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Why Traders Need to Pay Attention to Small Cap Stocks Right Now

By  +Follow August 12, 2013 6:27AM
Tickers Mentioned:

In this week's interview with Toni Turner of TrendStar Trading Group, we discuss the explosive quarter for social media stocks, and possible weakness in the small cap space, and the implications that could have on the broader market.

EQ: While we're currently in the slower summer months and the broader indices have been relatively quiet, we're still seeing some meaningful movement in individual names. Is this a stock picker's market right now?

Turner: I believe it is. I amlooking in two sectors right now,  Industrials and Materials. In Materials, chemicals especially have been doing well. If you will notice, DuPont (DD) and Dow Chemical (DOW) have done very well recently. I am also watching LyondellBasell Industries (LYB) , which is based in the Netherlands. I’m just watching it to see if it will stay above the 50-day moving average. It’s consolidating here.

I’m not taking on a lot of big share size here because I am just a little dubious, and honestly, am expecting  summer profit-taking soon, unless we can get some really good news that will bring volume back in. Right now, investors are looking ahead to September, with the prospect of decreasing stimulus and the debt-ceiling battle in Congress. Neither of those events are positive for the markets.

EQ: Social media stocks have had a very impressive earnings season, with some of the leaders maybe hitting their turning points. Has this group caught your interest?

Turner: I have watched it from afar but it does appear that the Global X Social Media Index ETF ($SOCL) has done very well recently. It’s risen from $14 to $17, so it’s gone up about 20 percent in the last month or so on the earnings of companies like Facebook (FB) .

Facebook looks overvalued to me in the short term. So, if I were to enter, I would wait for a pullback. That also is true for LinkedIn (LNKD) . I would like to see it at a more reasonable valuation. .

EQ: One area of the market that often gets overlooked is the small-cap market, which could serve as a telling indicator of the broader strength of the market’s direction. Looking at the Russell 2000, what are you noticing here?

Turner: I am noticing that while the other indexes are up, the iShares Russell 2000 Index ($IWM) is not as enthusiastic as the Dow Jones Industrial Average, the S&P 500, or the Nasdaq. Actually, if you look at the intra-day chart, the IWM has a pivot line at the  $104.20 level..

IWM’s price is hovering just above that level now. Can it stay above it and then use it for traction? We will have to see if it can remain above it, and then climb up to the next  line of resistance of $104.70, and then in turn, use that  for support. The IWM has a lot of work cut out for it here. It’s made up of domestic U.S. companies mostly, and we know that if the IWM or the Russell 2000 is not as enthusiastic or excited as the rest of the market, then at some point the broader market usually follows it downward.

EQ: Are there any other sectors or industry groups that you're watching right now?

Turner: I am back to my favorite, which is the Utilities sector and the Utilities Select Sector SPDR ($XLU). People may say that it’s not exciting, and many traders ignore  it, but in Toni’s Market Club, many of our biggest and easiest profits have come from taking position trades and stocks from the XLU. For example, we held Aqua America Inc. (WTR) from December of 2012 through about April of this year for about a 20-percent no-stress gain .

I am still interested in water and I am still watching it now. With global clean water shortage a very real concern, I am keeping an eye on the PowerShares Global Water Portfolio ($PIO) to see if it breaks higher from here.

