[stocks] Market Minutes – Relative Strength Stocks in a Weak Market

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Below is a past issue of Morpheus Market Minutes, your free daily market analysis and top picks for swing trading stocks and crypto.

May 19, 2022

Stocks took a beating yesterday, as the Nasdaq 100 ($QQQ) tumbled 5% lower.

However, the Nasdaq held above last week’s lows and is still in short-term bounce mode.

Despite yesterday’s sell-off, we noticed short-term relative strength and leadership in a handful of leading stocks.

$RBLX, $AFRM, and $ARKK were each mentioned in the chatroom yesterday as stocks that held within their prior day’s trading ranges, despite broad-based selling. 

Today, the Nasdaq 100 has been oscillating near the break-even level, BUT leading growth stocks with relative strength are showing big gains today.

$RBLX, $AFRM, and $ARKK, for example, are each showing a gain of approx. +4% today. 

As we explained to Wagner Daily PRO members in the Swing Trader chatroom, stocks that show relative strength by holding solid when the indices fall are the first to zoom higher when the broad market bounces.

As such, we bought $AFRM in the portfolio today and are targeting several other stocks with relative strength for potential buy entry on a pullback.

The major indices remain in a downtrend, but the key is tracking the performance of leading stocks, rather than the major indices.

For now, we are seeing an increasing number of stocks leading the way higher.

We remain vigilant, but are cautiously scanning the market for new potential buy entries for short-term swing trade entry.

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