The Worst Stock on the Market? [3 Must-See Charts]
The market’s hottest stocks are cooling off.
After a tremendous run, many of the market’s overbought leaders slipped into the red yesterday. While the Dow Jones Industrial Average registered its second straight day of gains, the tech-heavy Nasdaq Composite slid lower by 0.7%. Semiconductors and data storage were two groups leading tech lower.
Remember, even the most powerful rallies require sharp shakeouts to keep traders on their toes. Yesterday’s drop was no different.
Futures indicate stocks are going to open significantly lower today. We could see a volatile trading session as we head into the weekend.
Even factoring in the late-week drop, there’s no shortage of big movers on the market right now. Here are some of the most interesting charts I’m watching right now:
1. Copper breaks out
Last year, we showed you how a worldwide economic recovery was helping to boost materials and mining shares. Copper was, of course, another victim of the great commodity unwind. A lot of folks pointed to copper’s reputation as a leading economic barometer since the metal is found in virtually all electronics and countless other industries.
But copper is now well along the comeback trail.
The metal has slowly crept higher since late 2016. Now, after consolidating for most of the year, it looks prepped to attack its December highs.
This week’s gain of nearly 6% has officially jolted Dr. Copper from his 2018 slumber, putting it back on track to test its January highs. We’ll explore ways to play this breakout in the days and weeks ahead…
2. The worst stock on the market?
If I had to pick the ugliest chart on the market today, it would belong to Helios & Matheson Analytics (NASDAQ:HMNY).
Helios & Matheson burst onto the scene in late 2017 after acquiring MoviePass, a subscription service allowing users to play a flat monthly fee to go to unlimited movies every month at their network of theaters.
At the time, MoviePass was hailed as a disruptor in the movie ticket business. The HMNY acquisition was major news. Eager speculators bid the stock up to more than $30 per share shortly after the announcement.
MoviePass exploded in popularity, going from just 20,000 subscribers to more than 2 million in just a few months.
That’s when the trouble started.
The app’s insane growth came at a huge price. Customer complaints soared as theater blackouts and nonexistent customer service became major issues.
Oh, and the company might also run out of money…
“In mid-April, an internal auditor said there was ‘substantial doubt’ the company would be able to stay in business,” Business Insider reports. “A few weeks later, the company said it burns about $21.7 million a month, and that its shrinking cash pile is down to $15.5 million.”
The stock hasn’t sniffed its October highs since. In fact, shares are trading for just pennies after an incredible fall from grace:
HMNY stock tanked so hard I had to alter the chart so you could make out the prices it was trading at just a few weeks ago. But look on the bright side — shares were up 8% yesterday! HMNY lives to see another day.
3. The Nasdaq looks ready to retest its breakout
Tech stocks have marched higher for almost two straight months. That’s helped the Nasdaq Composite push to new all-time highs this week.
After a powerful breakout, it looks like the Nasdaq might need to consolidate its gains:
Make no mistake: tech stocks remain important market leaders. But they can’t move higher in a straight line. Blowing off some steam here is healthy for the rally.