Results for DD
16 Apr 14 04:14:20
Best #Sentiment 16Apr #DJ30 $JNJ , $DD , $T http://t.co/fYkq2b2f21
Maxx Leatherby
16 Apr 14 03:43:23
Earnings news on $EXR $DD $BEAV $GLD #liquidity http://t.co/jKVG1nZD3h
16 Apr 14 03:12:04
$DD: Early Glance: Chemicals companies http://t.co/mrtFvqOEB2
Esau Braxton
16 Apr 14 03:10:04
$DD Free research on $CMP $WAT $LIVE #financialnews http://t.co/Z17dFpIJkv
16 Apr 14 03:01:20
Weekly Dow #Stocks Trend $KO $MCD $CVX $TRV $XOM $T $JNJ $CSCO $INTC $UTX $V $GE $CAT $BA $MMM $IBM $PG $NKE $DD @ http://t.co/6KoVUcHkIF
Media Sentiment
16 Apr 14 02:41:07
$DD received a new alert. Find out why at http://t.co/WHJp8eTsSr #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 43
Laird McQuillen
16 Apr 14 01:18:03
Are you considering selling $DD $XYL $COV $GAIN #personalfinance http://t.co/fplwXmYeBM
US Banking News
16 Apr 14 00:35:41
E.I. DuPont de Nemours & Co. $DD Set to Announce Earnings on Thursday http://t.co/n5ndLD8bZZ
16 Apr 14 00:12:34
$DD: Early Glance: Chemicals companies http://t.co/mrtFvqOEB2
Milford Schwarz
15 Apr 14 23:49:09
Looking for more info on $DD $GCI $CELG $USD #NSE http://t.co/3EtyatCt5t
Mari Keith
15 Apr 14 23:17:50
Should you hold or add to $BOKF $DD $ADBE $PCLN #newsletter http://t.co/JcdvGKxDoC
Stock Herald
15 Apr 14 23:13:05
$DD: Early Glance: Chemicals companies http://t.co/sTjkQPVAWp
15 Apr 14 22:12:36
$DD: Early Glance: Chemicals companies http://t.co/XBgIjxtYFR
15 Apr 14 21:12:34
$DD: Early Glance: Chemicals companies http://t.co/mrtFvqOEB2
15 Apr 14 20:57:21
RT @DuPontAusNews: Our 2013 Annual Report is online. See a video from CEO Ellen Kullman and learn about our targeted growth strategy http:/…
Cecily Humphrey
15 Apr 14 20:49:17
$DD Considering investing in $INTA $NOW $LGND #NASDAQ http://t.co/aaRHFOb5W3
Leighton Cameron
15 Apr 14 20:40:37
$VRSK Awesome #Stock #Research $EL $DD $BWP #equity http://t.co/r1mZNEc6Sp
Stock Herald
15 Apr 14 20:23:09
$DD: Early Glance: Chemicals companies http://t.co/sTjkQPVAWp
15 Apr 14 20:15:45
$DD - Early Glance: Chemicals companies -> http://t.co/CJiOlP9jJk #stock #stocks #stockaction
DuPont News ANZ
15 Apr 14 19:13:31
Our 2013 Annual Report is online. See a video from CEO Ellen Kullman and learn about our targeted growth strategy http://t.co/pFGw3g9rdL $DD
15 Apr 14 19:12:38
$DD: EI DuPont de Nemours & Co. Earnings: Will Its Transformation Bring Gro... http://t.co/EPAl1QGjhf
Octavio Van
15 Apr 14 19:08:27
Are you putting your money in $NOV $EL $DD $CBM #personalfinance http://t.co/ibtYj7ngj1
HDI Securities, Inc.
15 Apr 14 18:18:51
Double Dragon properties corporation $DD expects 1 Billion pesos net income by 2016 says chairman Mr. Sia (source:Bloomberg)
Investment Ace
15 Apr 14 18:17:51
Could be breaktout time on $DD $BG $LMCA $FEYE Visit http://t.co/yQu6oJAsHI
15 Apr 14 16:01:23
Dow #Stocks Trend $KO $JNJ $CVX $T $XOM $MCD $TRV $CSCO $INTC $UTX $V $BA $MMM $GE $CAT $PG $IBM $NKE $MSFT $DD @ http://t.co/TvzJfcJOET
15 Apr 14 15:59:33
TAP's updated chart on $DD. "A Dragon egg means another Dragon; soon it'll be Double Dragon" :) http://t.co/HLvhKZKKKm
15 Apr 14 15:50:08
$DD: Monsanto Company and the Use of Terminator Seeds http://t.co/W1DAOD9dtO
Alysa Partin
15 Apr 14 15:44:22
Should you buy, sell or hold $ZTS $DD $ERIE $S #money http://t.co/eSANhuivWm
15 Apr 14 15:36:10
$DD - Monsanto Company and the Use of Terminator Seeds -> http://t.co/iiLH1sPMTj #stock #stocks #stockaction
Will Keifer
15 Apr 14 15:08:58
#Stock Watchlist you should be looking at $MCO $DD $TDS $PCLN View now http://t.co/45KOYsNpPs
Donte Dallas
15 Apr 14 14:30:24
Stocks I'm keeping my Eye on...should you? $DD $NEE $WAT $DF Give it a try http://t.co/YTrsmtc2NQ
15 Apr 14 13:06:17
$DD: DuPonts Agri Business: The Future Growth Driver http://t.co/aJl36pr1fB
Orson Gunnero
15 Apr 14 13:01:54
$DD Considering investing in $MRO $CRM $CHTP #NSE http://t.co/M4U6DOd7yt
15 Apr 14 13:00:31
$DD - DuPonts Agri Business: The Future Growth Driver -> http://t.co/qPB6nyaHYt #stock #stocks #stockaction
15 Apr 14 12:58:51
Dow #Stocks Trend $KO $CVX $MCD $JNJ $XOM $INTC $T $TRV $CSCO $PG $IBM $WMT $CAT $UTX $DD $NKE $MSFT $V $GE $AXP @ http://t.co/TvzJfcJOET
Gold Stock News
15 Apr 14 12:56:00
$DD DuPont's Agri Business: http://t.co/YtdUjvYrhJ
Market Int Center
15 Apr 14 12:42:28
Du Pont $DD Trading Near $67.28 Resistance Level ( http://t.co/CjqK8OUCaG )
Lilly Bynum
15 Apr 14 12:38:26
Latest Earnings info on $FLT $TRZA $DD $CI #financialnews http://t.co/d4o2LrNRsR
Lekisha Longoria
15 Apr 14 12:28:12
$NDAQ Are you hanging on to $C $DD $GLD #money http://t.co/5ElKRWmzih
15 Apr 14 12:22:36
$DD: DuPont Earnings Preview: Early Seed Shipments, Lower Chemical Prices T... http://t.co/xFMz0gDht2
15 Apr 14 12:21:01
Retweet - Would Arnold Schwarzenegger be a good spokesman for @MonsantoCo? http://t.co/AXDDDt5M5l $MON $SYT $DD #GMO #science
Rock Bage
15 Apr 14 12:04:19
RT @DuPont_News: Our 2013 Annual Report is online. See a video from CEO Ellen Kullman and learn about our targeted growth strategy http://t…
By  +Follow August 12, 2013 6:27AM



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