In today’s Daily Digest, we’ll review the following:

1. No new positions today.
2. Rolling XLB position into February options.
3. No exits since the last report.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

From the Desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

In this scan, we look to identify the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega cap status (over $200B).

Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.

But the scan doesn't just end there.

We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey to becoming the market behemoths they are today.

When you look at the stocks in our table, you'll notice we're only focused on Technology and Growth industry groups such as Software, Semiconductors, Online...

I’ll be back from my holiday soon. But in the meantime, our Chief Options Strategist, Sean has an important message. 

Attend his live event on Thursday and I’ll see you back here on Friday. 

JC

Hi, I’m Sean. I’m the Chief Options Strategist at All Star Charts. 

2024 has been a fantastic bull market. 

These are the types of markets we live for. 

It’s easy to feel...

Baker Bros Advisors, renowned for their biotech expertise, increased their stake in Bicycle Therapeutics $BCYC from 19.76% to 22.90%, as disclosed in a 13D filing. 

This signals strong confidence in the company's prospects, likely tied to its innovative "Bicycles" platform for developing novel therapies. 

Given the Bakers' track record, their investment is a notable endorsement of Bicycle Therapeutics' potential. 

In essence, when the Bakers buy, biotech investors pay attention.

Here’s The Hot Corner, with data from December 17, 2024:

Two notable insider purchases were disclosed via Form 4 filings in the energy sector:

• PBF Energy Inc $PBF: Control Empresarial de Capitales SA reported a purchase, adding $5,357,162 to its current position.
• Diamondback Energy $FANG: Director Steven West also disclosed buying shares for $975,960.

Today's number is... 37.3 > 34.3

More S&P 500 stocks are in downtrends than uptrends.

37.3% are in downtrends… and 34.3% are in uptrends.

Has the environment switched? Maybe.

Here is the chart:

(right-click and open image in new tab to zoom in)

Let's first break down what the chart shows:

The blue line in the top panel shows the price of the S&P 500 index.

In green is the % of S&P 500 stocks above both their 200-day and their 50-day moving averages, indicating a longer-term uptrend.

In yellow is the % of S&P 500 stocks above their 200-day but below their 50-day moving averages. This indicates a longer-term uptrend but a short-term mess.

In red is the % of S&P 500 stocks below their 200-day and below their 50-day moving averages, indicating a longer-term downtrend.

The Takeaway: This chart is a great way to visualize the current market environment and track trends beneath the surface.

Currently, over one-third of...

Large Cap Growth $IWF is green.

Large Cap Value $IWD is red.

This month, there has been a substantial divergence between a select few growth names and the rest of the market. Breadth has been lackluster.

Just look at the divergence between the two.

This doesn't mean the stock market has to crash, but I think this is a regular speed bump in an otherwise healthy bull market.

I've always been a gym rat. But not the Planet Fitness kind...

Give me a ball and a hoop, and I'll be entertained for hours. Even better is a few barrels and a thoroughbred. 

The idea of pumping iron or running on a treadmill with greasy middle-aged men sounds awful. 

However, I can't argue with the market. It keeps rewarding Planet Fitness for its earnings reports!

The company exceeded all expectations last quarter, raised guidance, and raised the price of its base membership for the first time in over 25 years.

PLNT has been a multi-bagger since it bottomed in 2023:

In addition, Planet Fitness resolved a five-year basing pattern on the heels of its last earnings report and is now building up energy for its next leg higher.

We're looking to buy the resolution of this textbook continuation pattern in the coming days.

Thank you for reading.

-Sam

This post was originally for paid members only and has since been unlocked for informational purposes and does not constitute financial advice.

If you're not a member, sign up here.

It’s a serious question.

Some Breakout Multiplier members will completely close trades at a max return of 10x. I’m okay with that. But, I wouldn't go any lower because you need the outliers.

I know other members who prefer to hold on to their winners until expiration (after selling the double, of course). 

There will be times when the former will work better. And there will be times when the latter strategy is the right move.

But from my experience, there is no correct way to manage these home runs consistently.

I don’t have a hard and fast rule for it.

I will be more aggressive and hold on longer if I think we’re in an extra risk-on tape.

I’ll consider what the broader market and the stock’s peer group are doing.

Whenever JC is out, the Morning Show becomes the Strazza Show. 

I invite some of my closest friends on for the guest segment, and we bring the analyst team members on for a free-for-all market discussion. It’s a blast.

Today, we had an extra special guest, David Lundgren.

I’ve learned so much from my conversations with Dave over the years. 

One of the big lessons I credit to him is the importance of outlier trades. We spent a good chunk of time discussing this on my Off The Charts podcast a few months back.

But, I’ve also learned the importance of having big winners first-hand over the years. Figuring this out has been quite the journey, and it has made all the difference for my trading.

I believe in being overly aggressive and making as much money as possible in bull markets. 

Insider activity often tells a compelling story.

Executives might sell their shares for any number of personal reasons—funding vacations, covering big expenses like a daughter's wedding, or diversifying their investments.

But when they buy their own stock, it speaks volumes. There's usually only one reason: they believe the stock is undervalued and poised to go up.

While many are quick to sound alarms over insider sales these days, I prefer to focus on when and where these leaders put their money into their own companies.

Then, as technicians, we decide if the stock offers a favorable risk vs reward opportunity that we want to join in on.

One transaction from today's list that stood out was made by Eric Schuppenhauer, Executive Vice President and Group Business Unit Leader for Borrowing at SoFi Technologies $SOFI.

