Last week, we saw the market begin to hesitate and leading stocks begin to take on some water on some earnings reports—combined with good-not-great action from the major indexes in the weeks before, that put the overall intermediate-term trend on the fence.
However, this week was a big one, with the election and Fed on tap—the actual news doesn’t matter to us as much as the market’s reaction to the news, and so far, it’s been terrific, with the indexes racing to new highs and with tons of leading stocks powering ahead, including a batch of names that reacted very well to their reports.
Looking at the evidence, the trends are clearly pointed up once again (for the major indexes and growth measures) and we’re pleased to see some secondary factors (like our Aggression Index, which compares the growth-oriented Nasdaq to defensive consumer staples sector) rally pick up steam this week.
Of course, not everything is perfect out there—Treasury rates have come down a bit the past couple of days, but are still trending up. Plus, we’re still in the thick of earnings season, and while some names have been super-hot, there are still a fair number of blowups as well, so in many ways it’s a stock-by-stock situation. Really, managing your portfolio will be key here, both in terms of partial profits, trailing stops and, of course, finding higher-odds entry points among new buys.
Even so, our overall philosophy is simple: Up is good, and so we take the action as a positive—we’re moving our Market Monitor back up to a level 8 and could go higher than that if the good vibes continue.
SUGGESTED BUYS
It’s not making the most headlines, but Eagle Materials (EXP) has done nothing wrong since its big volume cluster in September, simply hacking sideways while its 50-day line caught up. And now that earnings and the election are out of the way, the stock has popped to new price and RP peaks—we think it’s a decent entry around here with a stop around 285.
Taiwan Semi (TSM) gapped up nicely on earnings and then eased back to its 25-day line for a couple of weeks—but now looks to be resuming its move. If you don’t own any, we’re OK nabbing some here with a stop around 183.
SUGGESTED SELLS
Partial Sells
AppLovin (APP) is one of a handful of names that have gone ballistic this week on earnings, with shares rallying 46% yesterday—and this comes after a big run since August. We think it’s OK to book some profit up here and hold the rest.
We just recommended Credo (CRDO) a couple of weeks ago but it’s already spiked higher—plus, it still has earnings to get through (near Thanksgiving). We think taking some quick profits here makes sense, and then see how the rest does as it gets closer to earnings.
Powell Industries (POWL) has gone vertical this week, and still has earnings coming (looks like on November 19). Book some profit up here and then see what comes.
Viking Holdings (VIK) has a similar story—popping to new highs, showing us a solid gain, but earnings are out in two weeks. Consider taking some partial profits here and riding the rest.
Full Sells
Clear Secure (YOU) – big disappointment on earnings
Capital One Financial (COF) – looks good, but we’re going to take the quick 10%-ish profit thanks to the post-election pop
Glaukos (GKOS) – got shaken out on Tuesday. If you still own it, you could hold with a stop near 130.
JD.com (JD) – tripped stop on Wednesday
Wheaton Precious Metals (WPM) – tripped stop on post-election selling.
SUGGESTED STOPS
Arista Networks (ANET) near 384
Blackstone (BX) near 160
BWX Technologies (BWXT) near 114
Carpenter Tech (CRS) near 154
CBRE Group (CBRE) near 123
Coherent (COHR) near 92
Duolingo (DUOL) near 287
DoorDash (DASH) near 146
Eagle Materials (EXP) near 285
Fortinet (FTNT) near 77
Powell Industries (POWL) near 269
Jacobs Solutions (J) near 136
Samsara (IOT) near 44.9
Taiwan Semi (TSM) near 183
Travelers (TRV) near 243
Vistra (VST) near 120
Viking Holdings (VIK) near 38
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