From the desk of Steve Strazza @sstrazza

This is one of our favorite bottoms-up scans: Follow The Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity -- either bullish or bearish... but NOT both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients. Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades. What remains is a list of stocks that large financial institutions are putting big money behind... and they're doing so for one reason only: Because they think the stock is about to move in their direction and make them a pretty penny.

The market has a mind of its own. Who would've thought that Reliance Industries would break out on a messy market day?

If you've been in the market a while, then you know that Reliance can single-handedly decide the direction of the market. Such is the power of this stock!

So what do we have here? Well, after a considerable bounce over the past month and a half, Reliance has managed to breach an area of resistance. And we're here to talk about the implications of that.

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest "Under The Hood” column for the week ended June 13, 2021. This report is published bi-weekly and rotated on-and-off with our "Minor Leaguers" column.

What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.

From the desk of Steve Strazza @Sstrazza

Check out this week’s Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the context of the big picture and provides insights regarding the structural trends at play.

Let’s jump right into it with some of the major takeaways from this week’s report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

This week we're looking for a long setup in the Pharmaceutical sector. Historical highs are being clocked on both index and stock levels, and one name pops right up.

Early in February, we had published a post discussing the Adani Group and its targets as well as risk management levels. We published a follow-up post with revised targets and risk management levels in April this year.

Well, it's that time again where we update the levels and see what's in store for this group.

Here's to more rotations and revolutions in this particular solar system. Off we go on our rocket ship to see what the charts have to say!

We created a Custom index of Equally weighted Adani Group stocks. As you can see, this particular line chart only requires an extension in the headspace area. Keeps moving higher and higher.

Click on chart to enlarge view.

From the desk of Steve Strazza @Sstrazza

Dividend aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.

As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.

Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for 5-9 years.   

We call them the Young Aristocrats, and the idea is that these are “stocks that pay you to make money”. Imagine if years of consistent dividend growth and high momentum & relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

We're back to share with you, what we love to do and that is the Top/Down approach. At All Star Charts we're big fans of the weight of the evidence. The market tells us where it's going, and we listen. It's pretty simple really.

For some time now, the Pharma sector has been displaying strength. Resistances have been breached, momentum indicators have been strong, and rallies have been swift.

So what do the charts say this time around? Let's take a look!

Have you seen Homebuilding stocks getting hit?

It's not happening at a random spot either. The upside objectives were hit, as we discussed on last week's call, so this would be a perfectly logical place for this correction to take place.

But the chart of the week has to be Homies relative to REITs. With Real Estate Investment Trusts (REITs) breaking out on both an absolute AND relative basis, it makes this chart that much more dramatic.

This is the true story:

The Financial Services sector has been displaying resilience. Within this universe, there are certain stocks that are showing strength and moving past their resistance.

Let's see what the charts have to say!

With the breakout in Nifty 50, several indices have resumed their trend on the upside. Financials is another sector that has been hinting at the same.

In this post, we're also going to take a look at some of the lesser discussed stocks in Financials.

Here are some stocks at crucial levels.

First up, we have Cholamandalam Financial Holdings. The stock has moved past its resistance of 620 and is on the way to the target! After halting at the overhead supply zone for quite some time, the price broke out along with the indicator moving into bullish momentum territory.

We are positive above the level of 620, with a  target near 780.

Click on chart to enlarge view.

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

Something we’ve been working on internally is using various 'bottoms-up' tools and scans to complement our top-down approach.

One way we’re doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small, to mid, to large - and ultimately 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.

We debuted a new scan recently- The Outperformers.

The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.