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Cabot Top Ten Trader Movers & Shakers Weekly Update

The market may have turned an important corner this week--stocks not only rallied, but all of the major indexes we track spiked back above their 50-day lines, which was one of the signs we were looking for to tell us the month-long correction was ending.

The market may have turned an important corner this week--stocks not only rallied, but all of the major indexes we track spiked back above their 50-day lines, which was one of the signs we were looking for to tell us the month-long correction was ending.

The move has flipped the intermediate-term trend, which had turned down last week, back to positive, producing what we call a “whipsaw buy signal,” which tends to be fruitful. Our measures of the longer-term trend and the broad market are also positive, so the evidence as a whole has quickly shifted back to bullish.

Of course, a few good days doesn’t make everything sunny. The major indexes still have lots of overhead resistance to chew through and we still would like to see more “risk on” stocks hit new highs--this morning’s rally isn’t helping most stocks that are perched near new high ground, for instance. Fundamentally, there remain many uncertainties, including the Fed’s course. (Janet Yellen is speaking today around 1 pm eastern time, which could move the market before the holiday weekend.)

Thus, overall, we’re not fully invested, but after a quick trip to the land of caution, we are generally bullish once again.

From here, the plan is simple--should the market get rejected at resistance, the trend will turn mostly sideways, and we’ll take things on a stock-by-stock basis. But should this week’s push higher continue, and more stocks lift off, we think the market can do surprisingly well on the upside. For now, we’re likely to shift our Market Monitor back into bullish territory on Tuesday.

Buy Ideas

Activision Blizzard (ATVI 39) looks poised to join the ranks of liquid leaders, as it’s arguably the top dog in the game sector. We’d love to see a decisive push above 40, but we’re OK with a small position here if you don’t own any, with a stop near 36.

Acuity Brands (AYI 256) has formed a good-looking base-on-base formation--the stock gapped to new highs in early April, but was then capped by the market’s pullback. Now it looks ready to move--you could nibble here with a stop at 241, and look to add on a decisive breakout above 261.

Boston Scientific (BSX 23) broke out of a long base in April, gapped up on earnings, and has shown nearly perfect price-volume action (big volume up days, low volume down days) ever since. Yes, it’s a bit extended, and it’s not the fastest grower (earnings estimates +15% for 2016), but it looks poised to continue its advance. You can buy some here or on dips, with a stop near 21.

Global Payments (GPN 77) has etched a solid-looking six-week base, which sits on top of its prior, larger five-month consolidation. You could start a position here with a stop near 70, or just wait for a decisive upmove above 78.

HD Supply (HDS 35) is set up well ahead of earnings, which are due out June 7. The stock has basically consolidated since late March, with a recent dip to the 50-day line finding support. We’re OK with a small buy here, but what we’re really looking for is a big-volume push above 36 or so, preferably on earnings.

Monster Beverage (MNST 151) has been trading very tightly during the past three weeks, and this comes on the heels of its big earnings gap, and some follow-on buying as the company embarks on a $2 billion share repurchase plan. MNST could consolidate a bit longer, but we’re OK with a nibble in this area, and then adding shares on any decisive move above 154. On the downside, a stop around 140 makes sense.

Weibo (WB 25) broke out in early April, soared from 19 to nearly 25 in just three weeks, then began to consolidate (including a shakeout earlier this month) with the market. Today, it’s lifting to new highs on heavy volume. You can buy here, but realize that WB is very volatile--we advise keeping new positions small with a loose stop near 21.5.

Sell Ideas

For the first time in a while, we have no sells this week--most of our laggards were stopped out or otherwise tossed aside during the past month.

Lastly, here’s the updated list of stops:

Acuity Brands (AYI 256) near 241
Agnico Eagle Mines (AEM 44) near 41
Amedisys (AMED 51) near 48.5
AMN Healthcare (AHS 36) near 34
Banc of California (BANC 20) near 18.5
Barrick Gold (ABX 17) near 16
Broadcom (AVGO 153) near 143
Credicorp (BAP 144) near 134
Crescent Point Energy (CPG 17) near 15
Cynosure (CYNO 48) near 45
CyrusOne (CONE 50) near 45
Diamondback Energy (FANG 91) near 82.5
Facebook (FB 120) near 110
Home Depot (HD 134) near 130
Huntsman (HUN 15) near 13.5
MasTec (MTZ 23) near 21
National Storage (NSA 21) near 19.5
Newmont Mining (NEM 32) near 30.5
Nvidia (NVDA 46) near 38.5
Reliance Steel (RS 73) near 70
Sabre (SABR 28) near 27
Silver Wheaton (SLW 18) near 17.5
Steel Dynamics (STLD 24) near 23
TAL Education (XRS 57) near 52
Texas Roadhouse (TXRH 45) near 42.5
Weibo (WB 25) near 21.5
Wynn Resorts (WYNN 96) near 88.5

As always, don’t hesitate to email me ( with any questions or comments on these or other Top Ten stocks.