It’s been a modestly positive week in the market, with a few intraday wobbles but nothing overly stressful. And, encouragingly, growth stocks led the way—the Nasdaq came into today up around 1.5%, while the rest of the major indexes were flat to up a touch and growth-y funds and indexes outperformed broad market ones.
Not much has really changed when looking at the overall market: The overall intermediate-term trend is sideways, the majority of stocks are stuck below their 50-day lines (just 36% of Nasdaq stocks are above their 50-day lines!) and upside follow-through is relatively tough to find—most stocks and sectors that do well for four or five days tend to slough off soon after.
That said, our screens continue to pick up on more good-looking growth stocks out there—yes, potholes are still out there, but more and more names are acting constructively and showing bullish “markers” on their charts, including big-volume rallies (including more than a few on earnings).
If we had our druthers, we’d love to see the entire market—growth, value, all indexes—kick into gear on the upside, which would put aside the incessant crosscurrents and chop that are out there. But the perfect doesn’t have to be the enemy of the good; right now, we advise keying more off individual stocks, extending your line as more breakouts occur.
Of course, we’re not going to advise getting overly aggressive until the choppy conditions fade—many stocks are still flopping around 4% or 5% on a daily basis—but given the encouraging signs out there, we’re leaning toward upping our Market Monitor back to a level 7 next week.
Suggested Buys
Alnylam Pharmaceuticals (ALNY) had a sharp shakeout in late June, but it shaped up quickly, rested under 185 for a couple of weeks and has staged a good-looking breakout with a nice three-day volume cluster (three days in a row of solid upside volume). You could take a swing at it here or (preferably) on dips, with a stop around 174.
Sprout Social (SPT) had a great rebound to new highs in June, a choppy pullback and rest in July, but earnings this week has created a good-looking breakout. We think you can target an entry down a bit (100-103 area) and use a stop in the upper 80s.
Suggested Sells
Outright sells:
Deckers Outdoor (DECK) – Looks good but taking a quick profit
Revolve Group (RVLV) – earnings gap lower, tripped stop
Roku (ROKU) – earnings move tripped stop
If you bought some BioNTech (BNTX) with us a couple of weeks ago, congrats! But we’d consider taking partial profits—sell between one-third and one-half and see how the rest does.
Same goes if you bought Rapid7 (RPD) with us—looks fine, but we’d favor ringing the register on some and holding the rest.
Suggested Stops
American Eagle (AEO) near 32.5
Antero Resources (AR) near 12.7
Alnylam Pharm (ALNY) near 174
Ares Management (ARES) near 63.5
Arista Networks (ANET) near 360
ASML Holding (ASML) near 710
Atlassian (TEAM) near 290
Bath & Body Works (BBWI) near 58. NOTE: This is the “new” L Brands (formerly LB) as the spin-off was completed.
Bentley Systems (BSY) near 58.5
Bill.com (BILL) near 184
BioCryst Pharmaceuticals (BCRX) near 15.8
Horizon Therapeutics (HZNP) near 98
Lightspeed POS (LSPD) near 83
Nutanix (NTNX) near 35
Shopify (SHOP) near 1445
Sprout Social (SPT) near 88
Synaptics (SYNA) near 144
Tempur Sealy (TPX) near 40
Trane Technologies (TT) near 187
Zscaler (ZS) near 220