Stocks make the MarketSmith Blue Dot list when they satisfy two criteria: first, they’ve hit a 52-week high in their Relative Strength line. This is where you’ll notice a translucent blue dot appear on the Relative Strength line of the stock’s chart. Second, the stock is currently building a base. If both of these conditions are present, the stock goes on the list for 90 days. You can access the list by clicking on the “Open Stock Ideas” button in the top-right corner on any MarketSmith chart.
Summary
MarketSmith Blue Dot Scan
The first thing stocks on the Blue Dot list have shown is that they are outperforming the market (specifically, the S&P 500) in the strongest waypossible. This is important because the highest-potential stocks will show strength by outperforming the market in any market conditions.
Avid Bioservices
Avid Bioservices (CDMO) broke out on Monday after completing a 4 week flat base at 52-week highs.
Relative Volume (RVOL) was 2.4 times normal with RS Line at 98 and rising.
Earnings and sales are growing at a rapid pace, estimated to increase +183% to 0.17 / share for 2022.
Estimates for 2023 are equally impressive at +100% to 0.34 / share.
The second important characteristic of Blue Dot stocks is that they’re building a base, which means you’re not chasing an extended stock that has less potential for short-term growth. After all, even the best stocks take time to retrench after sizeable runs. A stock that’s currently in a base will have a clear buy point in MarketSmith thanks to the Pattern Recognition feature.
Veritiv Corporation
Veritiv Corporation (VRTX) broke out of a base on base pattern Monday on Relative Volume (RVOL) exceeding 3.2 times normal. The company reported 2nd Quarter June 2021 earnings of $1.87 per share on revenue of $1.7 billion. This amounts to a beat of 240%.
The consensus earnings estimate was $0.81 per share on revenue of $1.5 billion. Revenue grew 18.1% on a year-over-year basis.
Relative Strength Line = 99 and rising.
Watchlist Results
| ETHE | ETHE – Grayscale Ethereum Trust | 30.27 | 2.75 | 9.99 | 8769843 | |
| TMST | TMST – Timken Steel Corp. | Materials | 15.18 | 0.83 | 5.78 | 821936 |
| LAC | LAC – Lithium Americas Corp. | Materials | 15.47 | 0.66 | 4.46 | 4393168 |
| ENPH | ENPH – Enphase Energy Inc. | Technology | 185.56 | 5.82 | 3.24 | 1515219 |
| CLF | CLF – Cleveland-Cliffs Inc | Materials | 24.77 | 0.75 | 3.12 | 21852239 |
| IBB | IBB – iShares Nasdaq Biotechnology ETF | 176.21 | 4.09 | 2.38 | 5510899 | |
| SCHW | SCHW – Charles Schwab Corp. | Financial | 73.42 | 1.49 | 2.07 | 6079900 |
| ILMN | ILMN – Illumina, Inc. | Health Care | 506.15 | 8.91 | 1.79 | 487342 |
| AIG | AIG – American Intl Group, Inc. | Financial | 51.85 | 0.90 | 1.77 | 4388864 |
| SQ | SQ – Square, Inc. | Technology | 279.73 | 4.63 | 1.68 | 10561694 |
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Vinny
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