Make it four in a row when it comes to constructive weeks for the market, as the major indexes and key growth indexes and funds are all again in the black, generally up in the 1% to 2% range.
The past month hasn’t been any sort of blastoff—in fact, the buying pressures have been sporadic and generally news-driven; selling pressures, on the other hand, have been very light—but the market has put on a steady advance that, at this point, has flipped the intermediate-term trend back to positive, which is obviously a good thing.
Now, for individual stocks, the situation is a bit trickier—most names have improved a bunch, but many are moving into resistance areas and “risk-on” areas are doing just OK, often underperforming some safer areas (like utilities and consumer staples). It’s not a bad or bearish thing, but if the evidence for the overall market is an A-, the evidence for potential leaders is more like a B—i.e., good, but not amazing, at least not yet.
All in all, we are extending our line given the continued upmove—we’ll bump up our Market Monitor to a level 8—as the odds favor higher prices ahead. But when it comes to new buying, we think it’s best to be relatively discerning, looking for names that have shown some real buying volume of late while also aiming for solid risk/reward entries.
POTENTIAL BUYS
At the moment, we’d be targeting strong names that have shown some power—but aiming to enter on dips.
ATI Inc. (ATI) is a good example, as it’s part of the strong aerospace group and popped on earnings at the end of April and has meandered since. A dip into the upper 50s with a stop near 53-54 seems like a good bet.
Kirby (KEX) is a very similar chart, with a gap up in late April and a bit of upward progress since then. A dip to 112 with a stop near 102 would be tempting.
SUGGESTED SELLS
Partial Sells
None this week
Full Sells
Martin Marietta (MLM) – yesterday’s big-volume decline makes the past couple of months look very toppy
Warrior Met Coal (HCC) – tripped stop as breakout attempt has run into trouble.
SUGGESTED STOPS
American Express (AXP) near 226
Boot Barn (BOOT) near 101
Cava Group (CAVA) near 59
CNX Resources (CNX) near 23.2
Chord Energy (CHRD) near 175
Core & Main (CNM) near 55
Diamondback Energy (FANG) near 193
Alphabet (GOOGL) near 162
Howmet Aerospace (HWM) near 71.5
KKR & Co (KKR) near 96
Micron Technology (MU) near 114
Natera (NTRA) near 90
Southern Copper (SCCO) near 107
Sweetgreen (SG) near 25
TechnipFMC (FTI) near 24.9
Vertiv Holdings (VRT) near 88
Viking Therapeutics (VKTX) near 64
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