WHAT TO DO NOW: The market is again mixed today, with the major indexes holding their own—but the under-the-surface action remains very hit-and-miss among growth stocks. Today’s bulletin concerns Palantir (PLTR), which has been churning for many weeks and is now starting to slip. It’s not a death knell, but we’re going to trim here, selling one-third of our remaining shares in the stock.
==
The major indexes are up selling off today after some recent upside, while under the surface we continue to see lots of sloppiness (at best) and weakness (at worst) among many stocks, including in the growth arena. Moreover, our Cabot Tides remain negative and very few names are hitting new highs.
We’ve been cautious for a few weeks now, holding a good-sized chunk of cash—nearly 50% coming into the New Year, and after our sale of AXON yesterday, up to 56%. Bigger picture, we think a lot of growth stocks are still mid-stage and have further to run, but in the intermediate-term, we’re still seeing air pockets are big advances.
Thus, we’re willing to pare back and be defensive near-term while being ready to pounce should the bulls return.
Today’s message is about Palantir (PLTR), which has been a big winner for us and even showed some relative strength at times last month—but overall, the stock has now been churning (lots of ups/downs without any progress after a big run) and is beginning to fall off. We’re not ready to completely cut ties with it, but PLTR is our largest remaining position (about 10% of the account), so we’re going to pare back again, selling one-third of what we have left. SELL ONE THIRD OF PLTR, HOLD THE REST
AppLovin (APP) is also getting hit hard today and we’re monitoring it. Of course, we’ve already sold the vast majority of our initial position, and while this morning is ugly, the stock is at the bottom of its multi-week range, with the 50-day line near round-number support at 300. We’ll hold our small-ish position here but are watching it closely.
The partial sale of PLTR will leave us with something around 59% in cash, so we’re clearly hunkered down, and we’re not opposed to putting some back to work if things clear up. Remember, early January is often wild, featuring lots of volatility and reversals, so we’re open to anything.
But given the pattern of the evidence in recent weeks, we’ll sit tight with the cash hoard here and see if the bulls can step up.
Don’t hesitate to email me directly (mike@cabotwealth.com) if you have any questions.
Copyright © 2024. All rights reserved. Copying or electronic transmission of this information without permission is a violation of copyright law. For the protection of our subscribers, copyright violations will result in immediate termination of all subscriptions without refund. Disclosures: Cabot Wealth Network exists to serve you, our readers. We derive 100% of our revenue, or close to it, from selling subscriptions to our publications. Neither Cabot Wealth Network nor our employees are compensated in any way by the companies whose stocks we recommend or providers of associated financial services. Employees of Cabot Wealth Network may own some of the stocks recommended by our advisory services. Disclaimer: Sources of information are believed to be reliable but they are not guaranteed to be complete or error-free. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks involved. Buy/Sell Recommendations: are made in regular issues, updates, or alerts by email and on the private subscriber website. Subscribers agree to adhere to all terms and conditions which can be found on CabotWealth.com and are subject to change. Violations will result in termination of all subscriptions without refund in addition to any civil and criminal penalties available under the law.
