It’s been a relatively quiet week if you follow the major indexes, with the big-cap measures flat and some of the broader indexes down less than 1%. And that keeps the top-down evidence broadly neutral: Most indexes are trending sideways, with some (big-cap indexes, even a growth measure or two) near the top of their ranges while others are stuck in the mud. Meanwhile, things like Treasury rates, our Aggression Index and other factors remain on the intermediate-term fence.
That said, under the market’s hood, the evidence certainly took a hit this week: Growth stocks (and high relative strength stocks in general) hit air pockets, sometimes on news (like earnings) but often not.
To be fair, there weren’t a tremendous number of true breakdowns, but the action continues the sell-on-strength vibe that’s been lurking for most of the past couple of months—simply put, not much out there (whether it’s stocks, sectors or the overall market) has been able to let loose on the upside. That’s a big reason why the number of stocks hitting new highs has remained muted for weeks despite the big-cap indexes levitating near all-time highs.
Now, as we’ve written before, the action isn’t predictive of doom, per se, but more descriptive of what is going on right now, where names don’t get too stretched to the upside or downside. That said, the more upside attempts that are swatted back following what was a big run last year (especially the last few months of 2024), the greater the chance we start to see some downside probing at the very least.
All in all, we wouldn’t say this week was any sort of decisive change in the bearish direction … but it was discouraging, as many names that had gradually gathered some steam in recent weeks gave back a chunk of those moves.
We hate to keep ping-ponging the Market Monitor, but such is life in a trading range—we’ll pull the Monitor back down to a level 6 and, more important, advise being selective with buy points and, for winners, booking partial profits relatively quickly given the choppy environment.
SUGGESTED BUYS
It’s not going to be the fastest horse, but Netflix (NFLX) is in the space (big-cap, liquid, etc.) that big investors are moving toward, and the action off the earnings gap in January has been solid. We’re OK buying some on this dip with a tight percentage stop near 950.
It didn’t enter our buy range yet (which we placed above the stock’s price on Tuesday), but we find it interesting that Pinterest (PINS) actually closed up yesterday despite the growth stock maelstrom. Let’s see if it can show some decisive strength above 40.
SUGGESTED SELLS
Partial Sells
Palantir (PLTR) still looks OK overall, but it’s obviously had a big run since last summer and, after its recent gap higher, wobbled in a big way this week. We’re OK shaving off some more shares while holding the rest.
Full Sells
Corcept Therapeutics (CORT) – it’s possible earnings next week saves the day, but the giveback yesterday smelled abnormal to us.
Globe E-Online (GLBE) – tripped stop after earnings.
Reddit (RDDT) – tripped stop as its post-earnings droop continued.
Rocket Lab (RKLB) – cracked on this week’s growth stock weakness.
Royal Caribbean (RCL) – group was walloped on some headline fears; like many names, the earnings pop and breakout have failed.
Shift4 (FOUR) – cracked on earnings.
SUGGESTED STOPS
Affirm Holdings (AFRM) near 67
Atlassian (TEAM) near 279
Axsome Therapeutics (AXSM) near 113
Celstica (CLS) near 109
Cloudflare (NET) near 140
Corning (GLW) near 50
Crescent Energy (CRGY) near 14.4
CrowdStrike (CRWD) near 407
Deere (DE) near 470
DoorDash (DASH) near 182
Dutch Bros (BROS) near 69
EQT Corp (EQT) near 49.5
GitLab (GTLB) near 63.5
Guardant Health (GH) near 42.5
Nebius Group (NBIS) near 37
Netflix (NFLX) near 950
Penumbra (PEN) near 270
Remitly (RELY) near 24
Rubrik (RBRK) near 64
Shopify (SHOP) near 112
Snowflake (SNOW) near 169
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