WHAT TO DO NOW: Selling remains intense in growth stocks, with no ability to bounce even after this week’s wipeout. In last night’s update, we had three stocks on tight leashes, and today, we’re going to sell our remaining stake in Ambarella (AMBA), which has hit a new correction low today and looks to have formed a meaningful top. That will lift our cash position to around 55%. Details below.
The market started out lower this morning after a worse-than-expected jobs report. As of 11:30 am, the Dow is down just 14 points, but the Nasdaq is off 130 points and growth-oriented indexes are down another 1% to 2%.
Obviously, our thoughts haven’t changed much from last night’s update, but in that report we said we have three stocks on very tight leashes: Our remaining shares of Ambarella (AMBA), our half-sized stake in Datadog (DDOG) and our position in Floor & Décor (FND). Given that we’re about half in cash, we’re not anxious to do across-the-board selling at this point, but we also can’t just hold and hope.
So far today, a minor initial run has led to another steep decline for the Nasdaq and most growth titles. Ambarella (AMBA) looks like our weakest remaining title, hitting new correction lows today, and as we wrote in last night’s update, the multiple rejections at resistance make the past few weeks look like a top. Thus, we’ll sell our remaining half-sized stake today. SELL
As for our other names, we’ll see how things close today—if necessary, we’ll have another bulletin Monday morning, but right now we’ll peel off a bit more exposure, lifting our cash position toward 55%, and see what comes.
Don’t hesitate to email me firstname.lastname@example.org with any questions.