Special Bulletin: Trading Suggestions September 22, 2016
Several of our portfolios stocks are rising this week, so I want to reiterate some trading suggestions in case the stocks reach price targets before the next weekly update of Cabot Undervalued Stocks Advisor.
Adobe Systems (ADBE) is reaching new highs. (See yesterday’s Special Bulletin below.) Traders should use stop loss orders (although I wouldn’t personally want to sell this stock). Everyone else should hold ADBE, and buy on dips.
Amazon.com (AMZN) is reaching new highs. Traders should use stop loss orders (although I wouldn’t personally want to sell this stock) and everyone else should consider buying AMZN, especially on price pullbacks.
Applied Materials (AMAT) increased the forecast for its 2019 fiscal year (October year-end) at its 2016 Analyst Day on September 21. In 2015, the company had forecasted $2.00 EPS in 2019. The updated 2019 EPS expectation is $2.45–$3.17, with an average of $2.81.
I recommend that all stock investors buy AMAT today, based on strong earnings growth, low valuation, and extremely bullish chart. Barring a few down days in the S&P 500 index, I expect AMAT to begin a run-up right away.
Boise Cascade (BCC) is rising because Goldman Sachs initiated coverage with a Buy rating and a price target of 34. There is upside resistance at 28. Traders should definitely sell near 28. My Buy recommendation for longer-term investors remains intact.
FedEx (FDX) rose about 7% yesterday. (See yesterday’s Special Bulletin below.) The stock could easily rise to the 180 to 185 range, at which point I definitely expect it to get stuck. I might issue a Sell recommendation depending on any changes in the earnings outlook resulting from this week’s earnings report.
General Motors (GM) just broke past 32, and is heading toward significant upside resistance at 35. All traders and longer-term investors should be prepared to sell near 35, because the stock’s going to get stuck there. Caveat: The dividend is safe so keep GM if the dividend is your primary investment goal.
H&R Block (HRB) continues to rebound from its recent price drop. Traders should watch for short-term price resistance at 24.25. Everyone else should buy and hold HRB for additional capital gains.
Royal Caribbean (RCL) is rising in reaction to this week’s dividend increase. (See yesterday’s Special Bulletin.) There’s some price resistance in the 72 to 74 area, so traders should be ready to make a decision. Everybody else should buy and hold this undervalued growth stock for longer-term capital gains.