Housekeeping: I’m heading out on a family trip ahead of this weekend, which means a couple of things—today’s update is being sent out a day early, and next week’s update will likely be short and to the point (albeit with updated stops, etc.). This coming week’s issue of Top Ten, however, will be published as usual Monday after the close, and I’ll still be online here and there if you have any questions along the way.
==
On the whole it’s been a mixed week thus far—the resilient big-cap indexes are down 1% or less in general, though some of the broader indexes are up 1% or more.
All in all, though, nothing has happened (in either direction) to change our opinion that we’re still in a washing machine-type environment—there’s still plenty of mixed action, with some indexes looking good (but not really in strong uptrends) and some looking iffy; many stocks are holding support but most are still getting tossed around, and there’s lots of rotation and selling on strength (we’re even seeing that this week, with “weak” indexes up and “strong” indexes down), which is a sign big investors aren’t playing heavily.
All of that is more descriptive than predictive, meaning it could change at any time; we still think a very strong week or two would do wonders for the market, especially as so many investors are leaning bearish or cautious and many potential leaders are holding onto key support levels. That said, until the on-again, off-again action changes, it’s best to let others fight it out on a day-to-day basis; we think it’ll be better for your results (and less stressful) to hold a good chunk of cash while playing lightly in some resilient names.
Long story short, it’s key to be flexible and to keep your eyes open—a decisive turn up or down could come at any time. But until it does, we continue to think our current “halfway” stance makes sense. We’ll leave our Market Monitor at a level 5 today.
BUY IDEAS
Duolingo (DUOL) is finally starting to pull back … and we think it could go further given the massive post-earnings run the stock enjoyed. But barring a total market collapse, odds are the first retreat will be buyable—dips below 130 would be tempting (shares move about five points per day so it’s not that far away) with a stop in the 115 area (just under the 50-day line).
SUGGESTED SELLS
Partial Sells
It’s not a huge profit, but if you bought Fortinet (FTNT) with us, we would consider shaving off some shares, booking a modest (10% to 15%) profit and holding the rest with a stop near your cost. Looks fine, but the sector’s gotten a bit wobbly of late.
Same deal with Wheaton Precious Metals (WPM)—looks fine, but the stock is extended and given the rotational nature of the market right now, you can consider selling a few shares for a small profit and holding the rest.
Full Sells
Cirrus Logic (CRUS) – cracked after reports it would be used less in certain iPhones
Globalfoundries (GFS) – chips have gone from great to iffy and GFS’ setup has floundered
Transdigm (TDG) – great long-term story, and might be OK, but this is a super-low-volume bounce after a big-volume crack in March. We’ll get out with a minor gain.
SUGGESTED STOPS
We don’t have many outright sells—but we’re adding and tightening more stops should the sellers really make headway.
Academy Sports (ASO) near 56
Advanced Micro Devices (AMD) near 87
Axcelis Technologies (ACLS) near 117
Baidu (BIDU) near 130
DraftKings (DKNG) near 17.5
First Solar (FSLR) near 194
Five Below (FIVE) near 192
Fortinet (FTNT) near 61
HubSpot (HUBS) near 380
Jabil (JBL) near 80
KB Home (KBH) near 36.5
Lennar (LEN) near 100
Okta (OKTA) near 73.5
Palo Alto Networks (PANW) near 181
