Trend Check with Tushar Chande

Top Trending Small-Cap Stocks and ETFs

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Even as the Small-cap index rises to new highs, mid-, large- and mega-cap indexes are barely clearing their April highs.  So, I have scanned the database and identified the top trending small-cap stocks and ETFs for your review.  In an earlier post, I managed to pinpoint the major turning point within two days of a key low, and the markets have since moved higher without make new lows.  I will update below a key chart from that post so you can judge for yourself.

 

Chart 1: The S&P 600 Small-Cap index (middle chart, lower row) rose to new all-time highs, but the other major indexes were barely able to clear their April highs.  Clearly, small-cap stocks have the momentum for now.


 

Top Trending Stocks in the S&P 600 Small-Cap Index

Here is the summary of my search for the top trending stocks in the small-cap universe.

Chart 2: The strongest stocks in the Small-Cap 600 index, with SCTR > 90 and Chande Trend Meter > 90.

 

Top Trending Small-Cap ETFs

Here are the results of my search for the top trending small-cap ETFs.

Chart 3: The strongest small-cap ETFs include growth, blended and value-oriented ETFs.

 

Looking Back: Posted within 2-days of Key Low

I was able to identify the key low within two days of the event in an earlier post, and the S&P 500 has not made new lows since then.  The Chart 5 from that post has been updated below.

 

Chart 4:  My previous post correctly identified the key low within a couple of days of occurrence (see note included in chart). The Aroon indicator has now turned bullish and reached 100, which should take the market to a test of resistance at 2800+/- 10. This chart was Figure 5 of my previous post in early April.

 

Looking Ahead

The next meeting of the US Federal Reserve's FOMC in early June coincides with the North Korea summit in Singapore.  So the market will start becoming cautious in early June, perhaps in the week leading up to those events.  Until then, we have a lot of resistance to overcome, especially in the broad market.

 

Chart 5:  The market seems to be trending higher within an up-trend channel, and the dotted lines should provide a template to check if the market has enough momentum to push above the channel.  Alternately, the channel meets resistance in early June, which would coincide with a slow-down ahead of FOMC and the Singapore summit.

 

I hope you will find the spade work on small-cap stocks and ETFs useful, and enjoyed the accuracy of my previous post.  Please subscribe to the blog using the quick link below.

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Tushar Chande
About the author: , PhD, MBA, is the inventor behind an impressive collection of technical indicators, including the Aroon and Stochastic RSI. He has written several books, holds both a PhD in Engineering and an MBA in Finance, and has over two decades of experience trading the financial markets. Follow Tushar in this blog as he highlights his new "Trend Meter" indicator and shares his analysis of current market conditions. Learn More
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