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Current Market Outlook


From a top-down perspective, there’s not much to complain about when it comes to the current market—the intermediate-term trend of the major indexes is firmly pointed up, and the broad market has come alive in a big way, with two major blastoff indicators turning green in the past two weeks. Thus, for the overall market, the outlook is mostly sunny, though there’s always the chance of a passing shower. However, leading growth stocks are now on the run a little bit; it’s been two weeks of on-and-off selling, and many are beginning to approach key support areas. As we’ve written lately, the good news is that breakdowns have been few and far between; the pullbacks have been normal thus far, but the next few days should be telling to see if growth names are in for a deeper retreat or whether everything can get in gear with the broad market on the upside.

As you’d expect, this week’s list is heavier in names that have more recently come to life, including a few cyclical-related names. Our Top Pick is Autodesk (ADSK), a growth-y name that should also get a boost from the economic recovery, and the stock has leapt nicely to new highs.

Stock Name	Price	Buy Range	Loss Limit
ASML Holding (ASML)	350.01	330-340	300-305
Autodesk (ADSK)	229.00	220-230	198-203
Carrier Global Corporation (CARR)	26.23	21.5-23	18.5-19.5
Datadog (DDOG)	81.52	72.5-77	62-64.5
Elastic (ESTC)	86.17	78.5-82.5	70.5-72.5
Marvell Technology Group (MRVL)	36.88	32.5-34	28.5-29.5
Square, Inc. (SQ)	91.04	85-89	74-76
Thor Industries (THO)	104.76	101-106	89-92
Trade Desk (TTD)	468.02	338-358	298-308
Trex Company (TREX)	117.56	117-122	103-105

Current Market Outlook


This morning’s positive news of a possible COVID vaccine helped the major indexes surge, but it also revealed some of the crosscurrents that remain—today saw a big bout of rotation, as leading growth titles were mostly lower while the lagging (usually economically-sensitive) areas did well. Even so, we don’t advise getting too involved in the day-to-day news or gyrations; overall, there’s still more positive evidence than negative, with the intermediate-term trend still up (today’s action helped on that front) and just about every leading stock remaining in a firm uptrend. Given the crosscurrents, we don’t advise going hog wild on the buy side, but we continue to think holding your strong performers (maybe with some partial profits here or there) and looking for decent entry points on strong names is the way to go. While we were going to knock our Market Monitor down late last week, the action of the past two sessions has us keeping it at a level 7.

This week’s list is a bit more diversified than in recent weeks, with strength seen in a few more sectors. Our Top Pick is PayPal (PYPL), which appears to have resumed its run after a multi-month rest period. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Avalara (AVLR)	102.00	97-100	88-90
Beyond Meat (BYND)	132.87	122-128	109-113
Fastly (FSLY)	39.31	36-39	31.5-33.5
Fortinet Inc. (FTNT)	137.53	137-143	123-127
Inphi (IPHI)	120.16	105-110	94-97
MyoKardia (MYOK)	108.56	106-110	92-95
Ollie’s Bargain Outlet (OLLI)	103.94	73-77	64-66
PayPal (PYPL)	147.00	142-147	129-132
Scotts Miracle-Gro (SMG)	155.72	139-145	125-128
Tesla, Inc. (TSLA)	818.87	770-815	680-705

Current Market Outlook


Growth stocks are still in mostly good shape, which is the good news. And while we see reasons for continued optimism, it’s also hard to be a raging bull right now. There’s quite a bit of rotation underway, and sentiment is still elevated. On top of that, the number of Nasdaq stocks making new lows is more than we’d like to see, which means cross-currents could become a factor in the near term. Still, the weight of evidence prevents us from being overly cautious; plus there are a fair number of nice-looking setups in individual stocks across several industries. With this in mind, we’re leaving our Market Monitor at level 6 for now.

This week’s list includes a mix of growth and cyclical themes, most of which have a solid story.
Our Top Pick is Nvidia (NVDA), an established semiconductor name with a growing presence in the soaring high-performance computing (HPC) market, and which has just broken out to new highs on strong volume.

