New Webinar Replays Available!

• New Models Listing Page and Custom Model Service Webinars: We are excited about the latest redesign of the Models page as well as the first installment of the new Custom Models tool. Designed with you in mind, the new Models page includes all of the information that was previously available, with the addition of new statistics and comparative tools to better select the strategy that is right for you or your clients. The page itself was also updated to reflect a more streamlined approach for your model selection and analysis processes. We had two webinars this week on the functionality and navigation on the Models Listing page as well as the new Custom Models tool, which are available below:
  • Introduction to the new Models Page (12/03/2019)
  • Introduction to the new Custom Model Service (12/05/2019)

• Using OptionsPlay Effectively: On Wednesday, December 4th, Tony Zhang, Chief Strategist at OptionsPlay, hosted the latest installment of our ongoing OptionsPlay Webinar Series: Add Leverage with Limited Risk with Options. This webinar focused on basic strategies for bullish and bearish views, taking directional trades with limited risk and leverage, and finding a starting point to learn and analyze each potential strategy.
  • OptionsPlay Webinar Series: Add Leverage with Limited Risk with Options (12/04/2019)

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​Initial Public Offerings (IPOs), the terminology for when companies first offer shares to the public market for purchase, tend to gather significant attention from the investment community. For example, companies like Uber UBER, Lyft LYFT, and Peloton PTON should sound familiar as some of the more prominent names that offered shares to the public earlier this year. Although U.S. based/listed companies tend to pull our attention and dominate the conversation, a Saudi-based oil company just set a record for the single largest IPO in history by raking in approximately $25.6 billion in proceeds. The state-owned oil mammoth set its initial share price at $8.53 (32 riyals) and is set to become the world’s most valuable publically traded company once it starts trading on Wednesday (bloomberg.com). Furthermore and perhaps more interestingly, the lucrative company is known to be a bit secretive and has no recorded borrowing from international debt markets yet will now be required to disclose financial documentation to the public. The unfolding event this week is a culmination of a process that began in 2016 and is certainly a place to monitor as we look towards the close of 2019.  

Improvements in relative strength among small-cap domestic equity mutual funds and ETFs is on full display on the Asset Class Group Scores (ACGS) tool. As a refresher, ACGS ranks asset class groups by their constituents’ average fund scores, with a reading of 0 being the worst possible score and a reading of 6 the best possible score. To specifically view US size and style categories, select “US Styles” under filters and then click “Set View”. While large-cap equities score better overall than their small-cap counterparts, notable small-cap style categories of value and blend post the best score improvement readings of all size and style categories over the past six-month period, as indicated by the “Direction” column. By using the “Group Score Report” tool found in the upper lefthand-hand corner of the tool, we can refine score direction to a 30-day lookback. On a near-term basis, small and micro-cap size and style categories make up 4 of the top 5 most-improved asset class groups, attesting to the aforementioned intermediate-term (default) view. In reaction to strong yet relatively sharp score improvement for small-cap variants, each asset class displays a heavily overbought % OBOS reading above 70%, which suggests that a pullback may present a better opportunity for long exposure at this time.

The Bullish Percents indicators or BPs for short, gauge bullish participation among a constituency of individual securities by assessing the percentage of positions on Point & Figure buy signals relative to the aggregate total. BP indicators offer a picture of intermediate-term market strength, with participation readings ranging from 0% to 100% of constituents on PnF buy signals. Additionally, column reversals down from above 70% or up from below 30% may be interpreted as a necessity for offense or defense. In September, we witnessed such an event among small-cap domestic equity stocks from the Bullish Percent for Small Cap ^BPSCAP with a reversal up into Xs from below the 30% threshold to 34%. Coupled with a bull confirmed status resulting from higher tops and higher bottoms on the indicator, this development heralded and continues to affirm a highly-bullish event for small-cap stocks. Since the reversal, BPSCAP has continued higher to its current reading of 40%, displaying a mid-field position that offers an attractive point of entry for long exposure in this area.

Small Cap Shopping List of Ideas:

To build a shopping list of strong small cap stocks, we can utilize the Security Screener tool (Security Selection -> Security Screener), using the search criteria below. For this particular screen, we focused on strength and actionability by zeroing in on high attribute rated small cap stocks with plenty of trading volume. We then screened for actionable opportunities as well as provided stocks from a diverse array of sectors (There were many sectors represented in the list, ranging from perennial leaders, like technology to up and comers, like healthcare). The table below contains the shopping list. Clicking the symbol will provide access to the stock's PnF chart.  If you have a question, feel free to give us a call at (804) 320-8511. 

Search Criteria:

• Market Cap & Style: Small Cap
• 30 Day Average Volume: >500,000
• Price Range: >$20.00
• Tech Attribute: 3,4,5

Observations: 

• 69.23% of the stocks in the list have positive weekly momentum
• 100% are trading in a positive trend and 92.31% are in X's against the market (Market RS in X's)
• Average Technical attribute rating is 4.31
• Average weekly OBOS level is 45.08%

Small Cap Shopping List:

Symbol	Name	Price	Tech Attrib/Score	DWA Sector	Yield
AIMT	Aimmune Therapeutics Inc	29.65	4	Drugs	0.00
BOOT	Boot Barn Holdings Inc	42.04	5	Retailing	0.00
CATM	Cardtronics PLC	41.07	5	Finance	0.00
CCXI	ChemoCentryx Inc.	31.28	5	Biomedics/Genetics	0.00
ELY	Callaway Golf Company	21.02	5	Leisure	0.19
FSLY	Fastly, Inc. Class A	21.18	4	Computers	0.00
INST	Instructure Inc	49.12	5	Software	0.00
MTSI	MACOM Technology Solutions Holdings Inc.	25.04	4	Semiconductors	0.00
RCII	Rent-A-Center, Inc.	26.74	3	Retailing	3.74
RDFN	Redfin Corporation	21.22	3	Real Estate	0.00
SYNA	Synaptics Incorporated	58.27	4	Computers	0.00
TNK	Teekay Tankers, Ltd.	20.24	5	Transports/Non Air	0.59
WGO	Winnebago Industries, Inc.	48.39	4	Leisure	0.91

Spotlight Idea: Boot Barn Holdings Inc. (BOOT)

BOOT Boot Barn Holdings Inc ($41.77) - Retailing - Shares of BOOT continue to advance and it's now sitting two boxes away from surpassing the previous all-time high made on November 18th. The perfect 5 for 5’er ranks ninth out of 83 names in the retailing stock sector matrix and currently trades on four consecutive buy signals. Furthermore, the stock demonstrates long –term relative strength versus the market as well as its peer group, remaining on an RS buy signal since November of 2017 and August of 2016, respectively. Additionally, monthly momentum recently flipped to positive, indicating the potential for further upside from here. Overall the technical picture is positive and BOOT is actionable at current levels. Overhead resistance resides at $44 on the default chart and initial support is offered at $38 and $35. Note a move to $33 would violate the bullish support line.   

Daily Option Ideas for December 9, 2019