Institutional investors suddenly went on a buying spree. Monday’s market rise was attributed to a “relief rally” after first round French elections suggested the EU would remain intact after all (good for all world markets), but later week buying took place on less obvious influences. Several big name tech companies reported good earnings, but GDP numbers and proposed tax reforms were underwhelming and North Korea threat still unresolved, so not certain just why stocks jumped as much as they did. Could be another case of institutional investors having access to and reacting to far more breaking information than available to small investors.
Buying was so robust that many stocks recorded their largest weekly rise in over a year. This was good for our longs – both recent and long-held – but moved more short positions into the loss column and signaled more exits for loss. The recent market choppiness continues.
Several trades from last week and the week before – both long (TRUE) and short (NGL) – resulted in large early gains, a reminder that no matter the market conditions, reacting in a disciplined manner with timely trades is crucial to investing success – these trend reversals would have caused large losses if not acted upon when indicated.
Highlights: 5 new weekly highs in long positions. 4 stocks with double-digit long gains:
TRUE +16% EVH +22% NEFF +66%
FIVN +23%
4 new weekly lows among short positions. 4 stocks with double-digit short gains:
ERF +17% NGL +26% NPTN +30%
URBN +31%