Ventyx Biosciences Inc. (Nasdaq: VTYX) was the biggest winner among the Russell 3000 Index over the past four weeks, gaining 236%.
This broad index includes about 96% of the investable U.S. equity market. It covers almost everything except penny stocks.
In the previous four weeks, Longboard Pharmaceuticals Inc. (Nasdaq: LBPH) was the index’s biggest winner. The stock gained 319% on news that a drug trial was delivering favorable results.
Prior to that, the biggest four-week winner was EyePoint Pharmaceuticals, Inc. (Nasdaq: EYPT). This drug maker gained 284% on similar news to LBPH.
We saw two common variables among these winners:
- All three were in the biotech sector.
- And all three were small stocks when the news broke, with VYTX having a market cap of less than $100 million.
We have two possible lessons to follow from these stocks.
One is that we should buy small biotech stocks and hope they deliver good results. (You’ll see below that’s easier said than done.) The other is that we understand there’s going to be a new stock market winner every month.
The second lesson points the way to a winning strategy.
How to Capture Each Month’s Winner
Next month’s winner is likely to be different than this month’s winner.
If we look at very small stocks, the biggest winners are likely to be biotechs. But they are also likely to be the biggest losers.
Drug stocks were the biggest losers in two of the past three months, while an alternative energy firm beat out biotech for that honor the other month.
So focusing only on biotech stocks presents a massive risk.
Now, if we look at larger stocks, we see that the winners vary each month. Some months, a biotech stock tops the list. Other months, it’s a software or hardware company. It could also come from the energy sector … or any other sector for that matter.
The important point is that the variability in returns tends to follow a predictable pattern that we can trade.
This pattern is at the heart of my Apex Profit Calendar…
Find the Best Stock in the Right Sector
I researched decades’ worth of stock market performance, and the data revealed how some sectors delivered predictable gains at different times of the year.
Armed with this data, we aren’t hoping to stumble upon a stock that announces good news. Instead, we know which sector is likely to deliver a market-beating gain at different times of the year.
We also know when that seasonably favorable period is likely to end and what the next sector to trade is going to be. This is the starting point for a trading strategy that crushes the market.
Starting with knowledge about which sector is likely to be a winner over the next few weeks — with predetermined entry and exit dates based on my Apex Calendar — I can look for the best stock to own during that time.
As my Apex Alert subscribers know, I combine seasonality with Adam O’Dell’s Green Zone Power Ratings. I use seasonals to find the right time to buy into a sector. Then, the Power Ratings help me find the best stock.
So Apex Alert uses two powerful methods to find the right stock at the right time.
Since the launch of the strategy, our trades have delivered strong results, and our exceptional performance is in line with the backtest. We closed two winning trades this month, and all six of our closed positions since launching in October 2023 have been winners.
Here’s just a glance at what some subscribers have said about trading the strategy so far:
Chuck M: Made just over 5% and 13% on CW and SNPS, respectively. Opened a call option on CW and made 48% on that. Thank you very much!
Mark P: I am very pleased with the results and the strategy. I like the compounding aspect of the strategy. The signals are very easy to follow.
Kindra S: Thank you for the positive Apex trades! This week, I realized a 3.61% and a 4.11% gain on CW, held in 2 separate accounts. I also realized a 12.67% and a 13.10% gain on SNPS. My total profit for the strategy so far is 28%. Thank you for sharing your expertise! This is working much better for me than my options trading attempts!
John C: Hi, Col. Apex is working Great! Making Money!
Douglas R: CW +2.3% — Closed the trade a bit earlier than I wanted to after watching the chart throughout the trading day. SNPS +14%. Happy with the results.
Jim L: Thank Mr. Carr for the detailed briefing you put out today after the closing about SFM, that helped me a lot in building my Trade Plan. Also thanks for coming up with the Apex Strategy, so far is the most accurate I’ve ever had.
Our two open positions also show gains, including a double-digit gain in Sprouts Farmers Market Inc. (Nasdaq: SFM). We opened that position on February 15, just ahead of earnings. And our trade has benefitted from the stock’s better-than-expected quarterly results.
We won’t own SFM for long. With the Apex Calendar, subscribers already know the precise day we’ll sell the position … and which sector we’ll move to next.
If you’d like to see how you can join them in following the next Apex Alert signal, click here.
Until next time,
Mike Carr
Chief Market Technician