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 September 14, 2018February 1, 2019 by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 held support at its 21-DMA this week while distribution
fell to just two days due to expiration. The Nasdaq held its 50-DMA and currently has five distribution days. Both
indices will lose an additional distribution day next week. Leadership continues to act well, with new ideas also

breaking out from consolidation over the past week. Despite positive price volume action in both the major av-
erages and individual ideas, we recommend reducing risk in stocks that have rallied 20-25% above later stage

pivot points. We will change our current positive view on the market should we begin to see technical deteriora-
tion in leading ideas coupled with additional distribution in the major averages

Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 77 ideas gained 2.1% on average this week, outperforming the S&P 500 (1.2%) and the Nasdaq
(1.4%).
Actionable Focus List ideas: Activision Blizzard ( ATVI ), Align Technology ( ALGN ), Autodesk ( ADSK ), Calavo
Growers ( CVGW ), Centennial Resource Dvlp ( CDEV ), Chefs’ Warehouse ( CHEF ), Envestnet ( ENV ), Fidelity Natl
Info Svcs ( FIS ), Home Depot ( HD ), Intuit ( INTU ), Nextera Energy ( NEP ), Nvidia ( NVDA ), Old Dominion Freight
Line ( ODFL ), Palo Alto Networks ( PANW ), Paypal ( PYPL ), PRA Health Sciences ( PRAH ), Q2 Holding ( QTWO ),
Realpage ( RP ), Servicenow ( NOW ), Splunk ( SPLK ), SVB Financial ( SIVB ), Vertex Pharmaceuticals ( VRTX ), Zoetis
( ZTS )

Sector
Technology ideas within the U.S. Focus List led this week. Nineteen of 30 ideas hit a new high, including ATVI,

ADBE, AMD, BL, CRM, GRUB, MTCH, PAYC, RP, and TEAM. Though AMD, PAYC, and TEAM are now well ex-
tended from moving average support, ATVI and RP just turned actionable after breaking out this week. Energy

ideas also rallied, led by new addition CDEV which is breaking out from a 17-week cup. CLR and FANG are still

looking to regain their respective 50-DMA as they build new bases. Though Banks remain under pressure, Pay-
ment Processors within Financial continue to show positive technical action. GPN, MA, PYPL, SQ, V, and WP are

all trading at or near new highs. Conversely, though Retail remains a long-term leading sector, multiple ideas
on the U.S. Focus List have begun to consolidate after big gains over the last several weeks. FIVE, LULU, OLLI,
and WING are consolidating at highs, while HOME continues to decline and is now trading below its 200-DMA.

Asahi Intecc

Posted on September 13, 2018February 1, 2019 by Raj Gupta

Key points from the report:

The stock broke out of an eight-month consolidation into all-time highs on 2.7x average daily volume, turning actionable.

Support is the 200-DMA at ~¥4040. The stock becomes extended above ¥4782.

Technical ratings: RS line is at a new high, RS Rating 92, A/D Rating A.

Fundamental ratings: EPS Rank 74, SMR Rating B, Composite Rating 96.

Market View

Posted on September 7, 2018February 1, 2019 by Raj Gupta

Market Overview

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back off highs during the first
week of September and continue to digest strong gains from August. Increasing distribution has caused the
Nasdaq to break slightly below its 21-DMA, while the S&P 500 is testing this moving average. The rising 50-
DMA is the next level of support for both indices. The majority of growth ideas have pull back off highs and/or are consolidating above key support levels. Despite the rise in distribution, leadership remains intact. We maintain a bullish outlook as long as indices and leading stocks exhibit constructive price action and hold above key support levels.

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

Our USFL of 77 ideas lost 1.4% on average this week, underperforming the S&P 500 (-1.1%) and outperforming
the Nasdaq (-2.6%).

By Sector

Retail ideas were up 3% on average this week, led by FIVE, which gapped up +13% on earnings. OLLI also re-
ported better-than-expected earnings and continues to trend higher. WING remains a leader in the restaurant group, while HD is actionable from a flat base consolidation. Within Staples, MKC is quietly trending higher as CVGW is emerging from cup-with-high handle after positive earnings results. A majority of Technology ideas pulled back or are consolidating, however PSTG and BL broke out into new highs and are extended. QTWO isbreaking out from flat base consolidation and remains actionable. Health Care lagged significantly, down 1.5% on average, however most ideas, including IDXX and ALGN, have either pulled back into support or continue to consolidate.

Market View

Posted on August 31, 2018February 1, 2019 by Raj Gupta

Market Overview

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq are consolidating near all-time highs after accelerating the last two weeks. Distribution remains low with three days on the Nasdaq and two on the S&P500. Leadership remains intact, with strong price action across multiple groups, including payment processors, med-tech, and software. We maintain a positive outlook on the market.

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

Our USFL of 77 ideas gained 1.8% on average this week, outperforming the S&P 500 (+0.9%) and slightly lag-
ging the Nasdaq (+2.1%).

By Sector

Ideas across Capital Equipment, Health Care, Financial, and Retail were up more than 2% on average. HEI, within the Capital Equipment sector, gapped up 12% into new highs after better-than-expected earnings results. Payment processors remain one the best industry groups in the Financial sector, led by SQ, MA, and V. LULU gapped up on earnings, while OLLI broke out into new highs ahead of earning results on Wednesday. Health Care ideas, VRTX and ALGN, are actionable after moving into a pivot area on constructive price action. Transportation ideas remain weak, as ZTO pulled back below its 100-DMA.

