It’s been a bit of a mixed week, with the big-cap indexes chugging slightly higher coming into today, up 1% or less. But the broad market—which has been lagging—took a couple of lumps, with small- and mid-cap indexes off more than 1%.
That keeps the current situation in place: The trends of the major indexes are still pointed up, and the big picture remains bright—but near-term, the broad market has started to diverge, not just among the indexes (the S&P 600 Smallcap and S&P 400 Midcap are close to their 50-day lines) but also under the surface, with the number of stocks hitting new lows continuing to remain too high for comfort.
In terms of reasons, we’d note that a couple of auto sector bankruptcies (First Brands and Tricolor) are starting to affect credit markets and some areas of the broad market—we wouldn’t read too much into it, but it’s something to keep an eye, as tightening credit can often be a market bugaboo.
That said, besides the still-positive intermediate-term trend, there was some other good news this week: While the ping-pong action among many growth stocks is still mostly out there, we have seen a few names we’ve been watching or have recommended that, after failing near resistance a few times, are beginning to break through. Nothing definitive yet, but after a shakeout Tuesday, many name snapped right back with some moving to new highs, the first time we’ve seen that action in a while.
Overall, we’ll stick with our stance—our Market Monitor remains at a level 7, as the positive evidence outweighs the negative evidence, but we continue to favor looking at things on a stock-by-stock basis given the increasingly split tape, riding strong names while tightening stops on things that have stalled out.
SUGGESTED BUYS
After a big comeback that ended with a nice earnings gap in early August, Arista (ANET) made no net progress for two months while respecting its moving averages—but after battling with resistance near 150, shares have poked out to the upside. We wouldn’t say it’s a major breakout, but we’re OK starting small (or adding small) around here, with a stop in the mid-130s.
Cameco (CCJ) has been struggling to really kick into gear since its breakout attempt in the middle of September. But it’s just shy of resistance near 90, and a move above there would be tempting, with a stop around 80.
SUGGESTED SELLS
Partial Sells
None this week
Full Sells
CH Robinson (CHRW) – not bad but hasn’t moved in nearly a month
Credo Tech (CRDO) – stop got tripped by a bit; if you still own it, it’s fine to trail a stop with a tight stop near 136 or so, but officially we’re out
D.R. Horton (DHI) – housing stuff has completely collapsed, with DHI breaking down badly and tripping our stop on Tuesday
Evercore (EVR) – tripped stop and its 50-day line.
SUGGESTED STOPS
Adding a bunch of stops (and raising others) as the broad market weakness is pulling more things down
ANI Pharmaceuticals (ANIP) near 87.5
Amphenol (APH) near 114.5
Argenx (ARGX) near 720
Baidu (BIDU) near 125
Baker Hughes (BKR) near 46.5
Cameco (CCJ) near 80
Cloudflare (NET) near 207
Coupang (CPNG) near 30.5
GE Vernova (GEV) near 540
Frontline (FRO) near 21.3
Kinross Gold (KGC) near 22
Lam Research (LRCX) near 128 (stop near breakeven after partial profits last week)
Life 360 (LIF) near 86
Lyft (LYFT) near 18.6
Madrigal Pharm (MDGL) near 400
MongoDB (MDB) near 287
Nebius (NBIS) near 105
Scorpio Tankers (STNG) near 52
Sea Ltd (SE) near 179
Seagate (STX) near 210
Xometry (XMTR) near 47
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