For the major indexes, the post-election ups and downs continued this week, with the moonshot two weeks ago leading to a relatively uncomfortable dip last week, but that led to a nice rebound coming into today, with most indexes up in the 1.5% to 2% range.
Seeing as how many indexes broke out on the upside in the immediate aftermath of the election and then retested the prior highs last week, the recent rebound is obviously a good thing—and, more important, keeps the intermediate-term trend clearly up for most indexes and growth measures we watch.
Of course, the real action for the past few months (not just weeks) has come among individual stocks, and for the most part, the action there remains outstanding, with strong stocks pulling back normally before thrusting to higher highs and with more names joining the parade.
To be fair, there are a couple of yellow flags out there, one of which is the number of stocks hitting new lows each day, which is one of our favorite measures of the selling pressures on the broad market—the readings have been uncomfortably high for the past eight sessions. And then there are interest rates, with the 10-year note yield still trending up and holding just a bit south of 4.50%.
Both factors are worth watching and, along with the fact that so many stocks are stretched to the upside, are reasons to pick your spots carefully on the buy side.
Still, there’s no question the majority of both the top-down and bottom-up evidence is bullish, so we are, too. We’ll leave our Market Monitor at a level 8, though could boost it if the market holds firm and leaders start to offer up some higher-odds entry points.
SUGGESTED BUYS
Drug stocks haven’t been where it’s at, with some politics-related uncertainty in that group. Argenx (ARGX), though, has held relatively firm and is again challenging its highs—we’re looking for a decisive breakout (say, above 610 or so) as a chance to start or add to a position.
SUGGESTED SELLS
Partial Sells
Blackstone (BX) stretched nicely higher this week but is getting up toward round-number resistance near 200 and is very extended—we’re not opposed to shaving off some shares up here.
Full Sells
Celestica (CLS) – looks great from its breakout, but we’ll take the 30%-ish profit in just a month off the table.
Netflix (NFLX) – looks great, but we’ll sell this big cap on strength for a solid two-month gain.
Shake Shack (SHAK) – it’s a relatively quick turnaround but the group has turned mixed so we’ll get out even on the bounce.
Vistra (VST) – looks great and nothing wrong with trailing a stop, but we’ll book a nice profit especially as some peers look iffy.
SUGGESTED STOPS
Alcoa (AA) near 40.5
Blackstone (BX) near 169
Carpenter Tech (CRS) near 161
CBRE Group (CBRE) near 126
Corcept Therapeutics (CORT) near 48.5
Credo Tech (CRDO) near 39.5
Coherent (COHR) near 94
Dayforce (DAY) near 73
Duolingo (DUOL) near 302
DoorDash (DASH) near 152
Eagle Materials (EXP) near 291
Fortinet (FTNT) near 84
GE Vernova (GEV) near 295
Herc Holdings (HRI) near 195
Morgan Stanley (MS) near 121
Procept Biorobotics (PRCT) near 84.5
Samsara (IOT) near 46
Trip.com (TCOM) near 59
Viking Holdings (VIK) near 41
Vulcan Materials (VMC) near 269
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