The major indexes have been up and down this week, with this morning’s better-than-expected jobs report likely to offset a chunk of Wednesday’s post-Fed gains.
We’ll see how it plays out, but nothing has changed with the evidence, at least from a black-or-white perspective. The intermediate-term trend is still up, which is definitely a good thing, but the long-term trend is down and the broad market is still unhealthy. Plus, of course, most growth-oriented stocks are having trouble letting loose on the upside, though there are some other areas of strength.
Overall, we’ve seen some improvement in the evidence, but nothing really definitive as of yet—sort of a good to see but need to see more situation. (Unlike the Patriots offense last night and all year, where’s there’s no good news. But I digress.)
For instance, the S&P 500 has actually nosed above some longer-term moving averages (improvement), but by our measures, the long-term trend is still down. Similarly, the number of stocks hitting new lows has dried up some (improvement), but not consistently enough to say the sellers have left the building. And more individual stocks are acting properly, too, but again, few are really taking off on the upside.
All of that is a way of saying we’re in something of a middle ground—there are some positives out there, so you don’t want to assume the market is going to tank, but we also haven’t seen enough to conclude the bears are in hibernation. We’ll leave our Market Monitor at a level 5 and continue to think small-ish positions, buying on weakness and selling some into strength makes the most sense.
SUGGESTED BUYS
Both Dexcom (DXCM) and Insulet (PODD) had very strong moves in October and/or early November, and then spent a few weeks pulling back grudgingly on low-ish volume and are beginning to perk up. A few more wiggles are possible, but both appear to be at decent risk/reward areas near here.
We do think many oil producers look ragged, so we don’t want to give the impression that they look pristine. That said, the declines in many of late haven’t cracked key support, and some have started to stabilize—offering potential entry points in certain names. Marathon Oil (MRO) is one of a few examples—if you’re game, you could start a position here and use a stop under the 50-day line (call it 28.5 or so), and even considering buying a bit more on a strong move north of 31.5.
SUGGESTED SELLS
Outright sells:
MedPace (MEDP) – tripped stop
Nucor (NUE) – we had this listed in Monday’s update, so we’re keeping it here as a reminder
Shoals (SHLS) – tripped loss limit after a share offering and CEO news. Another example of a great-looking setup/action vaporizing overnight
SUGGESTED STOPS
Academy Sports (ASO) near 43
Amylyx Pharma (AMLX) near 32.5
Arch Resources (ARCH) near 146
Biogen (BIIB) near 275
Calix Networks (CALX) near 63.5
Chesapeake Energy (CHK) near 96
Frontline (FRO) near 12.3
Marathon Oil (MRO) near 28.5
Matador Resources (MTDR) near 63
Neurocrine Bio (NBIX) near 112.5
Noble Corp. (NE) near 34.5
Onsemi (ON) near 68
Patterson-UTI (PTEN) near 16.3
Regeneron (REGN) near 710
