This year has been riddled with U.S.-China trade war rumors, impeachment talk and all sorts of notable initial public offerings. But 2019 has also been a year that saw the S&P 500 repeatedly hit all-time highs. Going into what many have predicted will be a strong 2020, what should smart investors be taking away from the last 12 months? In this episode of “Moneyline” with Matt McCall, he has the perfect packing instructions. Grab your suitcases (or your portfolios) and listen up.
The big indexes, especially the record-setting S&P 500, have certainly been in focus lately. But there’s one McCall thinks deserves a bit more attention. The Russell 2000, home to a collection of small-cap stocks, rallied just before Thanksgiving to reset a 52-week high. What does this mean?
For investors, an easy way to track this index is through the iShares Russell 2000 ETF (NYSEARCA:IWM).
After several months, the IWM exchange-traded fund crossed resistance at $160, and now it appears poised for a 2020 breakout. Using history as his guide, McCall says it’s looking likely that the coming year will be a good one for the market, and for small-cap stocks overall. Since the creation of the Russell 2000, almost every time such a breakout has occurred, the following 12 months have brought impressive rallies.
So, investors should be gearing up to watch small-cap stocks after the ball drops. But those aren’t the only names worth watching in the market. So far, 2019 has brought almost 350 IPO stocks to the New York Stock Exchange and the Nasdaq. Can you name more than 10?
Big IPO names definitely drew attention this year, but not all for the right reasons. Uber (NYSE:UBER), Lyft (NASDAQ:LYFT) and Beyond Meat (NASDAQ:BYND) have largely disappointed. Plus, poor WeWork didn’t even make it to its big day.
Just as with any group of stocks, IPO stocks did offer a few diamonds in the rough. One, a competitor to Splunk (NASDAQ:SPLK), went public in August 2019. This company, Dynatrace (NYSE:DT), looks perfect to McCall based on the pattern it has forming on the chart. Unlike novice investors, he looks for what he dubs the “J-curve.” After a post-IPO rally, these new public companies often drop, sometimes below their opening price. This is exactly what DT stock did. Now, though, it’s breaking out again, signifying that it’s completing the “J.”
At this point, Dynatrace stock looks rather interesting to McCall, but he’s not making a “buy” call yet. DT specializes in application performance monitoring, incorporating the cloud and artificial intelligence. It certainly has huge potential in 2020.
Keep your eyes on these small-cap and IPO stocks headed into the new year. And don’t forget to tune in to “Moneyline” with Matt McCall for more market insight and his analysis on this past decade’s highest-returning names. Your financial freedom could be just around the corner.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.