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Just a little over a month ago, stocks were crashing. But things are changing fast.

The tariff uncertainty has vastly improved with the announcement of trade deals with the U.K. and positive negotiations with China. The S&P has soared 22% from the intraday low on April 7. The index is now in positive territory YTD and within 5% of the all-time high. The technology-laden Nasdaq index is up 28% from the April low.

But the market tends to overreact in the near term. Tariff trouble isn’t over yet. There could still be setbacks. A negative headline can roil the market on any day. There’s also the economy. Growth is slowing. It may pick up or slow further. What will be waiting beyond the tariffs?

Fortunately, there is a trend to bank on that will thrive regardless of the near-term gyrations of the market or economy.

Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment. It is a generational phenomenon that will drive certain stocks to huge gains. The dominant trend has sold down and consolidated in recent months. Such a move was overdue. But technology is coming back strong. It’s the hottest sector again.

In this issue, I highlight a goliath in the technology industry that is poised for a huge growth windfall from artificial intelligence in the years ahead. The stock has fallen far from the high. But the AI trend is revving up again and will likely transcend the current unpredictable environment.

Earnings season is getting hot and heavy. Results have been good so far, and continued positive earnings reports could ignite a bullish trend.

Several big tech companies report on earnings this week. The results could determine if the technology sector, and consequently the market indexes, move higher. It’s been a huge year so far for cyclical sectors, including energy, materials, industrials, and consumer stocks. The rally has broadened while technology has sputtered.

There’s no question that last Thursday’s and Friday’s show of support in the major indexes and many stocks (especially growth-oriented stocks) was a positive sign—it tells you big investors are still interested in buying on weakness at or near support levels. (Many stocks found support near their 50-day lines.) That continues to bode well for the intermediate- and longer-term uptrend. That said, there are still question marks in the short-term—there’s been lots of distribution since mid-May, especially in many defensive and interest rate-sensitive areas, and sentiment remains a bit complacent. By all means, you should hold onto your top performers, but for now, we continue to advise caution when it comes to new buying (keep positions small) and holding some cash.

Perhaps the most impressive thing we saw this weekend were our own screens—this week’s list has a ton of great-looking charts despite the market’s recent sloppiness. Our favorite of the week is Parexel (PRXL), which remains in a tight, controlled uptrend and has great growth prospects.

Stock Name	Price	Buy Range	Loss Limit
Salix Pharmaceuticals (SLXP)	0.00	59-61	52-54
Pioneer Natural Resources (PXD)	0.00	139-144	129-131
Parexel Corp. (PRXL)	0.00	44-46	41-42
OmniVision (OVTI)	0.00	18-19	16.5-17
MercadoLibre, Inc. (MELI)	980.83	113-118	103-105
EQT Corporation (EQT)	0.00	78-82	74-75
Electronic Arts (EA)	0.00	21.5-22.5	19.5-20.5
Ctrip.com International Ltd. (CTRP)	34.94	30-32.5	27-28
Conn’s Inc. (CONN)	0.00	51-53	46-47
TD Ameritrade (AMTD)	0.00	22.5-23.5	20.5-21

Current Market Outlook


The big-cap indexes started strong today on news of a new NAFTA deal, but under the surface, we’re seeing continued rotation and signs of degradation. Small- and mid-cap indexes took hits today and remain below their 50-day lines, while most growth stocks continue to act iffy. To be fair, the start of a new quarter often sees many crosscurrents, and most leading stocks, while choppy, remain in uptrends. But we’ve now seen funky action and lots of rotation for over a month, which has our antennae up. We’re moving our Market Monitor to a level 6 and feel the next few days will be telling—if leaders are OK, we expect to see support show up, but if not, the odds of a longer pullback will increase.

As for our screens, we’re still finding a good number of good charts, albeit in a variety of sectors. Our Top Pick today is Allegheny Technologies (ATI), a specialty metals firm that is showing signs of getting going after months of base-building.

