High Quality Stock Setups, Weekly Stock Bull Finder

Weekly Stock Bull Finder

High Quality Stock Setups

Finding high potential stock setups on quality companies

Thematic (Sector/Industry)

<ul><li>This past week the news was dominated by political midterm election results and a brewing crypto market implosion but also featured a late week rally after a surprising CPI inflation print which beat estimates on Thursday.</li><li>While pundits can posit various reasons for Thursday and Friday’s market rallies, there appears to be at least a few brewing catalysts that could carry positive momentum into 2023 which include 1) continued downside surprises in either CPI or PCE inflation data which would allow the Fed to back off its aggressive tightening campaign 2) steps leading to Chinese economy reopening reducing existing supply chain bottlenecks 3) steps leading to a ceasefire or peace agreement in Ukraine and 4) significant improvement in EU energy security situation resulting in lower EU inflation.</li><li>In the near term, it appears as of this writing that political gridlock in Washington D.C. will be upon us for the next 2 years removing the worst case scenarios of any significant market-negative legislation (i.e. tax hikes, etc.) being passed.</li></ul>

This past week the news was dominated by political midterm election results and a brewing crypto market implosion but also featured a late week rally after a surprising CPI inflation print which beat estimates on Thursday.While pundits can posit various reasons for Thursday and Friday’s market rallies, there appears to be at least a few brewing catalysts that could carry positive momentum into 2023 which include 1) continued downside surprises in either CPI or PCE inflation data which would allow the Fed to back off its aggressive tightening campaign 2) steps leading to Chinese economy reopening reducing existing supply chain bottlenecks 3) steps leading to a ceasefire or peace agreement in Ukraine and 4) significant improvement in EU energy security situation resulting in lower EU inflation.In the near term, it appears as of this writing that political gridlock in Washington D.C. will be upon us for the next 2 years removing the worst case scenarios of any significant market-negative legislation (i.e. tax hikes, etc.) being passed.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

US Treasury (10 Yr Generic) / Technical Analysis

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an outright bullish stance. High yield spreads hit new 2021 narrows on Friday as they moved to 14-year lows. Additionally, defensive areas including Staples (XLP), Utilities (XLU), and Gold (GLD) are breaking to new 2021 RS lows.

Market dynamics remain largely bullish and we continue to see signs of improving risk appetites. As a result, we are on the verge of shifting to an outright bullish stance. High yield spreads hit new 2021 narrows on Friday as they moved to 14-year lows. Additionally, defensive areas including Staples (XLP), Utilities (XLU), and Gold (GLD) are breaking to new 2021 RS lows.

U.S. Equity Strategy: Downgrading Consumer Staples To Underweight; Watching 10-Year Yield Closely

As part of the improving cyclical value theme, several of the down-and-out retail stocks are bottoming. This is depicted by bullish price and RS reversals in the SPDR S&amp;P Retail ETF (XRT), helped by easing US-China trade tensions. Below we lay out what we believe is a timely and compelling case to add exposure to retail at current levels. In today’s report we highlight our favorite technical setups, including: <a href="https://www.smartkarma.com/entities/autonation-inc" target="_blank" data-smartkarma-citation="entities:16548:1" rel="noopener">Autonation Inc (AN US)</a>, <a href="https://www.smartkarma.com/entities/buckle-inc-the" target="_blank" data-smartkarma-citation="entities:19819:1" rel="noopener">Buckle Inc/The (BKE US)</a>, <a href="https://www.smartkarma.com/entities/boot-barn-holdings-inc" target="_blank" data-smartkarma-citation="entities:11647:1" rel="noopener">Boot Barn Holdings (BOOT US)</a>, <a href="https://www.smartkarma.com/entities/burlington-stores-inc" target="_blank" data-smartkarma-citation="entities:1893:1" rel="noopener">Burlington Stores (BURL US)</a>, <a href="https://www.smartkarma.com/entities/caleres-inc" target="_blank" data-smartkarma-citation="entities:3161:1" rel="noopener">Caleres Inc (CAL US)</a>, <a href="https://www.smartkarma.com/entities/chico-s-fas-inc" target="_blank" data-smartkarma-citation="entities:4610:1" rel="noopener">Chico's Fas Inc (CHS US)</a>, <a href="https://www.smartkarma.com/entities/guess-inc" target="_blank" data-smartkarma-citation="entities:4322:1" rel="noopener">Guess? Inc (GES US)</a>, <a href="https://www.smartkarma.com/entities/nordstrom-inc" target="_blank" data-smartkarma-citation="entities:19459:1" rel="noopener">Nordstrom Inc (JWN US)</a>, <a href="https://www.smartkarma.com/entities/radian-group-inc" target="_blank" data-smartkarma-citation="entities:20230:1" rel="noopener">Radian Group (RDN US)</a>, <a href="https://www.smartkarma.com/entities/ross-stores-inc" target="_blank" data-smartkarma-citation="entities:17981:1" rel="noopener">Ross Stores Inc (ROST US)</a>, <a href="https://www.smartkarma.com/entities/sprouts-farmers-market-inc" target="_blank" data-smartkarma-citation="entities:17622:1" rel="noopener">Sprouts Farmers Market (SFM US)</a>, <a href="https://www.smartkarma.com/entities/tjx-companies-inc" target="_blank" data-smartkarma-citation="entities:15291:1" rel="noopener">Tjx Companies (TJX US)</a>, and <a href="https://www.smartkarma.com/entities/urban-outfitters-inc" target="_blank" data-smartkarma-citation="entities:9278:1" rel="noopener">Urban Outfitters (URBN US)</a>.

As part of the improving cyclical value theme, several of the down-and-out retail stocks are bottoming. This is depicted by bullish price and RS reversals in the SPDR S&amp;P Retail ETF (XRT), helped by easing US-China trade tensions. Below we lay out what we believe is a timely and compelling case to add exposure to retail at current levels. In today’s report we highlight our favorite technical setups, including: Autonation Inc (AN US), Buckle Inc/The (BKE US), Boot Barn Holdings (BOOT US), Burlington Stores (BURL US), Caleres Inc (CAL US), Chico's Fas Inc (CHS US), Guess? Inc (GES US), Nordstrom Inc (JWN US), Radian Group (RDN US), Ross Stores Inc (ROST US), Sprouts Farmers Market (SFM US), Tjx Companies (TJX US), and Urban Outfitters (URBN US).

U.S. Equal-Weighted Retail Is Bottoming -- Add Exposure

United States

Chico's FAS, Inc. sells private label women's casual clothing and related accessories.  The Company's clothing includes tops, pants, shorts, skirts, and dresses.  Chico's owns and operates stores throughout the United States.

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