It’s been a bit of a wobbly week, with most major indexes in the red and more than a few leading stocks easing lower after solid runs. Coming into today, the big-cap indexes are off less than 1%, growth measures are generally off 1% to 2% and some broader indexes (small caps, etc.) are off a bit more.
Short term, it’s hard to ignore the uncertainties out there, namely earnings season (which is really revving up for many growth titles the next two to three weeks) and the election (November 5), not to mention some near-term yellow flags like sentiment (a bit complacent in our view) and, more important, rising Treasury rates—the 10-year note yield is up another 0.1% this week and stands well above its now-uptrending 50-day line.
All of that is good to be aware of and probably means it’s best to be selective on the buy side; we’re not really fans of piling into stocks with good-sized positions right ahead of earnings reports anyway.
But the overall evidence remains in the same place: Bullish, with the major indexes looking good (intermediate-term trend up, though many indexes are still battling with prior resistance; the 500 level on QQQ is a key one) and with individual stocks looking even better, with lots of leadership across many groups.
To be fair, we have seen a couple of breakdowns of late, but they’re still few and far between. As always, we’ll see how it goes—if the near-term factors mentioned above cause a wave of selling that cracks leaders, or if earnings season morphs into a complete dud (so far, it’s been fine), we’ll certainly change our tune. But right here, we remain optimistic—we’ll keep our Market Monitor at a level 8 and see if some fresh leaders (or secondary buy points among current leaders) emerge as earnings are released.
SUGGESTED BUYS
Some AI and networking stocks have exhaled during the past two weeks, possibly presenting good entry points. Lumentum (LITE) stretched as high as 71 before retreating but is still in fine shape above its 50-day line (near 61) and prior breakout (59). You could nibble here with a stop just under 60 or wait for a resumption of the upmove (above 67 or so) with a stop near 61.
SUGGESTED SELLS
Partial Sells
GE Vernova (GEV) looks like a real leader, but it’s now been running for a couple of months and is stretched near round-number resistance at 300. We’re OK letting a few shares go up here (or a few more, if you sold a bit earlier) and giving the rest room to maneuver.
Full Sells
Carrier (CARR) – cracked on earnings.
Freshpet (FRPT) – tripped stop as it cracked the 50-day line.
GE Aerospace (GE) – stopped on earnings report. Stock is trying to hold 50-day line now, so if you still have some and want to give it a little rope, you can … but only three points or so from here.
Klaviyo (KVYO) – very strong, but we’ll book our relatively quick profit after seven weeks up in a row; shares are moving into some resistance near the IPO highs.
RH (RH) – tripped an admittedly tight stop given the new uptrend in interest rates.
SUGGESTED STOPS
Arista Networks (ANET) near 377
Blackstone (BX) near 155
Boot Barn (BOOT) near 149
Carpenter Tech (CRS) near 146
CBRE Group (CBRE) near 123
Clear Secure (YOU) near 32.5
Coherent (COHR) near 86
Eagle Materials (EXP) near 269
Fortinet (FTNT) near 76
JD.com (JD) near 38
Lumentum (LITE) near 59.5
Modine Manufacturing (MOD) near 122
Southern Copper (SCCO) near 109.5
United Airlines (UAL) near 63
United Rentals (URI) near 800
Wheaton Precious Metals (WPM) near 62.5
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