A stampede to get in to beaten down stocks | stockbee


A stampede to get in to beaten down stocks

What you saw yesterday was a stampede to get in to beaten down stock. The top 10 stocks up the most yesterday were all beaten down stocks. And they were up on huge volume. ENER, HSOL, EK, JASO, JKS, SOL, TSL, STP, WFR, YGE were up 20% plus in few hours  after open.

No matter how you look at it, weak , beaten down stocks leading the action is a loud warning sign. Couple that with failures of breakout to 52 week high. And very low appetite for growth and momentum name is telling you something.

It is not a usual market behavior. Rallies lead by beaten down stocks tend to be short lived. And more than that market is up 15 to 20% kind from October low and at this stage if the rally has longevity you should not be seeing this happening.

When junk starts to fly +people tell you it is different this time+extreme bullish sentiments by retail investors + 50% plus sentiment reading by adviser+ failure of b/o near high= possible correction brewing.

So enjoy the party while it lasts but don't let the unusual action fool you.

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