Quick note before we get into it today: Join me and my fellow Cabot analysts Tom Hutchinson, Tyler Laundon and Carl Delfeld next Tuesday, March 26 at noon ET for a FREE special event in which we will discuss the state of the market, how to maximize profits in this bullish environment, reveal our top stocks to buy now, and answer any questions you may have. To join us, simply click here.
Housekeeping: As a heads up, next week’s Movers & Shakers will be sent out a day early—next Thursday, March 28—as our offices will be closed for Good Friday.
It’s been an encouraging week in the market—both the S&P 500 and Nasdaq are up in the 2% range, while broader indexes and growth-heavy measures are up more.
For much of 2022 and 2023, buying pressures weren’t able to persist—yes, there were rallies, but they usually went just three to five weeks before the bulls pulled in their horns, leading to renewed downside.
So far in this rally, we’re seeing the opposite, with the sellers doing some damage here and there—most recently via a lot of churning action since early February—but they’ve been unable to take control, leading to this week’s post-Fed upside, which includes many fresh and some extended leaders hitting higher highs.
Now, to be clear, many of the factors we’ve mentioned of late still hold true, as there are many stocks that have had big moves in time and price and haven’t had much of a pullback in months, all while near-term sentiment measures are elevated. Thus, we don’t see this week’s action as some sort of major buy signal; it’s unlikely that a five-week rest is going to lead to a return to the November/December straight-up environment.
That said, up is good, and the fact that we never saw any truly abnormal action during the recent churning (it was choppy and sloppy but few leaders truly broke), combined with the still-bullish top-down evidence (trends of the major indexes), is a good sign.
Today, we’ll leave our Market Monitor at a level 7, but let’s see how things look Monday afternoon—if this recent strength holds or continues, we could bump up our exposure. Either way, though, you should remain mostly bullish, though with a focus on fresher leadership for new buys.
POTENTIAL BUYS
NexTracker (NXT) has been sitting around for a few weeks after its big breakout at the start of February—unable to get going, but holding firm despite lots of sour action from the solar group. One idea would be to nibble here if you’re not in, use a tight stop near the 50-day line (54) in case the group drags the stock down—but also aim to buy more on any decisive breakout above 62 (the high of the recent range). Basically, it’s a good setup, but you have to be willing to cut bait quickly if the sellers show up.
SUGGESTED SELLS
Partial Sells
They’re not big profits, but many stocks that have been written up in the past couple of weeks have popped 5% to 10% right quick, so throwing a few shares overboard is fine by us—things like Robinhood (HOOD), Quanta (PWR), Diamondback (FANG), Light & Wonder (LNW) and the like. Again, this is just to book a little profit while holding most of the position for what ideally turns into a larger move.
Full Sells
Netflix (NFLX) – looks fine, just booking a modest profit as it’s lost a bit of strength
Shift4 (FOUR) – whacked on news this week, and overall, couldn’t get going.
SUGGESTED STOPS
AeroVironment (AVAV) near 140
American Express (AXP) near 206
Ascendis Pharmaceuticals (ASND) near 140
ASML Inc. (ASML) near 917
Axon Enterprise (AXON) near 280
Block (SQ) near 76
Cava Group (CAVA) near 52
Confluent (CFLT) near 29.5
Eli Lilly (LLY) near 719
Freshpet (FRPT) near 99
Interactive Brokers (IBKR) near 102
Natera (NTRA) near 77
Nextracker (NXT) near 54
Nvidia (NVDA) near 735
Okta (OKTA) near 100
Palantir (PLTR) near 21.9
Pure Storage (PSTG) near 48
Samsara (IOT) near 35
Taiwan Semi (TSM) near 126
Toll Brothers (TOL) near 109
United Rentals (URI) near 639
XPO Inc (XPO) near 111
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