The most talked about stocks this week
Last week saw some recovery for the hard hit tech and growth stocks as investors became slightly more comfortable with inflation forecasts, meaning US bond yields tapered off, which raised stock prices (they essentially have an inverse relationship, as one rises, the other drops). In addition, the $1.9 trillion stimulus bill was completed by the US govt.
For some, reduced stock prices provided a buying opportunity, or at least an opportunity to average down the cost of some of the positions.
I don’t expect us to be fully out of the woods yet in terms or recovery, with monday market opening likely to be red all over, as late on friday, bond yields jumped again following low demand for US govt bonds in auction (when you take into account inflation, the yields on those bonds means you essentially have less money value than what you invested), however, that should reduce by end of the week.
Still bullish
Taking a step back and Looking at the overall market, this correction was not just healthy, but overdue. While some assets are still overpriced, overall economy recovery provide a good backdrop for further mark growth, at least in the short-medium term. This current period provides an opportunity to “buy the dip“ on stocks which have a solid future, but also to reap the gain from some sectors that will see rapid growth over the next year. After all, rising inflation forecasts are due to the fact that most economists see the world economies recovering rapidly from the return of normality from COVID.
What will be the recovering sectors?
In short, think of any the stocks that you have not been able to use or shop from over the last year.
- Airlines & Travel
- Hospitality
- Manufacturing
- Consumer cyclical
- Events
- Retail
I can go into this in more detail on a separate article if people want so. If you do, drop a comment below!
Buzzing stocks this week
This week has been a very busy one for the algorithm, with a lot of stocks picked up, and changing throughout the week. I am thinking of adding a UI to give real-time access to users, let me know if that is something you would be interested in.
Here’s my commentary on the most interesting ones in there:
- 3D Systems, ticker: DDD
Since the time of writing and creating this graph, this stock has shot up %4.2 and up another %1.5 in pre-market. Down from All-time high from earlier this year, DDD benefitted from analyst upgrades last week, as its price suffered a big tumble. Furthermore, ARK initiated DDD position in ARKQ (Autonomous Technology & Robotics) ETF yesterday, putting it in the same basket as TSLA. Expect further gains short-term, and high volatility. - Accsys Technologies, ticker: AXS
This is a very interesting one, especially long-term. A sustainable wood company that produces high technology, alloy-like wood, planting a tree for every one it chops down. Has recently completed the building of 2 large production factories. I might even cover this on a separate article. Note: This company has a small market cap, meaning a low number of shares traded, which means it could take longer than you’d like to buy/sell your shares. - Vermilion Energy Inc, ticker: VET
Saw a price jump as analysts upgraded its price target last week. Energy companies are rising as demand is forecast to increase over the next few months. Not sure how this one will move in the near-future, one to watch. - Teradyne, ticker: TER
Another one seeing lots of chatter on the back of ARK positioning. This one is a very exciting prospect to me, and ticks A LOT of boxes, most importantly, very solid finances. The company saw Earnings per share (total earnings of the company, divided by number of shares, the higher the better) growth of 64% last year.
Summary
Expect a less wild ride next week than the last few weeks, but still with some turbulence. Reduced prices have created a number of opportunities, which are being picked up by the algorithm.
While there is likely still some downside in the market, longer-term I see a rosier picture, especially as economies recover and return to normality. I see now as an opportunity to purchase some opportunities at strategic prices, as well as a time to rotate into some of the recovery stocks, taking some profits from the growth/tech sectors along the way.
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