To say it’s been an interesting, volatile week would be an understatement, with just about everything nosediving early Monday, finding some support Tuesday, suffering a big reversal Wednesday before Thursday’s romp that saw a ton of individual names rally big.
Overall, the show of support is certainly a positive—if the market had been unable to bounce at all off “oversold” conditions, that would have likely told you things were coming loose somewhere in the system. It’s also a good thing that, for many indexes (especially growth-oriented ones), that show of support came near their long-term 200-day lines, which is a logical place for big investors to step in.
However, while up is always good, the bounce hasn’t really changed the intermediate-term outlook: Most indexes are still below key moving averages, and after a quick, fierce decline following a prolonged advance (and divergence), the odds favor some repair work (read: wild ups and downs) is likely going to be needed. To be fair, some broader indexes are more neutral than negative in the intermediate-term (basically back to their trading ranges from recent months), but there aren’t many indexes or sectors that are still in true uptrends.
Among individual stocks, there are still a lot of carcasses on the side of the road, but outside of tech many names are attempting to make the swift decline seen late last week/early this week look more like a shakeout. We’re also seeing a fair number (nothing overwhelming) of names acting well overall, though again, most of the popular AI/tech/chip names are still buried.
Overall, we’re leaving our Market Monitor at a level 4 here as we see how this bounce plays out – if we see some breakouts and upside power, we could nudge that up a spot or two, but we want to see a “real” uptrend before doing a ton of new buying. Overall, we still think it’s time to remain cautious, keep new buys on the small side, and, if you’re “stuck” with some broken names, consider lightening up as they bounce.
SUGGESTED BUYS
Software stocks are a somewhat mixed bag, but there are more that are perking up. ServiceNow (NOW) is one of the high-quality names in the space, and it’s done yeoman’s work holding relatively near its highs despite the carnage. A nibble here with a stop in the 750 area seems like a decent risk-reward, and a move above 850 (with a heathier market) would be very bullish.
We wouldn’t chase it here, but we’re flagging Argenx (ARGX), which is up 10 of the past 12 sessions, most of them on big volume—and it’s hitting higher highs today, which is rare. The next dip/shakeout (toward 500) could be buyable if you don’t already own a position.
Spotify (SPOT) got tossed around with the market, but this is another name where the resilience is notable, as shares are testing new closing highs. A nibble here with a stop near 310 (under the 50-day line) could work, with the idea of adding more if the stock takes off in a stronger environment.
SUGGESTED SELLS
Partial Sells
None this week
Full Sells
Blackstone (BX) – tripped stop
Ollie’s Bargain Outlet (OLLI) – hitting lower lows this week and tripped stop.
SUGGESTED STOPS
Agnico Eagle (AEM) near 71
Burlington Stores (BURL) near 237
Carpenter Tech (CRS) near 120
Golar LNG (GLNG) near 31
Guardant Health (GH) near 29
Guidewire Software (GWRE) near 136
Howmet Aerospace (HWM) near 85
Intuitive Surgical (ISRG) near 425
KKR (KKR) near 107
Mohawk Industries (MHK) near 140
Neurocrine Bio (NBIX) near 139.5
TechnipFMC (FTI) near 25
United Rentals (URI) near 655
Zeta Holdings (ZETA) near 20.5
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