All in all, it’s been yet another solid week for the major indexes—the S&P 500 and Nasdaq are working on their fourth week up in a row, and we’re even seeing small- and mid-cap indexes test key longer-term moving averages (40-week) for the first time since March.
Other positives include a continued drying up in the number of new lows we’ve seen (three sub-40 readings on the NYSE in the first four days of this week), an upturn in our Aggression Index (Nasdaq vs. XLP) and we’re intrigued by what we’re seeing in some breadth statistics—79% of NYSE stocks and 86% of S&P 500 stocks have lifted north of their 50-day lines coming into today, and if those figures rise to north of 90%, it would probably tell you the bear is definitively over. Said another way, this week was another step in the right direction.
On the flip side, the usual bugaboos still apply, with the longer-term trend being down and few stocks hitting new highs. Moreover, this week did see sellers step up a bit—we did see a little up-down-up-down action even after “good” inflation numbers, with two reversal days on rising volume (often a sign of distribution) and with bonds actually selling off some (rates went up). We wouldn’t go overboard with that yet—in fact, we’re happy the selling hasn’t shown any follow-through, and as we wrote on Monday, a pullback would be normal—but it’s something to watch.
All in all, the story remains the same: The action continues to improve, with more stocks acting well and the indexes refusing to budge much. We could bump our Market Monitor up a notch, but overall, we think slowly extending your line remains the way to go.
SUGGESTED BUYS:
Argenx (ARGX) hasn’t truly joined the biotech upmove yet, but it looks ready, having etched a very tight six-week zone just south of all-time highs, part of an 18-month structure. You could nibble here with a tight stop in the 350 area, and/or wait on a breakout above 385-390.
Lattice Semi (LSCC) has been resting in recent days as it challenges resistance in the mid-60s—we’re OK nibbling here with a stop near 56, and/or buying (or adding if you already own some) on a breakout above 66 or so.
SUGGESTED SELLS:
Partial Profits:
Consol Energy (CEIX) – Ring the register on some shares after the recent run in coal and other commodity stocks.
NexStar Media (NXST) – Nice run, bang some out if you haven’t already, raise stop on the rest to 186.
Day One Pharma (DAWN) – Nice quick profit, take some, ride the rest with a stop north of breakeven.
Outright Sells:
Axsome Therapeutics (AXSM) – Could revisit, but taking a quick-ish profit here as the stock is battling with resistance after earnings.
Zoom Video (ZM) – Not really doing much compared to other off-the-bottom names.
SUGGESTED STOPS:
Agilon Health (AGL) near 24
Alliance Res. Partners (ARLP) near 20.5
Argenx (ARGX) near 352
BioMarin Pharm. (BMRN) near 88
Consol Energy (CEIX) near 58
Crispr (CRSP) near 72
CrowdStrike (CRWD) near 177
Enphase Energy (ENPH) near 224
Intra-Cellular Therapies (ITCI) near 54
Lantheus (LNTH) near 70
Nexstar Media (NXST) near 186
Neurocrine Bio. (NBIX) near 96.5
Ollie’s Bargain Outlet (OLLI) near 59
Qualcomm (QCOM) near 141
Scorpio Tankers (STNG) near 34.5
Vertex Pharm (VRTX) near 278