Conviction: 4/5
Main thesis
Misc Info
Potential Risks
Main thesis
- Retrace to .786 fib level from 2016 lows. This is an unconventional level but it coincided with medium-term resistance from 2009-2020.
- RSI-W touched historical bounce area (however, if we wait for bullish divergence there could be another leg down)
- RSI-D showing bullish divergence
- Touching lower bound of channel (2016)
Misc Info
- P/S level of 7ish is high on absolute level, but on lower end of range relative to other high growth names
- Healthcare (
XLV
) looks good compared to
SPY
, could carry this up as well
- High margin and high growth
- Very healthy quick ratio
Potential Risks
- Bullish div = another leg down
- Very negative FCF (not sure why?)
- Channel does not include last major recession (2008)
- General markets are very expensive, and we all know correlation goes to 1 in selloff.
- High growth / expensive names seems like will sell off more than general market
