Search

I’ve been receiving questions recently that essentially ask, “Why did this stock go up when the company reported bad news?” and “Why did this other stock go down when the company reported good news?”

Oil prices are volatile now that about half of Saudi Arabia’s oil production is temporarily curtailed. Rising oil prices can help oil and chemical stocks, and hurt airline stocks.

Coal is dead; renewable energy is the future. And the best renewable energy stocks are worth your consideration. Here are two that stand out.

The market seems to be a bit complacent given the risks of the virus spreading rapidly in China and elsewhere but we need to remain a bit cautious. There is some suspicion that China is downplaying the numbers.

The indexes are having another good day today, led by growth stocks this time—as of 3:30pm, the Dow is up 253 points and the Nasdaq is up a big 322 points.

The market’s slide this week has put our Cabot Tides back on the fence. That said, most leading growth stocks continue to act very well. All together, we’re holding our strong, profitable stocks and looking at new buys, while honoring our stops and keeping a bit of cash on the sideline.

Emerging and international markets are holding their own as U.S. markets hit new highs in the wake of modest interest rate cuts by the Fed.

It was a fairly quiet week in terms of the leading indexes’ performance as the S&P 500 fell marginally, the Dow mostly finished the week unchanged, and the Nasdaq fell by 0.4%.

Current Market Outlook


The first three weeks of December were a complete disaster for the market, with most major indexes falling 16% to 19% during that time. The good news is that, after some historic oversold extremes (we saw three straight days of more than 1,000 stocks hitting new lows on both the NYSE and Nasdaq!), stocks have finally begun to bounce; ideally this upmove lasts for at least a couple more weeks and gives the market a low to work from, while some new leadership takes pole position for the next sustained uptrend. Still, as we have all year, we advise just taking things as they come—right now, the trends of the major indexes and the vast majority of stocks are pointed down (just 15% or so of stocks are north of their 200-day lines), so we’re sticking with a defensive stance and waiting patiently for the bulls to make a stand.

That said, we’re still seeing a good number of resilient ideas, including many with great growth stories. If you’re looking to nibble, our Top Pick this week is Planet Fitness (PLNT), which has a unique, independent growth story that continues to attract big investors.

Stock Name	Price	Buy Range	Loss Limit
Alteryx (AYX)	132.78	56-60	49-51
Atlassian (TEAM)	182.16	85-90	75-78
Broadcom Limited (AVGO)	266.26	244-250	220-225
Crocs (CROX)	0.00	25-36.5	22-23
Deckers Outdoor Corp. (DECK)	141.68	123-128	111-113
Elastic (ESTC)	86.17	67-71	58-60
Planet Fitness (PLNT)	0.00	51.5-54	46-47.5
ServiceNow (NOW)	341.86	173-180	157-161
Tencent Music Entertainment (TME)	18.41	12.7-13.5	11-11.5
Zscaler (ZS)	126.22	37-39.5	33.5-35

Markets have continued to improve, and so have economic statistics. Housing price increases—while slowing somewhat—are still on the rise, with the Case-Shiller Index posting a 7.3% increase in prices for the month.

ADP employment rose to 192,000, higher than the 183,000 expected. Job openings declined just a bit, to 8.5 million from 8.8 million last month. And the unemployment rate edged up from 3.8% to 3.9% in April.

The market was hit hard again last week, so all trends remain down, and increased caution is still advised.


This week I’m selling two stocks that have weakened since reporting first-quarter results last week, but I’m also upgrading one to buy!


As for the new recommendation, it’s a well-known retailer with a slow but solid growth story whose stock is cheap.


Details inside.

Given the still-iffy broad market, we\'re not advising you to dive in with both feet, but we are adding one new stock to the Model Portfolio tonight and will look to put more cash to work should the bulls continue to make headway.

Earnings season is over, so there were no companies that reported earnings this past week. However, the next earnings season is just around the corner, starting with Walgreens Boots Alliance (WBA) on March 28.

Small caps paused this week to digest a few wild weeks. The S&P 600 Small Cap Index is essentially unchanged since I last wrote, which I think is a victory at this point.