Idexx Laboratories

Posted on August 30, 2018February 1, 2019 by Raj Gupta

Key points:

The stock is breaking out of a 16-week ascending base into new highs. We recommend adding to current positions between $252 and $265. Support is at the rising 50-DMA (~$238).
Technical ratings: RS line is new high, RS Rating 93, A/D Rating B+.
Fundamental ratings: EPS Rank 90, Composite Rank 93.

Align Technology

Posted on August 30, 2018February 1, 2019 by Raj Gupta

Key points:

The stock broke out of a five-week flat base, turning actionable. We recommend adding to current positions between $385 and $404. Support is at ~$341.

Technical ratings: RS line at all-time highs, RS Rating 95, A/D Rating B-.

Fundamental ratings: EPS Rank 97, top SMR Rating of A, best Composite Rating of 99.

Vertex Pharmaceuticals

Posted on August 28, 2018February 1, 2019 by Raj Gupta

Key points:

The stock is building the right side of a new base. It is actionable as it breaks above resistance at ~$180. We recommend buying more shares as the stock breaks into all-time highs above $183.39. We would like to see greater-than-average volume as the stock clears resistance.

Technical ratings: RS line trending high, RS Rating 78, A/D Rating C.

Fundamental ratings: EPS Rank 75, top SMR Rating of A, Composite Rating 93.

Market View

Posted on August 24, 2018February 1, 2019 by Raj Gupta

Market Overview

The U.S. market is in a Confirmed Uptrend. Indices are at all-time highs. Distribution is low with only three days on the S&P 500 and Nasdaq, with one day expiring on each index next week. Leadership remains constructive, with multiple groups and stocks breaking out into new highs. We maintain a positive outlook on the market and recommend buying or adding high quality stocks emerging from sound bases.

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

Our USFL of 77 ideas gained 4% on average this week, outperforming the S&P 500 (+0.9%) and the Nasdaq (+1.7%).

By Sector

U.S Focus List ideas across Technology and Retail contributed to the significant outperformance this week. Technology led due to massive earnings gap ups in ADSK, VEEV, and PSTG. ANET jumped more than 12% on news of being added to the S&P 500. BL and NVDA are emerging from a consolidation and are actionable. In Retail, OLLI, FIVE, and LULU broke into new highs. LULU (8/30) and OLLI (9/5) report earnings soon. BABA was an outlier in Retail; the stock hit resistance and reversed lower on in-line earnings results. Although Financial ideas were relatively flat, payment processors, led by V, MA, and SQ, continue to trade at or near new highs. Energy and Transportation ideas were among the weakest, as they consolidated in sideways fashion for the week.

Market View

Posted on August 17, 2018February 1, 2019 by Raj Gupta

Market Overview

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq held support along their respective 50-
DMA this week. Distribution remains relatively low at four days on the S&P 500 and three on the Nasdaq, with
one day expiring on the S&P 500 next week. Leadership remains mixed. There are a select few ideas that continue
to trade at or near highs, however the majority remain rangebound, consolidating over the last several
weeks. To remain positive, we need to see the 50-DMA continue to hold as near-term support over the next few
sessions.

Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 70 ideas lost 0.4% on average this week, underperforming the S&P 500 (+0.6%) and the Nasdaq
(-0.3%).

By Sector

Retail ideas on the U.S. Focus List led this week. WING advanced into higher highs following its earnings
breakout two weeks ago. FIVE and LULU are moving back toward new highs after finding support at their respective
50-DMA, while OLLI found support at its 100-DMA as it builds the right side of a new base. Technology
ideas traded in mixed fashion. PAYC, TEAM, and RNG remain extended, while new additions ALRM and WDAY
broke out into new highs this week. This, while other ideas, including ATVI, ADBE, and NOW, consolidate below
their respective 50-DMA. Energy remains under pressure following a big pullback on Wednesday. FANG broke
its 200-DMA on heavy volume, while CLR continues to consolidate ~10% off highs.

Market View

Posted on August 10, 2018February 1, 2019 by Raj Gupta

Market Overview

The U.S. market is in a Confirmed Uptrend. Despite the pullback on Friday, the majority of growth ideas held up well, with multiple recent IPOs also breaking out into new highs. Further, small-cap indices, including the S&P 600 and Russell 2000, also held up well relative to the other major averages, indicating a further rotation into U.S.-based ideas. Overall, despite choppy market conditions, we maintain our positive view as the major averages remain above moving average support with a low number of distribution days.

Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 69 ideas gained 1.1% on average this week, outperforming the S&P 500 (-0.2%) and the Nasdaq
(+0.3%).

By Sector

Software ideas on the U.S. Focus List led this week. RNG, TEAM, VEEV, and PAYC are all trading at or near new highs, while RP, NOW, TYL, and ADSK all regained their respective 50-DMA. Retail names also rallied, led by AMZN which continues to make new highs, as well as FIVE and LULU, which both found support around their respective 50-DMA. Conversely, with the exception of WP and SQ, the majority of Financial ideas lagged this
week, including WAL, ZION, TCBI, and SCHW, which are all testing the low end of long-term support.