First off, we hope everyone had a terrific July 4 and are enjoying some R&R now. This week’s Movers & Shakers will be a bit abbreviated as we work on our marinades and suntans. Have a great weekend!
Despite the holiday-shortened, low-volume week, we’ve seen a good move this week. As we write this, the S&P 500 is up about 1% on the week, with the Nasdaq up 1.6%.
Overall, the major indexes have done a decent job in recent days holding up and bouncing a bit (often at key support, like the 50-day line); the intermediate-term trend is still tilted up, and of course, the long-term trend is bullish as well.
That said, we think the key will be what happens from here—if the market shows some upside power and some individual leading stocks run to new highs (we’ve seen a little bit of the latter during the past two sessions), it would go a long way toward telling us the recent slide was more of a short-term event.
If, however, we see renewed selling pressure and a dip below some key levels on the major indexes, which would flip the intermediate-term trend and tell us to pare back further. If you’re looking for levels to watch, 7,450 on the Nasdaq, 2,690 on the S&P 500 and 1,935 on the S&P 400 MidCap are important.
Right now, not much has changed. There’s more positive evidence than negative evidence, so we’re leaning bullish—but the near-term outlook remains uncertain, so it’s probably best to see how things play out as big investors return from the beach next week.
One last point: We know many are focused on the trade shenanigans that are going on with the U.S., China, Europe and others. As always, though, when it comes to the market, just stick with the evidence—maybe the trade war will lead to a huge selloff, maybe stocks continue to chop up and down based on the news of the day, or maybe the market has already priced in any potential bad news and is ready to get going on the upside!
Our point isn’t to predict what comes next, but to be open to anything. Today, there remain some yellow flags, but most of the evidence is still bullish, so that’s how we advise you to position your portfolio.
BUY IDEAS
Carvana (CVNA 46) certainly looks like a mid-cap leader, as shares have already burst to new highs after its short, sharp pullback two weeks ago. You could nibble here, though ideally the stock (which is very volatile) pulls back a couple of points. A loose stop around 39 (near the 25-day line) makes sense.
Inogen (INGN 195) is thinner and has had a good-sized run in recent months, but remains very strong—after popping to the low 190s, it moved straight sideways during the past month, found support at its 50-day line and has popped to new highs. You could start a position here if you don’t own any, with a stop near 177.
NovoCure (NVCR 33) has a very similar chart to INGN—a pop into early June, a move sideways, support near the 50-day line and now a lift to new high ground. You can nibble here with a stop just below 30.
Palo Alto Networks (PANW 210) didn’t take a huge hit during the market’s hiccup and never broke its 50-day line. That said, net-net, the stock hadn’t done anything for the prior eight weeks. We’re looking for a resumption of the advance—you could buy a little here or just wait for a push above 215, using a stop around 200.
Turtle Beach (HEAR 22) has set up a reasonable base on top of its prior base, with the 25-day line so far holding support. A move above 23 would be enticing, with a loose stop around 18.
SELL IDEAS
We have just one sell today: Supernus Pharmaceuticals (SUPN 52), which went from on the verge of a breakout to tripping our stop within a few days. If you have a profit, you can give it a little rope, but as always, we’ll stick to our system. SUPN will be a sell in Monday’s issue.
SUGGESTED STOPS
Abiomed (ABMD 408) near 381
Cheniere Energy (LNG 66) near 62.5
Chipotle Mexican Grill (CMG 450) near 430
Coupa Software (COUP 64) near 55.5
Dexcom (DXCM 99) near 89
Exact Sciences (EXAS 62) near 58
Fortinet (FTNT 65) near 60
GDS Holdings (GDS 41) near 35.5
G-III Apparel (GIII 44) near 42
Green Dot (GDOT 76) near 70
HubSpot (HUBS 130) near 120
Kohl’s (KSS 72) near 68
Loxo Oncology (LOXO 190) near 160
Macy’s (M 37) near 35
MongoDB (MDB 51) near 46.5
Netflix (NFLX 405) near 358
Novocure (NVCR 33) near 29.5
Okta (OKTA 52) near 46.5
Palo Alto Networks (PANW 210) near 198
PayPal (PYPL 85) near 77.5
RH (RH 137) near 130
Serepta Therapeutics (SRPT 138) near 115
Shopify (SHOP 155) near 142
Shutterfly (SFLY 90) near 85
Teladoc (TDOC 63) near 52
Twilio (TWLO 57) near 51
Urban Outfitters (URBN 46) near 43
Wix.com (WIX 105) near 93
WPX Energy (WPX 19) near 17.3
ZTO Express (ZTO 20) near 18.7