With thousands of stocks to choose from, finding stock market leaders may feel like looking for the proverbial needle in a haystack. But what if you could use a metal detector that helped you home in on stocks like Nvidia? Or even better, how about the next big winner beyond Nvidia stock?
Scott St. Clair, premium product group manager at IBD, joined the "Investing With IBD" podcast to discuss the rollout of MarketSurge. In the spirit of IBD founder William O'Neil, MarketSurge charts combine screening technology with the most relevant information all in one place. The goal? To help investors find the best stocks, make better decisions and ultimately make more money in the stock market.
St. Clair shared the latest upgrades to the MarketSurge platform and, as an active trader himself, how he uses it to improve his investing results. "I'm not just the manager, I'm also a client," he quipped.
Audio Version Of Podcast Episode
Nvidia Stock And Earnings, Earnings, Earnings
MarketSurge is the rebranded version of MarketSmith, IBD's advanced charting platform. Some long-term members of the IBD community may even remember its initial incarnation as Daily Graphs. But the MarketSurge rollout offers more than just a new name and a color change.
Real estate investors always talk about location, location, location. For stock investors, the best analog is probably earnings, earnings, earnings.
St. Clair uses Nvidia stock as an example in debuting new earnings information added to the platform. His favorite addition? "For me, hands down, it's the Earnings Line," St. Clair said.
The Earnings Line takes four trailing quarters of earnings-per-share numbers and graphs them over time. It makes it very easy to see acceleration and deceleration in earnings growth and subsequent reactions in price.
In the case of Nvidia stock, St. Clair points out how the Earnings Line peaked in 2022, after the price did, and then bottomed in 2023. Again, after the price did.
In addition to the Earnings Line, more data is available on the fundamental side. Percentage calculations for EPS were added to the annual numbers on the weekly chart. Plus, MarketSurge now has four quarters of earnings and revenue estimates going forward with data from FactSet. The fact that it's all right there on the price chart makes it easy to evaluate stocks quickly.
Are The Ants Marching?
For those familiar with three-time U.S. Investing Champion David Ryan, you might have heard him reference an Ants Indicator. Some stocks show amazing strength, and when David Ryan worked for William O'Neil he helped develop an indicator to identify such stocks. It includes criteria like:
- 12 positive days over a trailing 15-day period.
- Increased volume that's 20%-25% above average.
- A 20%+ price increase over that same 15-day period.
St. Clair showed how to access a list of stocks that meet the Ants Indicator criteria. The indicator received the internal nickname of "ants" because the small marks on the chart look like little black ants, especially when multiple signals come back to back. Since the indicator uses daily signals, it can only be found on daily charts.
The Ants Indicator can put stocks showing power on your radar. Even if they're extended at the time, they can stay on your watchlist as you patiently wait for another opportunity. And big stock market leaders often give multiple buy opportunities.
St. Clair also shared that the indicator can alert you to climactic action like it recently did for Super Micro Computer.
One might wonder if similar "ants" might start appearing on Nvidia stock as its action looks like a parabolic move.
A Smarter Volume Number
St. Clair also explained how MarketSurge's intraday volume percentage change calculation got a big upgrade. Previously, the calculation would use the intraday volume compared with the 50-day average daily volume divided by the amount of time that elapsed in the trading session. It's a good theoretical calculation, assuming volume came in at a steady rate throughout the day. But that's not the case in reality.
Take Nvidia stock. With an average volume of 48.7 million shares a day, you would expect roughly 7.5 million shares to be traded in the first hour. That is, if it were evenly distributed throughout the day.
When it was trading over 11.8 million shares in the first hour of trading on March 7, the old calculation would show volume was trading 60% above average. But the new calculation compares what Nvidia stock has actually traded in the first hour of the last 50 days, not an approximation. That was closer to 20% above average.
Finding The Next Amazon Of ...
St. Clair concluded with analysis on a couple of stocks that could be the next Amazon in their respective countries. He often looks at international markets
"I'm always attracted to the analogs of stocks. The Amazon of South Africa, the Amazon of Latin America, or fill-in-the-blank," St. Clair said.
Take Sea Ltd.. St. Clair looks at this as the Amazon of Singapore. Part of the attraction was that it was a stock he traded before successfully. More important, he noticed when the shorter-term three-month Relative Strength Rating came in much higher than the longer-term ratings. It told him that something was changing in the stock. These are easily found on the MarketSurge technical analysis tab.
On the downside, there is plenty of overhead supply. After all, Sea stock dropped a whopping 90% from its October 2021 peak to its January 2024 bottom. But with the relative-strength changes and the move above the 40-week moving average, even a partial recovery could be lucrative.
On the newer side, St. Clair also analyzed Coupang, which he refers to as the Amazon of South Korea. It's a newer name, with its initial public offering on the New York Stock Exchange back in 2021. But it's well established and dominant in South Korea.
St. Clair pointed out that both Sea and Coupang have sharply ascending Earnings Lines, as they have recently transitioned from posting quarterly losses to quarterly profits.
Whether looking for the next Nvidia stock or Amazon, St. Clair says MarketSurge can help make that needle in the haystack a lot easier to find.
To try MarketSurge out for yourself, sign up for a MarketSurge trial here.
Follow Justin Nielsen on X, formerly known as Twitter, at @IBD_JNielsen.
