The holiday-shortened week has seen more bad than good, especially early when many growth stocks hit potholes—including a few breakdowns. But while most major indexes are lower, the damage has been mostly reasonable and today’s bounce helps the cause.
As we wrote on Monday, we do think further weakness is possible near-term, especially in names that have had good runs. The good news is that, thanks to a good number of stocks finally breaking free of multi-month ranges and staging some solid upside follow through, controlled pullbacks should offer up some high-odds entry points as certain titles dip toward support.
Of course, “controlled” is the key word there—this week, we have seen a few eyebrow-raising cracks, whether it’s liquid names dipping below intermediate- or longer-term support or other names being rejected after fresh breakout attempts. Don’t get us wrong, there is still much more good than bad out there, but our points are that (a) there’s still air pockets showing up here and there, and (b) when looking to buy dips, modest retreats are usually best, telling you big investors are hesitant to let go of shares.
All in all, then, there are some things to watch as we roll through September, which is historically the toughest month of the year for stocks. As always, if the evidence really worsens, we’ll honor our stops, pare back and hold more cash.
But right now, the big picture is still mostly the same—it’s a bull market, but it’s also a tricky market, so focus on stocks at decent entry points that have recently shown good-volume buying, while raising stops and taking partial profits on the way up.
Suggested Buys
Goldman Sachs (GS) broke out nicely early last month and has had some ups and downs after some initial upside, tagging its 25-day line this week. It’s not the fastest mover, but we think buying here with a stop in the 380 area makes for a solid risk/reward situation.
Nucor (NUE) has gradually lost altitude since its huge-volume surge about a month ago. Even so, it’s above its 50-day line (near 107.5) and its prior high (near 110) and is just starting to bounce. Hold on if you own some, and if not, you can grab some here.
Suggested Sells
Alnylam Pharm (ALNY) – tripped stop
Colfax (CFX) – Inability to get going or bounce
Five Below (FIVE) – Abnormal break
Trane Technologies (TT) – tripped stop
Suggested Stops
Albemarle (ALB) near 215
Align Technology (ALGN) near 670
ArcelorMittal (MT) near 32
ASML Holding (ASML) near 775
Atlassian (TEAM) near 325
Axon Enterprise (AXON) near 175
Bill.com (BILL) near 245
Capri Holdings (CPRI) near 54.5
Elastic (ESTC) near 151
HCA Healthcare (HCA) near 243
Horizon Therapeutics (HZNP) near 102
HubSpot (HUBS) near 627
LendingClub (LC) near 25.5
Lightspeed POS (LSPD) near 100
Livent Corp. (LVNT) near 22.5
Maravai LifeSciences (MRVI) near 49
Marvell Technology (MRVL) near 58.5
ON Semiconductor (ON) near 42
Rapid7 (RPD) near 112
Sonos (SONO) near 36
Sprout Social (SPT) near 103
Synaptics (SYNA) near 169
Tempur Sealy (TPX) near 42.5
ZoomInfo (ZI) near 58
Zscaler (ZS) near 249