NOTE: Our offices will be closed on Monday for Labor Day, so your next Top Ten issue will be sent to you Tuesday evening, September 5. Have a great long weekend!
==
It’s been a very solid week for the market, with a batch of so-so economic data and falling interest rates (the 10-year Treasury is down about 13 basis points on the week as we write this) bringing in the buyers. As of this morning, all of the indexes we track are up in the 2% to 3.5% range, with the Nasdaq leading the way.
More important to us is that the action is having more of an impact on some of our indicators. First off, the intermediate-term trend may be turning back up, as all of the indexes are regaining their 50-day lines (which, in many cases, are still rising). Second, the number of stocks hitting new lows has dried up nicely. And we continue to like the strong relative performance of the Nasdaq (and equal-weight Nasdaq 100) vs. defensive stocks like consumer staples.
It’s all very encouraging—though we’d approach things slowly for the moment. Why? First, let’s see if the intermediate-term trend actually flips, as often times these things get close and then fall apart. Second, it’s early in terms of most stocks, with relatively few new highs and a lot of growth-y names rallying back into a lot of resistance. And third, let’s not forget this is a pre-holiday week so volume’s been generally light.
Thus, we wouldn’t cannonball back into the pool—but, like we said, we’re encouraged and wouldn’t advise dismissing the improvement in the evidence. Depending on how things go the rest of today and Tuesday, we’ll likely be bumping up our Market Monitor by a notch or two (to a 6 or 7), and think probing a couple of new positions makes sense.
POTENTIAL BUYS
Freshworks (FRSH) gapped above year-long resistance on earnings at the start of August and has since meandered sideways in the 20 to 23 area as the 25-day line (above 21) has caught up and the 50-day line (above 19) is following behind. If you don’t own any, we’re OK with a small buy here, a stop near the 50-day line, and consider adding if FRSH powers ahead and the market follows through on its recent strength.
SUGGESTED SELLS
Partial Sells
None this week
Full Sells
Acadia Pharmaceuticals (ACAD) – tripped stop
SUGGESTED STOPS
Apollo Global (APO) near 80
ATI Inc. (ATI) near 43
Argenx (ARGX) near 480
Boot Barn (BOOT) near 87
BridgeBio (BBIO) near 26
Carrier (CARR) near 54
Chart Industries (GTLS) near 162
Fastly (FSLY) near 19
Old Dominion (ODFL) near 393
Pure Storage (PSTG) near 35
Southern Copper (SCCO) near 77.5
Tempur Sealy (TPX) near 43.5
Tidewater (TDW) near 58.5
TopBuild (BLD) near 272
Zillow (Z) near 49.5
