Friday Charts: A Scary Bullish Reversal

Lou Basenese

Friday, February 5, 2021

It’s Friday in the Trend Trader Daily Nation.

That means it’s time to embrace the adage that a picture is worth a thousand words.

Each week, I select a graphic or two to convey an important economic or investment insight.

All it takes is a quick glance and you’ll be up to speed — and more importantly, poised to profit.

This week, I’m doing two things…

  • First, I’ll debunk the myth that the “Robinhood Effect” can last indefinitely.
  • And second, I’ll remind you about the best place to find 10-bagger opportunities that are undervalued, under-the-radar — and still have compelling fundamentals.

So let’s get to it…

Meme Stocks Meet Reality

You know all those new Robinhood traders with visions of sugar plums dancing in their heads? The ones thinking that they too should be enjoying instant GameStop (GME) riches?

They should think again.

As I warned last week, crappy fundamental stocks always come crashing back to earth — short squeeze or not — and “all these newbie traders will find out this truth the hard way.”

And that’s precisely what’s happening. Take a look:

(click image to enlarge)

And as you’ll also notice, the magnitude of each squeeze keeps shrinking.

Sorry folks. There’s no such thing as getting stupid rich quickly. Not in the stock market, at least.

If you try, you just end up looking stupid.

If you actually want to be smart and have a legitimate shot at life-changing gains, there’s no better option for everyday investors like us than to invest in micro-caps.

Micro-Caps — Still Where It’s At!

I alerted you to the profit potential and accelerating trend in smaller stocks months ago.

And this trend just won’t quit!

Case in point: the Russell Micro-Cap Index keeps hitting new highs. It’s trouncing large caps.

In fact, over the last year, the iShares Micro-Cap ETF (IWC) is up more than 50%, versus an 18% rise for the S&P 500.

(click image to enlarge)

Remember, though, these are just the averages.

Many individual micro-caps are up hundreds of percent. Literally!

Plus, the IWC ETF doesn’t even contain the smallest and most potentially profitable micro-caps. In fact, the weighted average market capitalization of stocks in IWC is around $800 million.

Here’s the thing: in the micro-cap market, the biggest winners come from companies with sub-$300 million and even sub-$100 million market caps.

Like Atomera (ATOM). 

When I first recommended this stock to readers, it traded for less than a $100 million market cap. But today, it vaulted to fresh all-time highs — it hit a market cap of almost $1 billion.

(click image to enlarge)

If you’re not enjoying profit potential like this in your portfolio, you should be!

I say that because my premium research advisory Micro-Cap Advantage does nothing but unearth these types of 10-bagger opportunities. In fact, it’s a requirement for any stock recommended in the service.

And it’s paying off…

In addition to the unrealized gain of 915% in Atomera right now, subscribers are sitting on seven more triple-digit winners.

If we include all the winners and losers in the current portfolio, the average gain checks-in at a market-trouncing 152%. And the average holding period is under one year.

If you don’t want to miss out on the next big micro-cap winner, all you have to do is punch your ticket and become a Micro-Cap Advantage member. To get set up, just call my colleagues at 1-844-575-7767.

Ahead of the tape,
Lou Basenese
Lou Basenese


Tags: Trends Friday Charts

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