Small caps, Clean energy and Biotech

Good morning!

I hope you followed the small caps yesterday because they have been the winners of the day, together with clean energy. Unfortunately $QS has not proven itself(even though it can still be in play), but I shifted gears towards $FCEL, which has been a star in 2020 and it seems to have woken up. The COP26 summit has been in the media and the pledges made by the countries seemed to have moved the clean energy stocks. I got out of the tech sector as $GOOGL and $MSFT proved to have been soft, for a small loss. I am waiting for the FED talk because it seems that the market is fearful of tapering and inflation, and tech is one of its targets. Growth stocks are not as affected by these and money might flow into them. At the same time the small bios and their ETF $XBI seem to have made their first move up in a while. I am going to focus on small caps and concept bios for today, and avoid the tech sector altogether.

$IWM Chart

I was conservative in my approach yesterday and said it should hold and get above $230.72, but it did not only do that, it went above June’s high and closed there. This is a powerful move with a lot of juice, and my calls for January have been paying me handsomely. This move got me into small stocks like $FCEL, which is also a clean energy play, and into $VUZI, which is about augmented reality. I tried to hit all areas with my small caps, waiting for a day 2 continuation. Today the $IWM should hold $233.64 and consolidate here.

$FCEL Chart

This clean energy small stock has been a rockstar in the end of  2020- beginning of 2021, going all the way from $2 to $29. When the small caps and clean energy went downward it retreated all the way back to $5 and in the last week or so it has tried to push again above all the moving averages. After milking this stock and riding it for 25 plus points I decided to come back to it now that it is again above all lines. I trimmed along the way yesterday and today it should hold $8.93 and move a leg higher to $9.80 and possibly $12 in the next days.

$VUZI Chart

I have flirted with this stock in the previous weeks with some call options for the end of November when the $IWM was trying to get out of this channel and failed. I did not buy stock then because it was under all the lines and some calls seemed a safer way to test the waters. They were almost worthless before yesterday, but I kept them since I was waiting for this move in the small caps, combined with the virtual reality news circulating in the past week. This is a leading company producing smart glasses and augmented reality products, delving also in the healthy sector. It is a perfect example of a small cap American innovative company. If today it hold its 200 day EMA at $13.15 I am looking to add to my position since it has room until $19.33 and higher.

Yesterday was one of the first days in which I was invested in small caps, clean energy and biotechs, with tech missing from my portfolio. It is all about timing and I feel this is the time for these types of stocks, especially until we have market discovery after the FOMC meeting on Wednesday. The trend is your friend, and I grabbed its strong hand and followed it. The idea is not to wait for the market to see you are right, but for you to get a feel of the market before the news is priced in. Here at EClub Trading we try to guide you through the news and chatter and offer you the easiest way to making cash and learning how to do it yourselves.

Have an amazing day!

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