More Near-Term Upside Potential

 
Another week of positive gains and the market is feeling warm indeed.

The S&P 500 is now bumping up against resistance, so it’s normal if stocks take a breather here. Small caps haven’t yet reached such lofty levels. With the S&P 600 Small Cap still 5% below its 52-week high, implying more near-term upside potential. That’s good for us.

The iShares Biotech ETF (IBB) pulled back a little this week, but not in concerning fashion, and the iShares Semiconductor ETF (SOXX) is moving sideways.

Small caps (+1.9%) outperformed large caps (+0.6%) over the past week, and boring old value small caps (+2.2%) partied harder than exciting growth stocks (+1.6%). Energy and health care danced the hardest, but everybody joined in the festivities. Small cap sector performance over the past week is below.


Tyler Laundon is Chief Analyst of Cabot Small-Cap Confidential. To read subscriber reviews of Cabot Small-Cap Confidential, click here.

This is an excerpt from Cabot Small-Cap Confidential, which features little-known stocks with big potential. It offers a limited number of subscribers the opportunity to discover overlooked, low-priced stocks that have the potential to skyrocket. This advisory is best suited to experienced investors who embrace volatility.


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Loews Corp.

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Biogen is the market-share leader in treating multiple sclerosis.

Weibo

One of Paul Godwin’s favorite stocks in his Cabot Emerging Markets Investor portfolio.

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