ADBE, TYL, and TEAM are pulling back off all-time highs and now testing support at the 50-

DMA.

Swedish Orphan Biovitrum

Posted on June 20, 2018February 1, 2019 by Raj Gupta

The stock is building the right side of a seven-week flat base. We recommend adding to current positions here. Support is the rising 50-DMA. Resistance is SEK 194.75.

Technical ratings: RS line is at an all-time high, RS Rating of 93, and A/D Rating of B.

Fundamental ratings: EPS Rank of 99, SMR Rating of A, and Composite Rating of 98

Market View

Posted on June 15, 2018June 19, 2018 by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 is hitting resistance just below 2800, while the Nasdaq continues to trade near all-time highs. Distribution remains elevated, however multiple days expire on both indi-ces next week. Despite the lag in the S&P 500, leading ideas continue to show constructive action. Multiple names across several sectors and market caps are making higher highs after breaking out over the last month. Therefore, we continue to recommend buying ideas at risk optimal levels until we see more concerning technical action. We will remain positive on the general market until we see a further pick up in distribution that results in the major averages breaking below shorter-term moving average support.

Stocks on our U.S. Focus List: Current Sentiment

Our USFL of 72 ideas gained 1.6% on average this week, outperforming the S&P 500 (flat) and the Nasdaq (+1.3%).

USFL ideas weekly earnings line-up:
Tuesday: Close: FDX
Thursday: Close: RHT

By Sector

Technology and Health Care ideas on the U.S. Focus List led this week. Despite choppy daily action, software ideas continue to trend higher. PAYC regained its 50-DMA and ATVI rallied all the way back to all-time highs where it is now hitting some resistance, while VEEV, NOW, QTWO, RHT, and TYL all made new highs. The ma-jority of Health Care ideas on the USFL are now extended, including ABMD, ALGN, EW, IDXX, and ILMN which are all trading at all-time highs. PRAH and UNH remain actionable. Oil & Gas and Bank ideas on the USFL lagged again this week. WRD and CLR both broke their 50-DMA on Friday, while FANG continues to lag, trad-ing around its 200-DMA. Among Banks, ZION traded back below its 50-DMA on Friday, while TCBI and WAL pulled back to that same level. SIVB remains the leader, still trading near all-time highs.

PRA Health Sciences

Posted on June 12, 2018February 1, 2019 by Raj Gupta

Key points from the report:

The stock cleared above resistance at $90, turning actionable. We recommend buying shares here as the stock forms the right side of a 20-week consolidation.
Support is at $80 and resistance is at ~$96.
Technical ratings: Rising RS line, RS Rating of 65, and A/D Rating of C+ (improving over the last six weeks).
Fundamental ratings: EPS Rank of 96, SMR Rating of A, and Composite Rating of 94.

Market View

Posted on June 8, 2018June 19, 2018 by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 broke out of a four-week trading range this week and is now set to test resistance at ~2,800, while the Nasdaq broke into a new all-time high. Distribution stands at five days on each index with no expiration next week. Leadership, despite a big pullback on Thursday, remains healthy as the majority continues to hold above prior pivots or key moving-average support. We maintain our positive view on the general market and continue to recommend buying high quality ideas at exact pivot points or areas of support, and avoid chasing ideas that become too far extended from risk-optimal entry points.

Stocks on our U.S. Focus List: Current Sentiment

By Sector

Retail ideas on the U.S. Focus List led this week. FIVE gapped up more than 20% on earnings following a similar move from LULU last week. OLLI and HOME also reported good quarters and both moved back into new highs. HD continues to con-structively form the right side of a new base and remains actionable. WING, AMZN, and BABA are also trading at or near new highs. Financial ideas also rallied this week, with Regional Banks TCBI, ZION, and WAL at new pivot points and Pay-ment Processors MA, V, and SQ all hitting new highs. PYPL and GPN both remain actionable as they approach prior highs. Conversely, Technology ideas, after leading over the last two weeks, pulled back on Thursday. MKSI gapped down below its 200-DMA, while software ideas RP, NOW, RNG, TYL, VEEV, and TEAM pulled back off recent new highs but remain intact as they hold above 50-DMA support.

New Ideas or Deletions

No changes were made to the U.S. Focus List this week.

Edwards Lifesciences

Posted on June 1, 2018February 1, 2019 by Raj Gupta

The stock is currently actionable as it breaks above resistance at $140. We recommend buying now and adding to positions as the stock clears above $143.22. Technical ratings: RS line trending higher, RS Rating 75, A/D Rating D+, but improving over the last month. Fundamental ratings: EPS Rank 94, SMR Rating A, Composite Rating 94.

Market View

Posted on June 1, 2018June 19, 2018 by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 remains range-bound above its 50-DMA, while the Nasdaq is now approaching a new all-time high. Distribution remains elevated, however multiple days expire next week. Leadership remains healthy with many ideas hitting new highs across multiple sectors. We maintain our positive view on the general market as long as the S&P 500 remains above its 50-DMA.

