Speculative growth has been one of the hottest corners of the market in recent months.
At the group level, it’s a brand new uptrend for this risk-on basket of stocks.
The ARK Investment flagship fund ARKK is my favorite barometer for the spec-tech space, and it just completed a trend reversal with a bang.
But it isn’t alone.
A growing list of indexes are completing textbook reversals and embarking on new mark-up phases.
Alfonso pointed out the Retail Index $XRT as a good example of this theme the other day. Retail stocks are resolving from a rounding bottom and hitting their highest level in years.
Retail is a heavily bifurcated space. There have been some big cycle winners already. And there is an even longer list of names that have barely participated in the bull market.
Considering the fresh trend reversals, I think there is a sweet spot where retail and speculative growth intersect.
We’ve already written extensively about online retailers and the Amazons of other countries this year. It’s been a huge relative strength area. This is that same theme. It keeps working, so let's keep going back to the well.
Here are two recent additions to my portfolio that fall into the speculative retail category:
I bought these reversals in REAL and RVLV. This is that same pattern we keep going back to.
The RealReal is an online marketplace for consigned luxury goods.
Revolve is an online retailer that specializes in women’s designer brands.
I’ve heard good things about both of them, but it’s really not about that. The charts tell me all I need to know.
I think these stocks keep working as retail and spec-tech continue to pick up steam and get chased into year-end.
And I think they keep working a lot longer than that. I’m eyeing the old all-time highs in both of these names.
That would represent a 350% and 150% move from REAL and RVLV, respectively.
Big gains. It’s what bull markets are for.
And considering the health of the consumer and the knock-out black Friday season we just had, shouldn’t we be looking for more consumer and retail exposure? I sure think so.
Retail Expert Jeff Macke was kind enough to put together a free report for us on the retailers he thinks will win Christmas this year. Click here to download it.
