The Buzz 🐝 Week 9

Welcome to The Buzz! 

Week starting May 1, 2023 | Edition No. 9 

Each week, we’re learning more about our scan and refining our process. In the interest of being transparent with you, here are some things you should know... 

In each weekly report, we’ll outline 1-3 actionable trades. We’ll also highlight a few other noteworthy setups and discuss why they’re attractive, but not ideal. Some weeks will have more actionable setups than others, as we don’t want to force trades. 

We want to be picky and only highlight setups where we can clearly define our risk. Typically, we want to see a skewed reward/risk ratio of 3:1 or greater. By risking $1 to make at least $3, we don’t have to be right every single time in order to be profitable. 

With any bottoms-up scan, many of these stocks are at the mercy of the broader market. We will always consider the current market environment when identifying our long/short ideas. 

Many of the tickers that make the list each week are small-cap companies, and some have fairly low volume. We like to see at least $10million in average daily dollar volume. We multiply the current share price by the 10-day average daily volume to calculate this. 

We use weekly and daily charts, and often defer to closing prices, rather than intraday highs and lows. Sometimes candlesticks or bar charts do a better job of showing the setup, but we’ll also use line charts to reduce the noise. We use several classic technical analysis tools like trend, support/resistance, chart patterns, relative strength, momentum, Fibonacci analysis, and more. 

None of these setups are guaranteed to work. Profitable trading requires you to take small losses and let your winners run. If price closes below our risk levels, we want to take the small loss and move on, to preserve capital for future opportunities. 

As always, feel free to reach out to me at Patrick@thechartreport.com with any questions or feedback.

Download as TradingView Watchlist 

This table shows the rate of change in weekly mentions relative to a longer-term average of mention history. In less technical terms, this list shows us the most popular stocks on social media last week. 

This Week’s Overview: 

Banks continue to dominate the list for obvious reasons. However, we would rather avoid the entire Financial sector until it begins to show signs of improvement.

You might recognize a few tickers on this week’s list, including Xerox ($XRX), Levi Straus ($LEVI), and Polaris ($PII). But a majority of the list is lesser-known small-cap stocks. Last week was the busiest week of earnings season, so a lot of tickers made the list in response to their post-earnings moves. 

In this week’s report, we’ll spotlight one of our favorite setups, and discuss a few other noteworthy ones that aren’t quite as actionable. 

Let’s kick it off with our favorite this week – Casella Waste Management ($CWST)...