Stocks on our U.S. Focus List: Current Sentiment

By Sector
Technology ideas on the U.S. Focus List led for a second straight week. Multiple names found support at their 50-DMA including GRUB, PSTG, GOOGL, NVDA, NOW, ON, and SPLK. Other ideas continue trade at new highs including TEAM, ADBE, CRM, MPWR, and TYL. Internet-Retail has also been very strong with both AMZN and BABA breaking back into new highs. Health Care ideas continue to trend higher with ABMD, ALGN, ILMN, and IDXX all reaching new highs, and EW breaking above resistance on Friday and turning actionable. Financial ideas are mixed. Payments continue to act well with PYPL, SQ, MA, and V all trading at or near new highs, while Banks remain under pressure. MS is now trading below its 200-DMA, while ZION, WAL, and TCBI are all at-tempting to hold support along their respective 50-DMA.

New Ideas or Deletions
No changes were made to the U.S. Focus List this week.

Market View

Posted on May 25, 2018June 19, 2018 by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to trade in a tight range above their respective 50-DMA. The S&P 500 does have an elevated distribution day count, however, one day expires at the close Tuesday and two more fall off the week after. Leadership remains healthy with many ideas still hit-ting new highs, while the majority are forming the right side of their respective bases. We maintain our positive stance on the general market.

Stocks on our U.S. Focus List: Current Sentiment

Our USFL of 72 ideas (one addition) gained 0.1% on average this week, underperforming the S&P 500 (+0.3%) and the Nasdaq (+1%).

By Sector

Technology ideas on the U.S. Focus List led this week. ON and MRVL both regained their respective 50-DMA, while ADBE and MPWR both moved into new highs. Multiple other Technology ideas are now bouncing off their respective 50-DMA including RHT, NOW, and NVDA. Health Care ideas also continue to act well, with ABMD, ALGN, SUPN, and UNH all testing all-time highs. Conversely, Energy pulled back sharply to close the week. FANG gapped down below its 50-DMA and is now testing its lower channel line. CLR pulled back to its 50-DMA, while WRD is now consolidating more than 10% off all-time highs.

Market View

Posted on May 18, 2018May 18, 2018 by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq are consolidating the last two weeks of gains, holding above their respective 50-DMA. Meanwhile, the Russell 2000 broke out into new all-time highs. Distribution did rise this week, but we will begin to see expiration next Thursday. Leadership continues to act well, with multiple ideas across the U.S. Focus List trading at new highs. We maintain our positive stance on the general market.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 71 ideas (one addition) lost 0.2% on average this week, outperforming the S&P 500 (-0.5%) and the Nasdaq (-0.7%).

By Sector
Retail ideas on the U.S. Focus List led this week. OLLI jumped more than 5% on the week back into all-time highs and is now extended from an ideal pivot. LULU reached a new century mark and also remains extended. HOME continues to trend higher off its 21-DMA, while FIVE bounced off its 50-DMA, turning actionable. Health Care ideas also performed well with ABMD, ALGN, and ILMN all reaching new highs. UNH also found support at its 50-DMA and remains actionable. Technology ideas pulled back this week. Software ideas RHT and NOW pulled back to their respective 50-DMA, while PAYC pulled back to its 100-DMA. Internet-Content names GOOGL and WUBA also pulled back to their respective 50-DMA. Conversely, MPWR, PSTG, and SPLK remain at or near new highs.

New Ideas or Deletions
We added Weight Watchers Intl to the U.S. Focus List this week.

Market View

Posted on May 11, 2018May 11, 2018 by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq are both trading above their respective 50-DMA, while the Russell 2000 is trading at all-time highs. Leadership is broadening with 10 of 11 sectors now trading above their respective 50-DMA and multiple ideas reaching new highs this week. Going forward, we will be looking for the major averages to hold support along the 50-DMA and avoid distribution. We are also look-ing for the U.S. Focus List count to increase and for breakouts to progress further into new highs. With market conditions improving, we recommend putting additional capital to work with a focus on high relative strength ideas from leading and/or improving industry groups.

sStocks on our U.S. Focus List: Current Sentiment

Our USFL of 70 ideas (one net removal) gained 3.5% on average this week, outperforming the S&P 500 (2.4%) and the Nasdaq (2.7%).

By Sector

Technology and Health Care ideas on the U.S. Focus List led this week. Within Health Care, multiple ideas broke out including SUPN which became quickly extended after Friday’s move. ABMD also continues to hit new highs each day and remains extended. ALGN reached a new pivot Friday, turning actionable, while ILMN and IDXX remain at pivot points. Within Technology, software ideas are the clear leaders. TEAM, SPLK, VEEV, ADBE, NOW, CRM, and RHT among others are all trading at new highs after coming under heavy accumulation this past week. Retail ideas, which had been leading with Energy prior to this week, are now consolidating gains. WING, FIVE, and LULU pulled back off highs, while HOME and OLLI continue to trend higher.