The most recent Marketsmith Blue Dot Scan produced a few interesting candidates for our review. And, at the start of October, the new quarter, many more stocks were breaking out and showing relative strength in the aptly named Relative Strength scan. Both scans are targeting a few recent swing trades, like NET.
Cloudflare NET – Blue Dot Scan
Cloudflare continues from its breakout last Friday. While many subscribers mentioned the breakout came on average volume, the follow-through on Monday is what caught everyone by surprise. Volume confirmed institutions had been buying the stock.
With earnings scheduled for the first week of November, Cloudflare is a bit ahead of itself, 36% above its breakout zone in 3 trading days. Earnings need to be stellar to hold these levels. We’ll take some profits off today or Friday as cloud stocks appear to be in favor of investors at this time.
MarketSmith Blue Dot Scan for 10-14
These are the candidates from the scan last night. Like NET, the stocks are poised to breakout, showing relative strength at new highs. While not a guarantee, these certainly deserve your attention.
As always, wait for the indices this morning before taking any new positions. Futures are lower on jobless claims (10mil claims vs. 10.8mil est.) and stalled monetary stimulus negotiations.
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