It’s been another solid, encouraging week for the market, with the major indexes all sporting solid gains—the big-cap indexes were up 2% or while the broader indexes are in the black by a bit more than 1%.
The rally of the past two weeks has certainly helped the top-down evidence improve: The intermediate-term trend of the major indexes is currently neutral but is likely to turn up in the next day or two barring a huge downturn. Moreover, while breadth hasn’t fully recovered from the December bludgeoning, it’s certainly improved, with six straight days of tame new low totals, which is a good clue the sellers have backed off.
On the other hand, the bottoms-up evidence (individual stocks) is also improving but still needs some work—most names we watch or follow have definitely perked up, though a lot are still toying with their old highs, with a good amount of selling on strength (at key resistance levels) and low-volume rallies.
Don’t get us wrong: Up is good, and after five-plus weeks of iffy action, the rally is a bullish sign. But for the here and now, there are still many names setting up as opposed to breaking out; indeed, the number of new highs in the market is still rather small despite the action of the big-cap indexes.
All in all, we’re encouraged, but want to see more among leading stocks, especially as earnings season continues. We’ve recently moved up our Market Monitor from a level 5 to a level 7, and we’ll keep it there for now—but will raise it quickly if the buying pressures strengthen.
SUGGESTED BUYS
If you own Birkenstock (BIRK), we’d simply hang on, but if not, the stock has etched a nice rest of a few weeks after its earnings ramp. You could nibble here, but we’re really looking for a breakout above 61 to kick off a sustained move. If that happens and you enter, use a stop near 55.
SUGGESTED SELLS
Partial Sells
Constellation Energy (CEG) has had a nice run from its acquisition-induced gap (buying Calpine) over the past few sessions, and if you bought last week, you can consider letting a few shares go up here with a stop just under the 300 area. The same goes for Vistra (VST), which is very strong but extended and running into round-number resistance around 200—sell some, hold the rest.
If you bought GE Vernova (GEV) in early December, we’d consider letting some shares go on this rally phase, which included a decent move after earnings. Hold the rest with a stop around 360.
Twilio (TWLO) is gapping up huge today after a bullish Investor Day and outlook—we’d sell a bit into the move if you own some and hold the rest with a stop above your cost.
Full Sells
Astera Labs (ALAB) – tripped stop, though we will say it had a nice reversal yesterday. The stock needs work but if you own some and want to hold with a stop in the 116 to 117 area, you can.
Roblox (RBLX) – stock looks totally fine, but it’s nearly three months since the breakout and it’s had a nice pop, so we’ll take our quick profit here
United Airlines (UAL) – two days of ugly earnings downside has cut into our profit, so we’ll take the rest off the table here.
SUGGESTED STOPS
Alaska Air (ALK) near 63
Antero Resources (AR) near 36
Broadcom (AVGO) near 215
Ciena (CIEN) near 84
Constellation Energy (CEG) near 295
Credo Tech (CRDO) near 65
DoorDash (DASH) near 166
GE Vernova (GEV) near 360
Howmet Aerospace (HWM) near 113
Marvel Technology (MRVL) near 107
Penumbra (PEN) near 250
Reddit (RDDT) near 150
Rubrik (RBRK) near 60
Twilio (TWLO) near 115
Urban Outfitters (URBN) near 53
Warby Parker (WRBY) near 23.5
Wix.com (WIX) near 214
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