Leading Stocks Look Overextended

Another broadcast from Mayakoba, Mexico where it’s been a busy week working here, giving live demonstrations and conducting various meetings before the Christmas break.  And during a couple of those online presentations which I gave outside – supposedly in glorious sunshine – I’ve actually been rained on in a downpour kind of way, which you can guess from the dark grey clouds looming in this picture here!

Onto this week’s review … I cannot help but feel that many of my familiar leading stocks need a bit of a rest right now, so in today’s broadcast I have been looking at stocks outside of the Large Cap 1000 in order to find some good value setups there.

What makes me feel that some stocks could be overextended?

Well, it’s a lot to do with their trajectory (if they’ve gone parabolic), and also how far they have peeled away from critical key levels like the 200 and 50 day moving averages.

As you’ve seen countless times, I tend to gravitate towards the 200-dma Key Level because I know there’s plenty of room for a big move if the stars align on a stock that is crossing and holding past that Key Level.  The 50-dma is also decent in that respect, particularly in an established bullish swing cycle.

There simply aren’t that many of those with real quality in the Large Cap 1000 right now, and so with a quick click of a switch I aimed my filters at smaller cap stocks to see if I could unearth value there.  And while those names are not too familiar for me, there are a couple of standout setups there, which you can view in today’s video.

And as you’ve become accustomed to by now, I’ve added all stocks covered in the review to the “Latest Review Stocks” watchlist, which you can access in the Watchlist area.

Here’s today’s OVI Market Review.