Reminder: Due to our regular schedule, there will be no Top Ten issue next Monday. That said, we will likely push out a quick Movers and Shakers next Tuesday or Wednesday, and will be online to help with any questions through noon on Wednesday (after which we will proceed to the all-important Thanksgiving cocktail and food prep).
Onto the market, it’s been another relatively tame week for the major indexes—the Nasdaq is leading the way (though only up 1% or so) while the S&P 500 is near flats-ville. However, there’s little question that the near-term correction/consolidation has continued under the surface.
For one, broader indexes have taken on some water this week; small and mid-caps are down 1.2% to 2% on the week after this morning’s sour open. Plus, sticking with the top-down theme, there’s no doubt the push higher in recent days has been relatively thin; the number of new highs on the Nasdaq has shrunk by around half compared to the early-November frenzy.
And third, just among individual stocks, it’s hard not to notice a rolling correction if you watch a fair number of stocks—many strong names are taking some hits and news-driven moves (like today’s rush out of economically-sensitive stocks on news of Austria’s COVID lockdowns) have become more intense.
Obviously, we’re open to anything, including this near-term correction morphing into something more serious. But to this point, just about all of the big-picture evidence remains in good shape—the intermediate-term trend of the major indexes is up, and despite many potholes, the vast majority of leading stocks are still in good shape.
Thus, our view really hasn’t changed—we half-expect some further tricky trading in the next couple of weeks to bring down sentiment, but until proven otherwise, we see these ups and downs as a normal (but annoying) follow-on to the superb run after early October. We’re not complacent, and it’s important to prune (or throw up mental stops) on any stocks you have that are cracking, but we’re also in favor of sticking with your strong, resilient stocks, giving them a chance to shake out the weak hands before resuming their advances.
Suggested Buys
Coinbase (COIN) is going to be a wild child and move in tandem with many crypto assets, but after six weeks up in a row, the stock’s recent pullback looks normal so far, with shares tagging the 25-day line today. If you don’t own any, you could start a position here or on dips of a few points, though we suggest a loose stop in the 290 area to give the stock room to move around.
Ford (F) continues to look really good, basically just marking time in the 19 to 20.5 range during the past couple of weeks. With the 25-day line down at 18 (rising quickly), we still think a shake could be on the way, but our guess is a dip to 19 or below will be a chance to start (or add to) a position, with a stop down in the 16.5 to 17 area.
Suggested Sells
ConocoPhillips (COP) – Not a leader in the group, the cracking 50-day line today
Hilton (HLT) – tripped stop (and 50-day line) on today’s travel-related rout
KKR & Co. (KKR) – taking a decent profit in a name that’s had a massive run
Range Resources (RRC) – tripped stop
Teck Resources (TECK) – tripped stop
Suggested Stops
Affirm Holdings (AFRM) near 130
Bill.com (BILL) near 299
Cameco (CCJ) near 24
CF Industries (CF) near 57.5
Civitas (CIVI) near 50
Dexcom (DXCM) near 550
EOG Resources (EOG) near 84
International Game Tech. (IGT) near 28
JB Hunt (JBHT) near 185
LendingClub (LC) near 35.5
LPL Financial (LPLA) near 161
Marathon Oil (MRO) near 14.7
Medpace (MEDP) near 205
Monday.com (MNDY) near 355
Palo Alto Networks (PANW) near 495
Pioneer Natural Resources (PXD) near 169
Pure Storage (PSTG) near 26.5
Tandem Diabetes (TNDM) near 129
United Rentals (URI) near 360
Xenon Pharm (XENE) near 28.5