Past week recap: After 7 weeks of choppy but net neutral action, stocks broke out to the upside on generally good earnings, and relief that Iran retaliation upon U.S. withdrawal from the agreement was put down swiftly by Israel. Concerns about growing instability in the Middle East and its affect on oil supplies caused oil prices to rise and thus also raised oil stocks. Also helping was a report that consumer prices were flat, alleviating concerns of more Fed interest rate increases than already forecast.

The week was a big boost for long positions in general, of which there are many in Level 1. Not all stocks rose, however – still seeing an unusually high number of “implosions” – big abrupt drops in price as institutional investors react to surprising (bad) corporate news. Level 1 has had more than its share of these of late.

Analytics: Recent ongoing tweaks indicate once again a few contrary positions – either from trades that should have been made a few weeks back or should not have been made a few weeks back. We will exit those that remain contrary and likely to worsen (CBAY). Those indicating signs of correcting soon will be held through the counter-cycle (LPSN).

Highlights: 11 new weekly highs in long positions. 10 stocks with double-digit long gains:

  • NCI +10%
  • CECE +26%
  • FMSA +30%
  • EVTC +57%
  • URBN +85%
  • CRC +94%
  • BXC +330%
  • CVRR +25%
  • PES +102%
  • EVH +22%

2 new weekly lows among short positions. 1 stock with double-digit short gain:

HTZ +11%

Stock list changes: Deleting PTGX after recent “implosion” shows no sign of recovery. Adding the following stock with recent compound trading return listed and trade indicated:

Enzo Biochem Inc (ENZ) [healthcare providers & services], +112.0% in past 15 months