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Bulls Back on Top as Market’s Fear Gauge Plummets

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In Thursday’s issue of Stock Surge Daily, we talked a bit about the CBOE Volatility Index (VIX).

The VIX is known as the market’s “fear gauge.”

Without getting into the details of how it is calculated, what you need to know is that the VIX essentially tells you how fearful traders are about a drop in the market over the next 30 days.

When the VIX is high, it tells you that traders are expecting the market to be relatively volatile.

When the VIX is low, like it is right now at the 15 level, it tells you that traders are not expecting much volatility.

So, it makes total sense that as the VIX has dropped nearly 35% so far in October, the markets have rallied sharply.

The benchmark S&P 500 Index is up 5.7% for the month as of this writing, and it has enjoyed eight up-days in a row.

It even set a new all-time high this past Friday at 4,559.67.

This has been great for the trades I published to last week’s Watchlist.

Week in Review

So, before we get to my latest picks, I want to quickly review the three stocks we’ve been working with over the past week.

First up was Heritage-Crystal Clean, Inc. (HCCI), which is up 14% from my recommended entry point.

Daily Chart of Heritage-Crystal Clean, Inc. (HCCI) — Source: TradingView

Next up was Revolve Group, Inc. (RVLV), which jumped 5% and is now finding support near our original entry point.

I’m looking for the stock to follow through and continue making new highs.

Daily Chart of Revolve Group, Inc. (RVLV) — Source: TradingView

Finally, there was Veritiv Corporation (VRTV), which spiked 5.9% during Tuesday’s breakout, pulled back and then proceeded to push higher.

It is up 4.6% as of Friday morning.

Daily Chart of Veritiv Corporation (VRTV) — Source: TradingView

These are some spectacular results, and I hope you were able to take advantage of some or all of these moves.

I’m hoping for similar results over the coming week, so now let’s check out the stocks that made it onto this week’s Watchlist.

Full House Resorts, Inc.

Full House Resorts, Inc. (FLL) is an owner and operator of casinos and related hospitality and entertainment facilities in the United States.

These include Mississippi’s Silver Slipper Casino and Hotel, Colorado’s Bronco Billy’s Casino and Hotel, Indiana’s Rising Star Casino Resort and Nevada’s Stockman’s Casino and Grand Lodge Casino.

The company also recently proposed a new $250 million gaming and entertainment destination in Indiana called “American Place.”

Here’s how the chart is setting up:

Daily Chart of Full House Resorts, Inc. (FLL) — Source: TradingView

And here’s how the stock is setting up with my Stock Surge Indicator (SSI):

  • Surge score: 94/100
  • % Above 52-wk low: 453%
  • MFI reading: 63
  • Sales growth: +206%
  • Triple momentum: yes

From a technical perspective, FLL is completing a five-month cup and handle formation.

So far, the stock has pulled back 9% in the handle. The low of the handle move is where I would place my stop.

Then, the entry trigger will be a break of the handle trend line.

I like to see price break the last few days’ highs, which right now would mean buying on a move above $11.55.

Teradata Corporation 

Teradata Corporation (TDC) provides hybrid cloud analytics software through its Teradata Vantage platform as well as software, hardware and support services.

It also operates a business consulting division for businesses looking to establish an analytical vision and identify analytical opportunities that can help deliver value to their customers.

It serves a range of industries from financial services and healthcare to manufacturing and retail.

Here’s how the chart is setting up:

Daily Chart of Teradata Corporation (TDC) — Source: TradingView

And here’s how the stock is setting up with my SSI:

  • Surge score: 96/100
  • % Above 52-wk low: 226%
  • MFI reading: 54
  • Sales growth: +7%
  • Triple momentum: yes

Teradata sales growth was only 7% last quarter, but earnings were up 208%. And based on the price action, the stock is clearly under accumulation.

There has also been a noticeable dip in volume during the final leg of this consolidation.

TDC just hit my entry trigger at $58.65 at the time of this writing on Friday morning.

As long as price has not gotten extended by Monday’s open, this should be a good entry point.

I suggest working a stop just beneath the swing low at $54.10.

Veeco Instruments Inc.

Veeco Instruments Inc. (VECO) is a developer and manufacturer of semiconductor and thin film process equipment that is used to build electronic devices.

Integrated device manufacturers use VECO’s products to make microelectronic components like logic boards, dynamic random-access memory (RAM) and other semiconductor devices that are in high demand and short supply around the world right now.

Here’s how the chart is setting up:

Daily Chart of Veeco Instruments Inc. (VECO) — Source: TradingView

And here’s how the stock is setting up with my SSI:

  • Surge score: 79/100
  • % Above 52-wk low: 89.2%
  • MFI reading: 49
  • Sales growth: +48%
  • Triple momentum: yes

I love the technical setup on VECO right now.

After a 140% surge over a nine-month span, shares retraced by 20%.

Pullbacks got progressively shallower and formed clear resistance at the $24.00 level.

There appears to be a lot of supply at this level, but the price compression suggests the market is working through those sell orders.

If VECO can clear the $24.00 level, there should be little resistance for a quick move higher.

Also, you only need to risk about 5% to potentially see a nice win.

Embrace the Surge,

Ross GivensEditor, Stock Surge Daily

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