Stock Name	Price	Buy Range	Loss Limit
Alarm.com (ALRM)	71.33	55.5-57	51-52
Allegheny Technologies (ATI)	27.78	28.5-30	26-27
Ecopetrol (EC)	22.17	25.5-27	22.5-23.5
Intelsat (I)	25.46	27-29	24-25
Paycom Software (PAYC)	0.00	145-150	136-139
PetIQ (PETQ)	30.82	36-38	33-34
Teladoc, Inc. (TDOC)	127.95	79-83	70-73
Vale S.A. (VALE)	15.40	14.5-15	13.2-13.6
WPX Energy (WPX)	0.00	19.3-20.2	17.4-17.9
Zendesk (ZEN)	82.19	67-70	61.5-63.5

Current Market Outlook


The market has been thrashing around during the past few trading days, with big gaps up and down, dramatic reversals and news-driven moves. But overall, nothing has really changed from our point of view—most growth leaders are still under pressure after suffering abnormal selling the prior couple of weeks, which, coming after a prolonged upmove, raises the odds that further potholes are ahead. Of course, it’s not all bad—today was a stick save for the major indexes (most bounced nicely off their 50-day lines), and while the broad market has pulled back, many areas are doing so normally. All told, we remain flexible, and are open to the possibility that the recent dip was more of a shakeout than the start of a rough patch, but the burden of proof is on the bulls to step up. Until then, we prefer being cautious.

The good news is that our stock screens continue to pick up on some potential fresh leaders should the market find its footing. Our Top Pick this week is Novocure (NVCR), an innovative player in the cancer market that’s come to life after a year-long rest. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
10X Genomics (TXG)	121	116-120	103-105
DouYu (DOYU)	16	15.2-16.2	13-13.7
The Gap, Inc. (GPS)	17	16.5-17.5	14.5-15.2
Guardant Health (GH)	103	98-102.5	88-90
The Mosaic Company (MOS)	18	17.2-18.2	15.4-16
MyoKardia (MYOK)	124	116-121	103-106
Novocure (NVCR)	98	93-98	81-84
Snap Inc. (SNAP)	24	22.5-24	20-21
Taiwan Semiconductor (TSM)	80	78-81	71-73
Target (TGT)	148	145-149	132-134

Current Market Outlook


Growth stocks suffered another shot across the bow last Monday, and for the next three days, most didn’t bounce much. But last Friday and today’s action was far more encouraging, with leading stocks rebounding nicely and the broad market doing decently, too. Of course, we never put too much emphasis on just a day or two; the market wasn’t hanging by a thread before the latest bounce (the trends of the indexes and leading stocks were up), and today’s action doesn’t necessarily mean it’s up and away from here, either. In fact, with earnings season coming up, we still think focusing on the right stocks and looking for relatively lower-risk entries is your best bet. But until proven otherwise, most of the rubber-meets-the-road evidence remains bullish, so you should, too.

This week’s list has a broad mix of cyclical and growth issues to choose from. For our Top Pick, we’re going a bit speculative—Plug Power (PLUG) is low priced, but very liquid, and the recent pattern (huge-volume rally, controlled pullback) looks very tempting.

Stock Name	Price	Buy Range	Loss Limit
ANGI Homeservices Inc. (ANGI)	14.81	14.5-16	12-12.7
Arconic (ARNC)	17.00	15-16.5	13-13.5
Bloom Energy (BE)	16.22	15-16.5	12.5-13.5
Carrier Global Corporation (CARR)	26.23	24.5-25.5	22-22.5
D. R. Horton (DHI)	66.55	61.5-64	55.5-57
GDS Holdings Limited (GDS)	80.15	78-82	71-73
Plug Power (PLUG)	8.35	8.0-8.7	6.6-7.0
Saia Inc. (SAIA)	129.19	120-125	109-112
Spotify (SPOT)	272.82	278-290	244-249
Vapotherm (VAPO)	48.53	44-47	38-40

Current Market Outlook


Just over a week ago, it looked like the market’s intermediate-term trend was going up in smoke as cyclicals cracked and growth stocks remained hit or miss. But, frankly, last week’s action was one of the more impressive few days we’ve seen in a while—most indexes roared back, we saw more stocks (growth and otherwise) pop on excellent volume and even some hard-hit areas rebounded nicely. To be clear, we don’t think the market is out of the woods; many cyclical names still look iffy, and it’s not like there are dozens of great-looking breakouts to sink your teeth into (yet). Thus, we still think picking your spots is important, but it’s also true that we’re seeing more good-looking patterns than we have in a while. We’re nudging up our Market Monitor to a level 7.

This week’s list features many of the names that have seen some persistency and power of late. Our Top Pick is Dynatrace (DT), which appears to be emerging from a big-picture, year-long consolidation.

