Tech Stays Under Pressure
The tech selloff, improving company results and stubborn inflation shaped our week. We focused on businesses whose operations were strengthening while their shares sold off.
Nvidia announced on Thursday that Jensen Huang had resigned and CFO Colette Kress had become interim CEO. The board also announced a search for a permanent successor.
Friday’s producer-price report also showed persistent inflation. Prices rose 0.3% in October, down from September’s 1.4% monthly increase, while the annual increase reached 6.5%—its highest since November 2022.
How We Traded It
Monday: A Former Winner Returns
Monday’s A Former Winner Turns Up Again laid out two bullish setups. The first company had already given us three profitable completed trades this year. Its latest Fundamental Early Recovery signal combined a price upturn with a stronger operating report and funding for the next phase of product deliveries.
The second was a laboratory-tools business from our Multibaggers list of analysts with multiple recent 100%+ stock winners. It had a growing installed base, recurring sales and improving margins. We gave both operating theses several months to develop.
The laboratory-tools trade filled. Our former-winner trade didn’t fill.
Tuesday: Has The Crash Made Tech Cheap?
Our free post Has The Crash Made Tech Cheap? focused on businesses whose earnings were accelerating as the selloff created opportunities. That company-by-company approach carried through the week’s trade alerts.
Wednesday: Buying Time For Biotech
Wednesday’s Buying Time For Biotech focused on a company with clinical and regulatory catalysts over the coming months. That trade didn’t fill.
Thursday: The Nvidia Opportunity
On Thursday, we made the bullish case for Nvidia in The Nvidia Opportunity. Our argument was that the bad news was already priced in. This entry filled.
Friday: A Fresh Recovery Signal
Friday’s A Fresh Recovery Signal brought our recovery screen together with the Top Names selection process. The candidate had fallen about 20% over the month through Thursday’s close, when it cleared the screen. Its improving business and an earnings catalyst supplied the company-specific case. This trade filled.
This Week’s Exits
This week’s exits included one full-exit loss and three full-exit gains, along with ten partial-exit losses and five partial-exit gains. We covered them in this week’s Exits post:
As of Friday’s close, we had fully exited 287 trades this year, with an average return of 21.5% on original maximum risk. Here is the current year-to-date record:
What We’re Watching Next
Nvidia reports after the close on November 17th. Strong results and an upbeat outlook for AI demand would support our rebound case.
We’ll watch other upcoming results and outlooks for more recovery opportunities among the names flagged by our Early Recovery screen.
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