The big news of the week was the Fed’s decision to cut interest rates by a full half point, and that was certainly part of the reason stocks had another solid week—coming into today, the big-cap indexes were up 1.5% to 2%, while broader indexes put in an even stronger performance.
From a top-down perspective, the evidence continues to improve: Yesterday saw the S&P 500, NYSE Composite and S&P 400 MidCap hit new closing highs, while the S&P 600 SmallCap came close, and even the Nasdaq Composite is above its key moving averages. While volatility remains high, that’s enough to call the intermediate-term trend up.
To be fair, there are still flies in the ointment. The fact that the Nasdaq is lagging most everything else (including the Dow Industrials and, while they’ve taken on a little water this week, defensive sectors) isn’t usually the best situation, and growth measures themselves are still mostly rangebound.
As for individual stocks, they remain in good shape and are probably the best part of the overall evidence out there—most of the names that rebounded well after the August mini-crash (often with the help of earnings) did pull back earlier this month, but they’ve popped back toward or out to new high ground soon after, with further gains this week.
Now, short term, we would say that despite the hoopla of the Fed, we have seen many names show some stalling action, often near key resistance. It’s not a red flag, but after a good couple of weeks and with the good news out (and with a seasonally weak period coming up), we wouldn’t be surprised to see some wobbles in the days ahead.
All in all, we like what we see as the evidence continues to improve, though we still favor stepping into the market (not cannonballing into the pool), holding some cash and aiming for decent risk-reward entries. We’ll likely leave our Market Monitor at a level 7 come Monday.
SUGGESTED BUYS
None this week among our previous recommendations because so many names have shown great strength—but we’ll be monitoring many that showed great power for potential opportunities if they shake out a bit in the next week or two.
SUGGESTED SELLS
Partial Sells
If you haven’t yet, we think ringing the register on a few Zeta Holdings (ZETA) shares makes sense here, while ratcheting up the trailing stop, too.
ADMA Biologics (ADMA) is a fast mover and is showing us a quick double-digit profit as it approaches round-number resistance near 20—if you bought some, sell a few shares and use a stop near the recent low.
Similar story with Zillow (Z), which went wild before and after the Fed meeting. Taking a few shares off the table is advised, with a trailing stop just above our cost.
Full Sells
CBOE Global Markets (CBOE) – looks fine but no progress in about a month even as many stocks (including many Bull Market stocks) spiked.
PayPal (PYPL) – going to take the modest profit into strength.
TG Therapeutics (TGTX) – looks OK but seen selling all strength repeatedly of late and we have no profit after a month.
TransUnion (TRU) – going to take the quick profit into strength.
SUGGESTED STOPS
ADMA Biologics (ADMA) near 16.5
Agnico Eagle (AEM) near 77.5
Barrick Gold (GOLD) near 19
Best Buy (BBY) near 94
Carpenter Tech (CRS) near 135
CBRE Group (CBRE) near 111
Clearwater Analytics (CWAN) near 23
Coupang (CPNG) near 22.5
D.R. Horton (DHI) near 179
Guidewire Software (GWRE) near 159
Halozyme (HALO) near 57
Howmet Aerospace (HWM) near 90.5
Insmed (INSM) near 70
Monday.com (MNDY) near 248
Procept BioRobotics (PRCT) near 72
Rocket Cos. (RKT) near 17.9
Ryan Specialty (RYAN) near 62
ServiceNow (NOW) near 825
Toll Brothers (TOL) near 136
United Therapeutics (UTHR) near 336
Virtu Financial (VIRT) near 29
Zeta Holdings (ZETA) near 24.9
Zillow (Z) near 58.5
Copyright © 2024. All rights reserved. Copying or electronic transmission of this information without permission is a violation of copyright law. For the protection of our subscribers, copyright violations will result in immediate termination of all subscriptions without refund. Disclosures: Cabot Wealth Network exists to serve you, our readers. We derive 100% of our revenue, or close to it, from selling subscriptions to our publications. Neither Cabot Wealth Network nor our employees are compensated in any way by the companies whose stocks we recommend or providers of associated financial services. Employees of Cabot Wealth Network may own some of the stocks recommended by our advisory services. Disclaimer: Sources of information are believed to be reliable but they are not guaranteed to be complete or error-free. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks involved. Buy/Sell Recommendations: are made in regular issues, updates, or alerts by email and on the private subscriber website. Subscribers agree to adhere to all terms and conditions which can be found on CabotWealth.com and are subject to change. Violations will result in termination of all subscriptions without refund in addition to any civil and criminal penalties available under the law.
