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 by Raj Gupta

The market remains in a Confirmed Uptrend. U.S. indices are consolidating gains over the last few weeks, still
holding above support levels, and avoiding distribution. There are currently four distribution days on the S&P
500 and three on the Nasdaq, with each set to lose an additional day next week. The majority of leadership
ideas continue to act well, with most moving higher post earnings. Therefore, we remain constructive on the general
market until we see concerning technical action among leadership ideas and the major averages alike.

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

Our USFL of 59 names gained 1.5% on average this week, outperforming the S&P 500 (0.6%) and the
Nasdaq (0.9%).

By Sector
Earnings continued to play a heavy role in sector performance this week. Cap Equipment names, TNET and
MTZ, gapped up into new highs after reporting better than expected earnings. HEI has yet to report, but remains
actionable after breaking out of a flat base. Health Care ideas also acted well post earnings. RGEN
moved back into new highs, while ABMD reversed off its 50-DMA and is now testing the highs from last week.
Biotech ideas, VRTX and CELG, have pulled back into their respective bases. VRTX is actionable off the 21-
DMA. Retail ideas have also continued higher. BURL, PLAY, and OLLI are trending constructively higher, while
ULTA is emerging from a new base.

Market View

Posted on by Raj Gupta

The market was moved back into a Confirmed Uptrend on Monday after the S&P 500 broke above its downward
trending upper channel line and the Nasdaq broke into all-time highs. Distribution fell to five days on the
S&P and two on the Nasdaq, however no expiration will occur next week. Leadership continues to act well, with
multiple USFL ideas breaking out into new highs on strong earnings results. After such a strong move, consolidation
should be expected. We are looking for the S&P 500 to hold its 50-DMA should this occur.
Stocks on our U.S. Focus List—Current Sentiment
Our USFL of 59 names gained 2.2% on average this week, outperforming the S&P 500 (1.5%) and inline
with the Nasdaq (2.3%).

By Sector
Earnings played a heavy role in sector outperformance this week. Technology ideas continued to move higher,
led by GOOGL, RNG, NOW, WDC, MDSO, and CAVM, all of which reported better-than-expected earnings.
AMZN also gapped up on earnings Friday. Health Care ideas within the USFL were mixed with ALGN and IDXX
gapping up on earnings, and NUVA and CELG pulling back into their respective bases. Banks continue to form
the right side of their respective bases with most still finding resistance along their 50-DMAs. CFG has cleared
above this level of resistance and is now offering an aggressive entry point ahead of new highs.

Market View

Posted on by Raj Gupta

The market status remains Uptrend Under Pressure. There are six distribution days on the S&P 500 with one
set to fall off next week. There are three distribution days on the Nasdaq with one also set to expire next week.
Though the major averages have been unable to rally above resistance, leadership continues to act well. Multiple
ideas are making new highs and there have been few major technical breakdowns among leading names.
However, we are waiting for the S&P 500 to clear above its downward trending upper channel line and for the
Nasdaq to reach new highs before shifting the market back into a Confirmed Uptrend.

Stocks on our U.S. Focus List—Current Sentiment
Our USFL of 59 names (including five additions) gained 2.7% on average this week, outperforming
the S&P 500 (0.8%) and the Nasdaq (1.8%).

By Sector

USFL Retail ideas came under heavy accumulation this week. OLLI, BURL, BABA, and PLAY were the standout
names, each trading at or near new highs. BURL looks set to breakout in the coming days. Capital Equipment
ideas also acted well with MTZ breaking out of a flat base in heavy volume and HEI bouncing off its 50-DMA.
IBP bounced off its 21-DMA and is now trading at an all-time high once again. Banks were able to hold their
March lows after reporting earnings. MS, FRC, WAL, and CFG are all now building the right side of their respective
bases with resistance at their 50-DMAs. Cyclical names came under pressure, with NFLX closing just
under its 50-DMA. Homebuilders also reversed lower and PHM is now testing support along its 50-DMA ahead
of earnings next week.

Market View

Posted on by Raj Gupta

The market status remains Uptrend Under Pressure. Distribution remains relatively low on both the S&P 500 and
Nasdaq, however, no days will expire next week. Further, the S&P 500 and Nasdaq are now both trading below
their respective 50-DMAs for the first time since the election. Leadership, for the most part, has held up well,
though multiple ideas have pulled back into their respective bases after breaking out over the last few weeks.
This warrants a cautious approach until we see support come back into the market. We will be looking
for 2300, or the 100-DMA, to now act as support on the S&P 500.

Stocks on our U.S. Focus List—Current Sentiment
Our USFL of 54 names lost 1.3% on average this week, underperforming the S&P 500 (-1.1%) and the
Nasdaq (-1.2%).

