Traders spend countless hours scouring markets, niche segments, which appear on the verge of overtake all markets. The only group that has earned its place on the monitoring list, traders is a mid-cap growth stocks. This group traditionally includes the companies whose market capitalization is between approximately $ 2 billion for just north of $ 10 billion. These companies often have earnings power that is in the game to stay ahead of the broader market. In this article, we will take a look at several charts and attempt to determine how operators are seeking to position themselves in the weeks and months to come.
iShares S&P Mid-Cap 400 Growth ETF (IJK)
When you are looking to gain exposure to niche segments such as the mid-cap growth companies, traders will often turn to exchange-traded funds (Etfs), such as the iShares S&P Mid-Cap 400 Growth ETF (IJK). As you can see on the chart below, the price has recently moved above the combined resistance of its 200-day moving average (red line), and dotted curve trend. The escape and subsequent re-test the new support near $218.35 suggest that the bulls are in control of the amount of movement. Traders will now most likely their short-term target price is close to the 2020 high of $247.22. Stop-loss will probably be placed below $213.58 in order to protect against any surprise selloffs.
FactSet Research Systems Inc. (FDS)
As one of the main titles of the IJK ETF, FactSet Research Systems Inc. (FDS) will likely capture the attention of many traders because of its strong bullish trend and the recent bounce from the 200-day moving average. The break-beyond the dashed curve, which is indicated by the blue circle, is a technical indication that the bulls are in control of the amount of movement and that the next stage of the uptrend could just be beginning. From a risk management perspective, stop-loss orders will probably be placed below $293.27 or $271.15, depending on the risk tolerance and investment horizon.
Catalent, Inc. (CTLT)
Another top holding of the IJK ETF, which could capture the attention of active traders is catalent, Inc. (CTLT). As one of the companies in the hunt for a vaccine to COVID-19, the share price has responded to the increase of speculation, which has pushed the price above its 200-day moving average and a key ascending trend line. Based on the recent price action, technical traders expect the upward trend to continue and to place stop-loss below the support trend line or its moving average of 200 days, depending on the risk tolerance.
The Bottom Line
The mid-cap growth segment of the financial markets seems to be in a better position than most from a technical point of view and will likely capture the attention of bullish traders assets for the weeks to come. More specifically, in the vicinity of the support levels and breakouts beyond key levels of resistance provide enough trading opportunities with a high level of risk.
At the time of writing, Casey Murphy did not own a position in any of the assets mentioned.