Stock Name	Price	Buy Range	Loss Limit
ArcelorMittal (MT)	30	29-30	25.5-26
Brooks Automation, Inc. (BRKS)	98	92-97	80-82
Jabil Inc. (JBL)	54	52.5-55	46-47.5
JetBlue Airways Corporation (JBLU)	20	19-20.5	17.5-18
KBR Inc. (KBR)	40	38.5-39.5	33-34
Levi Strauss & Co. (LEVI)	28	27-28	23.5-24
NVIDIA Corporation (NVDA)	614	595-615	550-555
Snap-On Inc. (SNA)	236	230-235	208-210
Square, Inc. (SQ)	245	240-243	210-212
Vale S.A. (VALE)	19	18.5-19.5	17-17.5

Current Market Outlook


News of travel restrictions due to a new strain of the virus over in Europe hit the major indexes early today, but when it comes to our analysis, the reason for the initial selloff is secondary—the setup for an air pocket has been around for a couple of weeks as sentiment was elevated and most stocks and indexes were extended to the upside. Thus, today’s hiccups weren’t totally unexpected, but the damage was limited; at day’s end, the major indexes held up well and remain in intermediate-term uptrends, as do most stocks. Near term, further reverberations are likely, so we still think it best to pick your spots and stocks carefully, but with the major evidence still positive, we are too.

This week’s list has a nice mix of stocks benefiting from different trends (growth, reopening, cyclical, etc.). Our Top Pick is Elastic (ESTC), which has finally, decisively gotten going from a long 20-month IPO base.

Stock Name	Price	Buy Range	Loss Limit
Alcoa (AA)	22.12	21-22.5	18-18.7
Cardlytics (CDLX)	146.04	135-141	116-119
Coeur Mining (CDE)	9.88	9.5-10.0	8.2-8.5
Elastic (ESTC)	155.91	147-153	129-133
Floor & Décor (FND)	99.10	95-98	85-87
Kodiak Sciences (KOD)	149.51	136-142	117-120
PayPal (PYPL)	237.79	232-238	209-213
Redfin (RDFN)	78.54	72-75.5	60-63
Smartsheet (SMAR)	72.00	70-73	61-63
WESCO International (WCC)	75.16	72-75.5	62-64

Last week brought some true extremes when looking at sentiment and oversold conditions, telling us some type of bounce was likely. That’s what we saw starting Thursday afternoon, and we’re optimistic we may have hit a workable low—“workable” in this case meaning the market can work higher for more than just a couple of days. That said, we’ll just see how it goes: While there are a few stocks acting well and set up decently, the vast majority of evidence remains negative, so we still favor defense and patience as the market tries to etch a bottom.
Encouragingly, though, this week’s list does have a few names that have shown outsized support during the past couple of weeks, often after earnings, and our Top Pick is one of them as it attempts to round out its launching pad.

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

Current Market Outlook


The news-driven environment featuring incessant rotation and crosscurrents remains in effect; throw in the fact that breadth is narrow (about half of stocks are still below their 50-day lines despite the S&P 500 and Nasdaq being near new high ground; broad market indexes are chopping sideways) and earnings season is approaching and we think it’s best to continue going slow and aim to buy on weakness. That said, there are a growing number of good-looking growth stocks out there—not a ton are kiting higher, but there are lots of setups and, while there have been bumps in the road, the sellers really haven’t been able to sink their teeth into them despite some recent strength. All in all, we’re more optimistic than not, but stock selection and solid entry points are key.

This week’s list has a variety of sectors represented, including a few that have avoided the market’s volatility. Our Top Pick is Arista Networks (ANET), whose stock is in a smooth uptrend as growth picks up steam.

Stock Name	Price	Buy Range	Loss Limit
Antero Resources (AR)	15	13.8-14.3	12.3-12.7
Ares Management (ARES)	65	62-64	57-58
Arista Networks (ANET)	371	363-370	340-345
Bentley Systems (BSY)	64	62-64.5	57-58.5
FIGS, Inc. (FIGS)	44	42.5-45	36-37
L Brands (LB)	77	73-75.5	65.5-67.5
NVIDIA Corporation (NVDA)	821	775-795	700-710
PayPal (PYPL)	303	288-297	268-273
Rapid7 (RPD)	103	97-101	87-89
Synaptics (SYNA)	158	154-158	136-138

Last week brought some renewed chop and crosscurrents, with broader indexes finding some sellers and a few stocks hitting potholes before or after earnings. Moreover, we’re seeing indications that complacency has made a quick comeback, and with many good-looking stocks set to report earnings over the next two weeks, some near-term selling wouldn’t surprise us. Even so, all of this looks normal in the context of where the market has come from: The prior three weeks were excellent, the intermediate-term trend is pointed up and the vast majority of stocks are acting well. Could we see another change in character, with the market falling back into its spin-cycle ways of 2021? It’s always possible, but we go with the weight of the evidence, which today remains mostly positive. We’ll leave our Market Monitor at a level 7 today.

