Market Commentary: 3 Breakouts Signal Santa Claus Rally

Barely a couple of weeks ago, the tenor of the markets changed. Cathie Wood, the poster girl for high growth stocks, reported massive gains among her portfolio of stocks.

In a single week, Nurix Therapeutics gained 16%, Pinterest rose by 19%, Verve Therapeutics flew higher by 18%, Ceres was up 15%, Shopify soared by 22% and Palantir was up 20%. These were just a few of the many stocks that were on a tear.

The bigger takeaway from the moves was that growth stocks were back with a bang. But the market, being the confusing wealth creation vehicle it is didn’t make it easy for traders.

On November 9, the market appeared to fall off a cliff, and a host of day traders grew nervous that, following Jerome Powell’s speech, the holiday season would be bleak.

In spite of these concerns, structural flows were not stopped and a day later, the market soared again. The Dow Jones Industrial Average ran up by almost 400 points in a single session, representing a 1.15% gain, the NASDAQ reported a 2.05% gain and the S&P 500 was up by 1.56% too.

Amid the resumption of bullish sentiment, some stocks demonstrated very attractive breakouts. Let’s take a look at them.

Key Points

• In spite of the stock market scaring investors following Jerome Powell’s most recent speech, it appears poised to power higher and lead to a Santa Claus rally. 
• Stocks have have broken out include cybersecurity firm, Crowdstrike, and Stan Druckenmiller favorite, Datadog.
• Of all the stocks breaking out right now, Palantir appears to be the strongest, bursting above old resistance and following through on its recent gap higher.

Crowdstrike Breakout

Crowdstrike found support with its 10-day moving average and appears to have held the gap on strength. The stock is looking like a strong contender to move higher near-term.

Datadog Breakout

Also in the tech sector, Datadog closed very well last week near its earnings day highs and appears poised to push further up towards old highs.

This is the type of chart that makes day traders mouths water, a gap up followed by short consolidation and a fast resumption of the bullish trend.

If classic technical analysis plays out here, Datadog could power higher to the $120 region.

Palantir Breakout

Perhaps the strongest of all the stocks right now is Palantir, which is absolutely soaring after gapping up following earnings.

It’s already showing tremendous conviction and strength to power ever higher. Indeed it’s been so strong that it’s probably best to wait for another red day before chasing.

If you’re a shorter term trader and looking for stocks that are poised to move higher and showing tremendous relative strength, Palantir, Datadog and Crowdstrike are exemplifying all the criteria to signal excellent money-making opportunities.