Here’s our upcoming schedule:
Next Monday, November 21: Cabot Top Ten Trader issue
Next Friday, November 25: NO Movers & Shakers update (Thanksgiving!)
Monday, November 28: NO Top Ten issue
Friday, December 2: Movers & Shakers update
Don’t hesitate to email me (mike@cabotwealth.com) in between issues and updates with questions on stocks—I should be (mostly) in touch.
As for the market, the big event for us this week was that the intermediate-term trend (by our measures) turned up, joining the still-positive longer-term trend. Both major trends are now pointed up—a sign to take a more constructive view of the market.
We’re especially impressed with the action of the broad market. Small- and mid-cap indexes have exploded higher during the past two weeks, lifting to new all-time highs. Moreover, these indexes have come to life after nearly two years of no progress. That’s bullish.
The broad market is also super-strong—on Monday, in fact, we saw the most stocks hitting new 52-week highs on the Nasdaq on any one day since 2003! Again, coming after a two-month correction (which was part of a two-year consolidation), that’s positive action.
Not everything is pristine, though. Many big-cap technology stocks (nearly all of which broke down on earnings before the election) continue to struggle, and it’s hard to ignore the fact that the two most well followed indexes—the S&P 500 and Nasdaq—have yet to reach new high ground.
All told, though, there’s no question the tenor of the market is positive, so we’re going to bump our Market Monitor up to level 7 (out of 10); in other words, it’s a good idea to put some more money to work as opportunities arise. Going forward, we want to be “pulled” into a fully invested stance by further strength in the market (especially new highs for the S&P and Nasdaq) and individual stocks.
BUY IDEAS
Autodesk (ADSK 77) has been acting great since a shakeout earlier this month below its 50-day line, with a huge-volume up day on Wednesday. This cloud story is similar to Adobe’s, and it appears institutions are finally getting on board. We’re OK with buying some here with a stop near 71.
Cirrus Logic (CRUS 57) is one of many chip stocks that are set up well. The stock had a shakeout on Tuesday, but found support at 52 and is now testing the top of its two-month base. You could nibble here (with a stop near 51.5) or wait for a push above 58 on big volume (in that case, use a stop near 53).
FMC Technology (FTI 34) remains very strong, continuing the advance that kicked off in late September. It’s currently pulling back a bit—a dip toward 33.5 would be very tempting, with a stop near 31.
Las Vegas Sands (LVS 61) is attempting to break out from its six-week consolidation after its own post-election shakeout on Monday. You could buy a small position here with a stop near 56, and aim to add shares if the stock shows you a two- to three-point profit.
Quanta Services (PWR 32) has shown great power since the election, busting loose from a consolidation on big volume. Shares have pulled back a point; we’re OK with buying some here or (ideally) on dips of another point, with a loss limit near 29.
TD Ameritrade (AMTD 40) is also powerful, working on its 10th straight up day today. Dips toward 38 would be tempting, with a stop near 35.
SELL IDEAS
After a rash of selling during the past three to four weeks, we have no new sells today, though we have bumped up a bunch of our stops (as the stocks have advanced) and added a couple of new ones, too.
SUGGESTED STOPS
Aerie Pharmaceuticals (AERI 42) near 34.5
Applied Materials (AMAT 31) near 28.5
Arch Coal (ARCH 73) near 69
Arista Networks (ANET 89) near 81.5
Autodesk (ADSK 77) near 71
Cirrus Logic (CRUS 57) near 51.5
Finisar (FNSR 32) near 28.5
ICU Medical (ICUI 145) near 136
Las Vegas Sands (LVS 61) near 56
Micron Technology (MU 19) near 16.5
Nintendo (NTDOY 30) near 27.5
Nvidia (NVDA 93) near 76
Patterson-UTI Energy (PTEN 24) near 22
PayPal (PYPL 40) 38
PRA Health Sciences (PRAH 55) near 53
Quanta Services (PWR 32) near 29
RPC Inc. (RES 18) near 16.5
TD Ameritrade (AMTD 40) near 35
Tesaro (TSRO 130) near 120
U.S. Silica (SLCA 45) near 42.5
Western Digital (WDC 60) near 53
Williams Companies (WMB 30) near 28