By Sector
Technology was a mixed picture this week. Software/Cloud-related ideas continue to hold up well, with many
bucking the pressure of the general market. RNG, RP, RHT, PAYC, VEEV, and ADBE continue to trade at or
near new highs while MDSO and CRM have constructively pulled back into their respective pivots. Semiconductors,
on the other hand, are now testing their 50-DMAs after pulling back this week. All seven ideas (AMAT,
AVGO, CAVM, IPHI, MCHP, MPWR, MTSI) are now consolidating and forming new bases. Banks (CFG, FRC,
MS, WAL) held March lows but continue to lag the general market. They continue to be in focus with multiple
ideas reporting earnings next week.

Market View

Posted on by Raj Gupta

The market status remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq continue to hold above
their respective 50-DMAs, but have been unable to clear resistance. Distribution now stands at four days on the
S&P 500 and three on the Nasdaq. One additional day is set to expire on the Nasdaq Monday and on the S&P
500 Tuesday. Leadership outside of Banks continues to hold up well, with several making new highs in the face
of market pressure. We view this as constructive internal action, but still need to see the S&P 500 clear above
2390 before moving the market back into a Confirmed Uptrend.

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

Our USFL of 54 names (including three net additions) lost 0.4% on average this week, roughly in-line
with the S&P 500 (-0.3%) and the Nasdaq (-0.6%).

By Sector

Technology ideas across the USFL stood out on the week. Cloud-related companies outperformed, with multiple
ideas hitting new highs. ADBE, RP, PAYC, and VEEV continue to trade constructively near new highs, while new
ideas CRM and MDSO broke out this week. The Banks, on the other hand, continue to lag heading into earnings
next week. They have managed to hold the lows from March, but the RS lines and A/D Ratings continue to
fall. We are looking for a big volume surge back through their respective 50-DMAs to change the current concerning
move lower.

Market View

Posted on by Raj Gupta

The market status remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq retraced last week’s sell-off, bouncing directly off their respective 50-DMAs for the first time since the election. Still, each index remains just below resistance levels (S&P 500: 2390; Nasdaq: 5928) that will need to be cleared before we shift the market back into a Confirmed Uptrend. With distribution falling and leadership continuing to act well, this is likely to occur early next week.

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

Our USFL of 51 names (including two additions) gained 1.6% on average this week, outperforming the S&P 500 (0.8%) and the Nasdaq (1.4%).

By Sector

Banks were able to find support this week, constructively bouncing off January lows, though most still remain below their respective 50-DMAs. FRC and WAL rallied over 3% and now each are sitting just below resistance. A handful of Retail ideas within the list acted well, with OLLI breaking out on earnings, PLAY holding its pivot after an initial earnings move lower, and continuing into new highs. AMZN also broke out from consolidation and quickly became extended above its pivot. Commercial Services ideas CRTO and WAGE lagged on the week. CRTO continues to hold trend, while WAGE is still holding above longer-term support at $70.

Market View

Posted on by Raj Gupta

The market status remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq retraced last week’s sell-off, bouncing directly off their respective 50-DMAs for the first time since the election. Still, each index remains just below resistance levels (S&P 500: 2390; Nasdaq: 5928) that will need to be cleared before we shift the market back into a Confirmed Uptrend. With distribution falling and leadership continuing to act well, this is likely to occur early next week.

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

Our USFL of 51 names (including two additions) gained 1.6% on average this week, outperforming the S&P 500 (0.8%) and the Nasdaq (1.4%).

By Sector

Banks were able to find support this week, constructively bouncing off January lows, though most still remain below their respective 50-DMAs. FRC and WAL rallied over 3% and now each are sitting just below resistance. A handful of Retail ideas within the list acted well, with OLLI breaking out on earnings, PLAY holding its pivot after an initial earnings move lower, and BURL continuing into new highs. AMZN also broke out from consolidation and quickly became extended above its pivot. Commercial Services ideas CRTO and WAGE lagged on the week. CRTO continues to hold trend, while WAGE is still holding above longer-term support at $70.

Market View

Posted on by Raj Gupta

The market remains in a Confirmed Uptrend, with three distribution days on the S&P 500 and Nasdaq. The total count remains low, though no distribution days will expire for over two weeks. The S&P 500 and Nasdaq are each holding support along their respective 21-DMAs as leadership ideas continue to surface. Removals from the list were largely isolated to one group. Therefore, we remain positive on the general market as long as these short-term levels of support continue to hold, and distribution remains under control.

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

Our USFL of 48 names lost 0.6% on average this week, underperforming the S&P 500 (-0.4%) and the Nasdaq (-0.1%).

By Sector

For a third straight week, Health Care ideas within the USFL outperformed. UNH and CELG remain actionable, while IDXX, ALGN, and NUVA continue to trend into higher highs. Home builders are breaking out across the board, with many becoming quickly extended. PHM quickly moved 5% above its $22 pivot, but can be added to on pullbacks to its 21-DMA. Semiconductors, which have slowed in recent weeks, rallied Friday sending SOXX into new highs. New addition, CAVM, remains actionable, while AVGO and AMAT continue to hit new highs. Conversely, the Mobile Manufacturing and RV industry group took a big hit this week after THO reported earnings. PATK and LCII were subsequently removed from the list.