Stock Name	Price	Buy Range	Loss Limit
Alnylam Pharmaceuticals (ALNY)	166	162.5-167.5	149-152
American Eagle (AEO)	37	35.5-37.5	32-33
CommScope (COMM)	21	20.5-21.5	18.5-19
Deckers Outdoor Corp. (DECK)	382	370-385	340-345
Dynatrace (DT)	60	57-59	51.5-52.5
Natera (NTRA)	117	113-116	102-104
Nutanix (NTNX)	39	37-38.5	32.5-33.5
Shopify (SHOP)	1495	1450-1500	1310-1340
Upwork (UPWK)	57	53.5-56	47-48.5
Vista Outdoor Inc. (VSTO)	45	42-44	37.5-38.5

Current Market Outlook


We traded in our crystal ball years ago, especially when it comes to short-term predictions, but our screens over the weekend told a clear tale: While it’s not 1999 out there, many growth stocks and indexes have enjoyed good moves of late, and when you combine that with some signs of complacency, a retrenchment looks possible. (Today, in fact, might be the start of that, as many growth stocks were hit.) Still, this isn’t some grand market call—overall, the environment remains the same, with some divergent and rotational action, but also more and more names acting well—but our point is more to make sure you’re still sticking with great-looking stocks at decent entry points, as opposed to chasing things higher. We’ll leave our Market Monitor unchanged this week.

This week’s list has a bunch of strong names thanks to recent earnings reports and other news items. Our Top Pick is Ambarella (AMBA), which staged a massive blastoff on earnings—we’re OK starting small here or on dips.

Stock Name	Price	Buy Range	Loss Limit
Academy Sports and Outdoors (ASO)	45	43-46	38-39
Ambarella (AMBA)	136	132-138	112-115
Asana Inc. (ASAN)	95	88-92.5	75-78
Avalara (AVLR)	188	180-185	164-167
Chipotle Mexican Grill (CMG)	1895	1850-1900	1700-1760
Floor & Décor (FND)	125	122-126	110-112
Macy’s, Inc. (M)	22	21-22	18.5-19
Nutanix (NTNX)	44	41.5-44	36.5-37.5
Quanta Services (PWR)	115	109-113	97.5-99.5
TX (TX)	54	51.5-53.5	46.5-47.5

The environment remains essentially the same this week, as we have a broad market that continues to struggle, major indexes that are back in intermediate-term downtrends and commodity and defensive stocks about the only two areas that are doing decently. We continue to see secondary signs that are encouraging, including many measures that tell us selling pressures are gradually easing, but as always, we need to see the market and individual stocks prove themselves before changing our stance in any real way. It’s best to remain mostly cautious until the buyers return. Our Market Monitor will remain at a level 5.

New technology is driving huge demand growth in old technology. The growth of artificial intelligence, electric vehicles, and semiconductor manufacturing will generate huge growth in electricity.

After being stagnant for most of the last two decades, electricity demand is soaring. Most of the increasing electricity demand (from data centers, EVs, and chip manufacturing) is coming from climate-conscious technology companies that will likely try to secure carbon-friendly power sources whenever possible.

Companies that can provide low-carbon electricity generation should be the primary beneficiaries of this increasing electricity demand. Opportunity is being created for certain companies that also tend to be very recession-resistant at a time when the economy is slowing.

But there is one utility that stands above all others in terms of the current opportunity. And it is highlighted in this month’s issue.

After two-plus months where sellers really couldn’t make a dent in the market, last week was a change, with the major indexes down and, more important to us, many growth stocks decisively cracked near- to intermediate-term support. On the flip side, the vast majority of the top-down evidence remains positive, some growth names are holding their own and a bunch of industry, energy, transport and other cyclical names are still acting fine. Put it together and we think it makes sense to pull in your horns a bit for now, but we’re also not selling wholesale, as the odds continue to strongly favor the market (and many leaders) working its way higher once this selling squall passes. We’re moving our Market Monitor down to a level 6.

Interestingly, despite the market’s hiccup, it wasn’t hard to find a bunch of solid charts (and some solid setups) in a variety of sectors, as you’ll see in this week’s list. Our Top Pick is a cookie-cutter retailer that looks to have finally emerged from a long bottoming effort.

The markets have continued to flirt with new highs—pulling back and then moving forward—for the past month.

The Fed’s 50-basis-point rate cut inspired investors, home buyers, and those folks wanting to refinance their homes. The Mortgage Bankers Association reported that refinancing applications rose 20% right after the rate cut!

The major indexes all closed last week near their highs, which is one big factor keeping the top-down evidence very bullish; nothing has changed with our big picture positive thoughts. That said, right now, we don’t think the situation is as strong as the indexes suggest—just looking at a variety of names, it’s clear many are consolidating even as the S&P and Nasdaq tested new high ground late last week. Again, we’re not saying that’s a big bugaboo, but right now, we continue to think being more discerning when looking for entry points makes sense, as does pruning some laggards if you have them. We’ll keep our Market Monitor at a level 7.

