We got some nice feedback on our top-down scan from last weekend so I think we’ll make it a regular thing.
This is a clear and simple leadership scan, which is why I like it so much.
We are drilling down to a trade idea following the traditional top down approach. It doesn’t get any better than that.
We start with the best sectors, then drill into the subgroups. We pick one, and then take a look at the top stocks in it.
This week, Materials is the big standout—jumping two spots in our sector rankings. It’s no surprise. Commodities are on a tear and participation is expanding. This means we should expect more materials stocks to start working. And we’re already seeing it.
Upon digging deeper, we found Metals & Mining stocks have been doing a lot of the heavy lifting for the sector.
Here is a look at our overall industry rankings, which shows Metals & Mining cracking into the top 10.
So let’s just keep it right here. This is definitely the right subgroup to fish in right now. Gold. Copper. Silver. It’s all working.
Every time we have put a trade on a commodities stock over the past few months, we’ve been rewarded for it. That’s information. We want to stick with that playbook.
These are the Top 10 Metals & Mining names, sorted by relative strength.
My favorite setup from the list is the silver miner, First Majestic Silver Corp $AG:
The stock is on the verge of completing a textbook bearish-to-bullish reversal pattern.
Price is pressing against the upper boundary of the base around 8.10, which also coincides with the anchored VWAP from the 2021 high. If we’re above there, the path of least resistance is higher for AG.
The stock is a bit extended over the short term, but this is a primary trend trade, so we want to be patient.
I like it long against 8 with a target of 16.40.
I’m already in. I’m also in some calls right now with our Breakout Multiplier members. We put the trade on a few weeks back and it’s been a big winner. I’ve unlocked the post and you can read it here.
That’s it for today. Let us know what you think of our new scan. We should do it every week, right?
Our team at ASC is constantly running these kinds of top-down scans. If you want access to our research and the trade ideas that come out of it, join us today—risk free.
Reach out to Mary and she might even hook you up with that discount promo.