Getting back into the market after a correction is like getting back in the water after a shark alert.

It’s not always that the market outperforms in October, but this year’s “jinx month” came and went on a positive note (albeit with a minor setback earlier in the month).


Granted, there was some volatility on the political front, but as far as the equity market was concerned, it wasn’t too bad. The S&P 500 index stood at a record high as recently as Wednesday, and Wall Street’s favorite stocks and ETFs are mainly trending higher as we exit the month.

Current Market Outlook


Earnings season. The upcoming U.S. elections. Spiking COVID positives and accompanying Europe lockdowns. All told, what was a cleaner situation a couple of weeks ago has turned into one with a lot of crosscurrents, and that has caused a buyers’ strike of sorts, with the major indexes and many leaders pulling back of late. It’s not a disaster, but today’s action has put the intermediate term back on the fence; basically, it looks like the market is still in a consolidation phase after the big March-through-August rally. It’s a similar deal with leading stocks, as many have taken on water, though few have cracked. (In fact, we see a lot of good setups out there should buyers step up soon.) All in all, we’re not making any huge moves, but we’ll knock our Market Monitor down a notch and keep a close eye on things.

This week’s list is an interesting mix of growth and turnaround situations, including a couple that have their hands in both cookie jars. Our Top Pick is Align Technology (ALGN), which just galloped out of a two-year base after earnings. Aim to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Align Technology (ALGN)	448.51	420-440	375-390
AAXN (AAXN)	101.69	99.5-102.5	90-92
Exact Sciences (EXAS)	107.06	103-107	91-93
The Gap, Inc. (GPS)	17.75	19.5-20.5	17-17.5
General Motors Company (GM)	36.83	34-36	31-32
GrowGeneration (GRWG)	17.75	16.5-18	14-15
MercadoLibre, Inc. (MELI)	1270.86	1180-1240	1070-1110
NIO Limited (NIO)	25.86	23.5-25	20.5-21.5
Shift4 Payments (FOUR)	55.98	51.5-54	46-47.5
Square, Inc. (SQ)	176.77	164-171	148-152

There’s been a variety of news pertaining to airlines, and also to the Boeing 737 MAX jet problem, in recent weeks. It can be hard to know which industry-specific stocks to own and which to ignore. I always use profit growth as my first line of defense when deciding which stocks might join my portfolios, on the theory that rising profits should theoretically lead to rising share prices.

Current Market Outlook


The market and many growth stocks had a solid three-day rally in the middle of last week, but the intermediate-term trend never turned up and the past couple of days tell us the sellers are still active—all major indexes we track are below their 50-day moving averages, with some (like the S&P 600 SmallCap) dipping to new correction lows. Stepping back, the longer-term trends are still positive, and the relatively resilient trading of many leading stocks is also a plus. But with the intermediate-term trend down and with the market having just enjoyed four months up without any pullback, it’s best to practice some caution—limiting new buying, not letting losses getting away from you and holding some cash makes sense. It wouldn’t take all that much strength to produce a new green light, and when one comes, we’ll adjust. But the evidence remains iffy here, and we think you should respect that.

Encouragingly, for the second straight week, the list is heavy on growth-oriented ideas that have held up pretty well. Our Top Pick, though, is Blackstone (BX), the huge Bull Market stock that’s benefiting from a company-specific change and the overall longer-term uptrend in asset values.

Stock Name	Price	Buy Range	Loss Limit
AAXN (AAXN)	87.11	61.5-64	56-58
Blackstone Group (BX)	49.12	39-40.5	36-37
Insulet (PODD)	175.69	100.5-104	93-95
Lending Tree (TREE)	411.51	375-395	345-355
Mercury Systems Inc. (MRCY)	68.92	70.5-73	64.5-66
Paylocity (PCTY)	97.34	96-99	88-90
SolarEdge Technologies Inc. (SEDG)	124.37	51-53.5	46-48
Twilio (TWLO)	183.39	134-138	122-125
Zoom Communications (ZM)	155.83	82-87	67-70
Zscaler (ZS)	126.22	74-77	66-68