This week’s list has something for everyone, with a decent amount of cyclical exposure but also some true blue growth names as well. Our Top Pick is helping to lead a new group move in metal stocks in general (and copper in particular).

On the one hand, there are still a decent number of stocks that act well and are generally advancing, but on the other hand, more and more names across a variety of areas are hitting air pockets or simply falling by the wayside. To us, the divergence tells us the risk of a big character change is elevated, and that’s why we continue to advise holding a decent chunk of cash—but with plenty of stocks still acting well, we’re also OK with selective buying in names that are under strong accumulation. We’ll again leave our Market Monitor at a level 7, though we remain flexible and will adjust exposure if need be.

This week’s list is another eclectic one, with an increasing number of turnaround-type stories. Our Top Pick is a bigger outfit that’s very cheap but is starting to see some AI benefits—and the stock has shown exceptional power of late.

For the big-cap indexes, last week was intriguing, with a sharp dip from resistance on Monday and Tuesday leading to an equally-sharp snapback—a possible shakeout of sorts. That said, the bullish action remains concentrated in a handful of names; the broad market is still meandering at best and there were more than a few air pockets last week among potential leaders. All in all, we’ll drop our Market Monitor to a level 4—that said, there are still tons of earnings reports on tap this week and next, so a bunch of gaps up (and broad market strength) could give us plenty to work with.

This week’s list has a bunch of recent earnings winners as well as a few that are set to report. Our Top Pick was an early leader off last year’s October lows and looks to be resuming its uptrend after a two-month rest.

For the first time in a while we started to see big investors floor the accelerator last week, with some names really letting loose on the upside. Moreover, even the “non-AI” nascent leaders that perked up earlier in May are acting fine, with most digesting gains in normal fashion. All of that is to the good—though the top-down flaws that we’ve written about are all still out there, too, with relatively few stocks hitting new highs, a good number of blowups each week and most areas of the market still struggling. Right now, we’re keeping our Market Monitor at a level 5, but we’re watching things closely—if more leaders emerge, it would certainly add to the bullish side of the ledger.

This week’s list has a bunch of solid growth and earnings-related plays from a variety of industries. Our Top Pick is practically a blue chip name from the software field that’s emerging from a solid launching pad.

After an ugly day October 10, the major indexes showed solid overall support last week, but under the hood was another round of volatile action, The market’s intermediate-term trend continues to tilt up, though we’re still taking things on a stock-by-stock basis and are closely watching earnings season, which is about to rev up. In the meantime, we’re just following the plan that’s been working for us: Being selective on the buy side, holding strong names (albeit with some partial profits on the way up) and also raising stops as time passes. We’ll again stick with a level 7 on the Market Monitor.

This week’s list is a mixed bag in terms of sectors and setups, with some we’re considering entering on strength and others on pullbacks. Our Top Pick is likely in for years of accelerating growth, and after a big run into early October, the recent pullback looks normal. We’re OK starting small here or on a bit more weakness.

2022 has been pretty sour this year, but let’s give credit where it’s due—the market has been able to put one foot in front of the other for a few weeks now, and importantly, after showing enough strength to turn the intermediate-term trend up two weeks ago, the buyers have kept on buying, really the first time we’ve seen that all year. The vast majority of action has been from off-the-bottom names, so it’s not the time to go bananas on the buy side. But with the evidence continuing to improve, we’re OK extending your line as things start working.



This week’s list has a wide range of names in a variety of sectors. Our Top Pick has a reliable story and solid growth, and its sector is suddenly acting very spunky. Try to buy on dips after the recent move.

Great Growth & Value Stocks That Are Poised for Immediate Upside | on April 18, 2019 Crista Huff, Chief Analyst of Cabot Undervalued Stocks Advisor, spoke about learning how you can combine the best of three famous stock-investing strategies to enhance your portfolio returns and lower your portfolio risk.

When it comes to the market’s action, there’s not much to say—the crash-like action seen in growth stocks since the start of the year has spread out to most every nook and cranny of the market. To be fair, near term, we are starting to see some extremes, plus we’re still seeing a fair number (not a lot) of stocks hanging in there—taking on water for sure, but not definitively cracking. Overall, we continue to advise a cautious/defensive stance; capital preservation is the first goal these days. That said, given how stretched everything is to the downside, we think it’s OK to give things a little more wiggle room on the downside if you already have lots of cash. Our Market Monitor will remain at a level 4.



This week’s list is mostly a mix of energy and defensive-oriented stocks. Our Top Pick is a big energy services outfit that should see growth accelerate going ahead.