Schuppenhauer, who joined SoFi in September, made his first open-market...

From time to time, I like to play devil's advocate as part of an exercise to identify potential wrenches and better understand the market environment we might be heading into.

One "cheat code" I've picked up over the years is to assess Consumer Staples stocks on a relative basis.

As the ultimate defensive sector, Staples are the safe-haven that investors hide out in when the broader market comes under pressure.

So far this cycle, we haven't seen investors run to these stocks for safety. That said, the ratio is at a critical juncture as we speak.

The chart below highlights Consumer Staples $XLP relative to the S&P 500 $SPY, currently at a major support level marked by the dot-com bubble lows.

While XLP/SPY is testing a logical area where buyers might step in, we have yet to see any reversal activity.

If XLP/SPY starts to catch a bid here, it could signal defensive rotation, and...

In today's Flow Show, Steve Strazza and I discuss the "real" stock market and what's going on that isn't indicative of what the $QQQ or $SPY is telling us.

Are we setting up for a regime change? Or a change of character for this bull market?

Well, one of the stocks most likely to answer this question is Nvidia $NVDA.

Here's a one-year chart of $NVDA:

This isn't the type of setup that often gets me excited when I'm looking for a bullish bet.

However, large caps have been leading the charge into the end of the year. Will $NVDA finally play catchup? If it does, it could potentially cover a lot of ground in a hurry.

If it doesn't, well... this will be a very valuable clue as to how we need to proceed in the coming year.

So we're going to position for the rebound, putting juicy out-of-the-money call options to our advantage, while defining our risk in case $NVDA would rather yield us information than profits.

Here's the Play:

I like buying a $NVDA March 140/180 Bull Call Spread for an approximately $8.00 net debit. This means I'll...

In today’s Daily Digest, we’ll review the following:

1. No new positions today.
2. Rolling ITB position into February options.
3. No exits since the last report.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

JC here.

I'm out of town this week. So in lieu of the usual daily note, we've arranged for guest posts written by each of the members of the All Star Charts research team. 

Today's post is from Steve Strazza.

Hey guys, it’s Steve today.

Whenever JC is out, the Morning Show becomes the Strazza Show. 

I invite some of my closest friends on for the guest segment, and we bring the analyst team members on for a free-for-all market discussion. It’s a...

The standout insider move today comes from Eric Schuppenhauer, an executive VP at SoFi Technologies $SOFI.

Schuppenhauer made a bold statement by purchasing 30,599 SOFI shares—an investment worth $500,000.

This adds weight to the vision of CEO Anthony Noto, who demonstrated his confidence with $10 million in insider buys between March 2022 and May 2024.

The stock has officially left the station, completing a classic bottoming formation and now surging higher with authority:

Price is currently breaking out of a tight continuation pattern, in the direction of the underlying trend.

If insiders are anything to go by, they clearly believe there’s still plenty of track ahead for this train!

Here’s The Hot Corner, with data from December 16, 2024:

James Monroe III, a director and significant shareholder of Globalstar $GSAT, revealed a...

Today's number is... 3

The Hindenburg Omen has triggered for the 3rd time over the past 110 trading days.

The Hindenburg Omen is designed to identify potential turning points in the stock market, raising concerns about a possible downturn.

Is this something we should be concerned about? Or not?

Here’s the chart:

(right-click and open image in new tab to zoom in)

Let's break down what the chart shows:

The blue line shows the price of the S&P 500 index.

The gray bars represent the Hindenburg Omen signals.

The criteria for the Hindenburg Omen:

1: The S&P 500 must be above its 50 day moving average. 

2: New NYSE 52-week highs & new 52-week lows must both be greater than 2.8% of all advancing and declining issues.

3: The NYSE McClellan Oscillator is negative.

The Takeaway: I will begin by stating that the Hindenburg Omen should not be viewed in isolation but more as one small piece of the larger stock market puzzle. However, it is important to note that this signal...

A month ago, I shared my thoughts on the early stages of Bitcoin’s next major bull run — and the opportunities beyond BTC itself. While the focus often remains on Bitcoin during these bullish cycles, I highlighted the broader crypto ecosystem, particularly crypto-related stocks, which have historically outperformed during similar periods.

In that post, I discussed specific setups for miners like Hut 8 Corp ($HUT), Bit Digital ($BTBT), Greenidge Generation ($GREE), and Stronghold Digital Mining ($SDIG), alongside key crypto-related names like Coinbase, Microstrategy, and Robinhood. I also emphasized the importance of watching the ratio between Valkyrie’s Bitcoin Miners ETF ($WGMI) and Bitcoin ($BTC), as its recent movements hinted at a potential reversal in mining stocks’ performance.

Now, a month later, it’s time to revisit those ideas, assess how these setups have played out, and look ahead to what’s next as this Bitcoin move continues to unfold.

Today, while chatting with Sam, we discussed our bullish outlook on Tesla and its potential for more disruptive innovation in the future.

It’s incredible how things once seen as science fiction or “only in the movies,” are becoming reality. 

Elon Musk resembles a real-world Tony Stark or a Star Wars visionary, turning far-out ideas into groundbreaking new technologies.

But this isn’t about Musk or our fundamental outlook on the company — the chart setup couldn’t look any better.

The risk for TSLA is skewed heavily to the upside above those old highs.

Tesla spent the past three years building a massive base within the context of a structural uptrend.

Over the past two months, price has surged in a near-vertical line. Last week, the stock broke out to new all-time...