Recent market action has reminded Real Money’s James “Rev Shark” Deporre of what the stock trading was like in February, and it has him feeling watchful.
Deporre noted recently in a column on Real Money that “the major stock market indices are running red – and the situation looks even worse with a closer look.”
“Breadth is moving close to three-to-one negative,” Deporre said. “New 12-month highs have shrunk to 125, there are less than 10 stocks up more than 10%, and the selling is correlated and without much regard to fundamentals.”
Deporre touted increased caution right now, with selling pressures appearing on trading dashboards more frequently.
“In this sort of environment, I err on the side of selling, and I'm confident that I can buy back my favorites as they develop again,” he said. “Back in February, selling of this sort went much deeper than many traders anticipated, and I'm on guard in case that develops again,” he added.
Deporre did say he'd found one name that interested him enough to warrant a buy. He said Ocular Therpeutix (OCUL) - Get Ocular Therapeutix Inc Report "has not bounced much recently compared to other biotechnology names.” In addition the stock has picked up some analyst support recently "It also has a Food and Drug Administration decision coming soon to serve as a catalyst.”
Rev Shark says he’ll look at other buying opportunities, but with extreme caution in a period that’s shaping up to be geared toward more sellers than buyers.