This week’s list is another well-rounded one, with some recent earnings winners and stocks from a variety of industries. Our Top Pick is Enphase Energy (ENPH), which appears to be getting going from a deep base after earnings. We prefer entering on a bit of weakness if possible.

Stock Name	Price	Buy Range	Loss Limit
Albemarle Corporation (ALB)	256	247-257	220-225
Bonanza Creek Energy (BCEI)	56	52-55	46-48
Coinbase (COIN)	331	305-320	267-277
Dexcom (DXCM)	627	605-630	535-545
Enphase Energy (ENPH)	240	220-232	190-196
J.B. Hunt (JBHT)	196	191-197	178-181
Medpace (MEDP)	226	212-222	192-196
Marvell Technology Group (MRVL)	69	66-68.5	60-61.5
SLAB (SLAB)	193	182-192	160-165
WOLF (WOLF)	131	123-129	101-105

As volatility picks up in the market, so too do the dramatic headlines, and we’re starting to see that now—but once again, nothing has really changed with the evidence: The trends of the major indexes are still pointed down, and most strength is being rejected, both of which argue for a continued defensive stance. As for rays of light, we’re still seeing a fair amount of names holding up well, as well as some minor positive divergences. All in all, our antennae remain up—we think upside surprises are possible—but our Market Monitor remains at a level 3.


This week’s list has another crop of resilient stocks from a variety of different areas, from medical to energy to restaurants. Our Top Pick is a familiar growth stock that went through the wringer and is now base-building normally despite the market’s grumpiness.

Today’s candidate provides digital health solutions to people with chronic health issues. Its biggest market is people with heart conditions, but it is branching out to the diabetes market as well. For a short window of time, I believe we can establish a position while shares are “on sale.”

Today I am fulfilling your dreams and profiling a company that specializes in tax collection. Three cheers for taxes!
Seriously, nobody likes taxes. With the exception of state treasurers. Taxes are just one of those parts of life that you’d prefer to ignore. But if you’re a retailer you can’t do that. In fact, retailers across the U.S. - and the world for that matter – have to devote more and more attention to sales tax compliance.
That’s the big picture trend powering one company’s growth. All the details are inside this month’s Issue. And I promise, it’s going to be more interesting than you think!

After a tough start following the long weekend, the market did find some support by week’s end, but overall, the situation remains the same: The evidence is more positive than not, but when looking at individual stocks, there are many areas that are struggling, while on a day-to-day basis, money continues to thrash around. To be clear, that action doesn’t predict doom—this is a bull market after all—but it does mean that making and holding onto money in this environment remains a challenge. We’ll stick with a Level 7 on the Market Monitor.

Interestingly, this week’s list does have a bit more of a growth flavor, though it’s not all AI, as other areas are seeing a bit of leadership emerge. Our Top Pick has been a clear mid-cap leader of the advance and is now exhaling to its 10-week line.

The market is still in fine overall shape, but under the hood, it’s becoming more and more of a mixed situation. To be clear, there remains a lot more good than bad when examining the evidence, but for the here and now, we advise simply taking things on a stock-by-stock basis—holding your strong performers (albeit also raising stops and potentially booking a partial profit here or there), while cutting bait with those that lag or crack support and keeping some powder dry. We’ll again leave our Market Monitor at a level 7—we’ve had good success finding winners but don’t advise flooring the accelerator at this point.

This week’s list is growth-ier despite some potholes seen last week, which is a plus. For our Top Pick, we’re going with a blue chip in the AI theme, with its recent post-earnings pullback setting up an opportunity.

The Federal Reserve yesterday raised the target for its benchmark interest rate by 0.25% to a new range of 5%-5.25%, the highest since September 2007. This will impact the value and stability of the U.S. dollar and stock markets in several ways.

During the only stable dollar eras of the last century, annual GDP growth averaged 4.9% from 1922-29, 4% from 1948-71, and 3.7% from 1983-2000.

In comparison, over the last two decades, a more volatile dollar saw average growth of only 1.9%. Had the dollar remained stable since 2000, with a steady 3.7% growth, the economy would be nearly 50% greater than it is today, and we probably would have avoided all these financial crises along the way.

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