It’s been a very news-filled week, with a dockworkers strike (and short-term settlement) along with the Middle East attacks (and fears of an upcoming reprisal) and the usual spate of economic reports—but, interestingly, there hasn’t been that much movement. Taking into account pre-market action (before the jobs report), most big-cap indexes are flat-ish on the week, though smaller-cap names are down more than 1%.
Not to sound like a broken record, but we remain on the same path we’ve been on for the past few weeks: Big picture, there are numerous pieces of evidence—from trend to sentiment to tons of studies regarding recent market action—that suggest the next major move is up.
Moreover, there are many individual stocks that are battling for pole position for that advance—either setting up in multi-month consolidations, or names that have already broken out on the upside.
That said, while positive, the current action isn’t powerful, as there remain a bunch of stocks, sectors and indexes battling with resistance … often multi-month resistance that’s been in place since the spring.
Ideally, the market is in the midst of a late-September/October dip that will raise the fear level again (near-term sentiment measures are a bit complacent) by bringing increased volatility and bad headline news, while the leaders hold relatively firm—and then we launch a powerful end-of-year run after that, with big investors finally letting loose.
Of course, the market doesn’t care what we want; it’s going to do what it’s going to do. Thus, we remain in our current stance—selectively picking up shares of fresh leadership at decent entry points, while holding some cash, too—but are staying flexible should the market change character, up or down. We’ll again leave our Market Monitor at a level 7.
SUGGESTED BUYS
Ryan Specialty (RYAN) held its 50-day line, popped higher last week, and after one more wobble, has moved out to new highs on a couple of days of nice buying this week. We’re OK with a small buy here and a reasonably tight stop near 65
Samsara (IOT) has been known for its breakout-then-fail pattern during the past year, so we’ll see—but after three big-volume buying weeks, the stock has pulled in the past two on much lower trade and is testing its 25-day line. If you don’t own any, a small buy on strength—above 47 or so—with a stop near 42.5 seems like a solid risk-reward.
SUGGESTED SELLS
Partial Sells
None this week
Full Sells
Best Buy (BBY) – rejected at prior resistance and no progress for a month
Insmed (INSM) – tight, but can’t get going and living just under its 50-day line
Rocket Cos. (RKT) – tripped stop as rate-sensitive names have struggled with higher Treasury rates
ServiceNow (NOW) – tripped us out via an admittedly tight stop. We’re not a huge fan of the pullback near-term.
United Therapeutics (UTHR) – we’ll take our modest profit here.
SUGGESTED STOPS
ADMA Biologics (ADMA) near 16.9
Agnico Eagle (AEM) near 78
Carpenter Tech (CRS) near 140
CBRE Group (CBRE) near 114.5
Clear Secure (YOU) near 29
Coherent (COHR) near 79.5
Coupang (CPNG) near 23
D.R. Horton (DHI) near 181
Freshpet (FRPT) near 129
GE Aerospace (GE) near 174
Guidewire Software (GWRE) near 164
Howmet Aerospace (HWM) near 92
Lennar (LEN) near 176
Procept BioRobotics (PRCT) near 73
Ryan Specialty (RYAN) near 65
Toll Brothers (TOL) near 142
Uber (UBER) near 71.5
Wheaton Precious Metals (WPM) near 58.5
Zeta Holdings (ZETA) near 25.5
Zillow (Z) near 59.5
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