In a recent StockWaves webinar, we examined the IBD 50 using the Innovator IBD 50 Fund (NYSEARCA:FFTY) ETF. This can be a good instrument to use to examine momentum, because of the way Investor's Business Daily selects their list targeting names they feel are generating outstanding profit growth, big sales increases, wide profit margins and a high Returns on Equity. During periods of market volatility there can be pretty high turnover in the list, and while the FFTY does also rebalance weekly we feel that it can give a pretty good snapshot of the current momentum names in the market. Furthermore, as this index seems to get hit harder relative to the broad market in down trends, looking for early warning signs of "toppiness" is not a bad idea.
Indeed, as we look at the Elliott Wave structure of FFTY we can see a corrective bounce structure nearing completion. And, as we delve deeper into some of the current components, we see further evidence that the second half of a larger market correction might be trying to resume. These stocks covered today are not at all the only names showing clear signs of pending tops, merely the ones that more clearly count as "B-waves" topping with specific targeted support regions for the moves down.
While a new issue and lacking more history, PagSeguno Digital Ltd (PAGS) is confirming our "CABpIPO" pattern with a clear ABC corrective move up in the blue (B). Alexion Pharmaceuticals (ALXN) at first look is very different from many other names in the FFTY, but it too is topping in a B-wave of one degree larger tracing out a wider (A)(B)(C) expanded flat up from the 2017 low. MGM Growth Properties LLC (MGP) also counts a wide (A)(B)(C) up from early 2018
