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The major indexes remain in uptrends, there’s no doubt about that. And, despite some still-soggy action among many growth stocks, most of the broad market is trending higher, too. But not all uptrends are equal, and right now, we don’t see much power out there. That’s not a bad thing, per se, but it’s more of a two-steps-forward, one-step-back kind of advance, with lots of rotation still going on week to week. By all means, continue to do some buying in names you like, but we also advise holding some cash and picking your spots.

This week’s list has a slightly steadier feel to it than prior weeks, as money flows toward companies with dependable growth. There are also a few stocks that have popped on earnings and tightened up of late, including SanDisk (SNDK), which is our top pick. Shares are at a good risk-reward point here.

Stock Name	Price	Buy Range	Loss Limit
Waddell & Reed (WDR)	0.00	63-65	56-57
SanDisk Corp. (SNDK)	0.00	67-70	64-65
Salix Pharmaceuticals (SLXP)	0.00	86-88	74-75
US Silica Holdings, Inc. (SLCA)	0.00	31-33	29.5-30
Mohawk Industries (MHK)	0.00	138-143	129-130
Southwest Airlines (LUV)	0.00	17.5-18.5	15-16
Baker Hughes (BHI)	0.00	56.5-58.5	53-53.5
HomeAway, Inc. (AWAY)	0.00	35-37	31-32
Actavis (ACT)	0.00	160-163	156-157
ACI Worldwide (ACIW)	0.00	60-61	58-59

We’ve seen mixed action since the year began, which isn’t totally surprising given January’s normal wiggles. The major indexes are churning a bit up near their highs, something that can lead to short-term selling; at the very least, it’s telling you that buying pressures have eased as the calendar has flipped. On the other hand, we’re encouraged to see some growth stocks that had been sitting out the dance since early October begin to reassert themselves—so far this year, we’ve seen a handful of breakouts from legitimate bases, the first collection of breakouts since November, and most held well even in today’s selloff. All told, we continue to lean bullish, though we’re watching things closely.

This week’s list has a bunch of promising names, including a few with terrific growth stories. Our favorite of the week is Arris Group (ARRS), which, thanks to a huge acquisition last year, is a leading provider of next-generation set-top boxes. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Yelp (YELP)	41.30	74-78	69-70
United Therapeutics (UTHR)	0.00	105-110	95-97
United Continental Holdings (UAL)	96.76	43-45	39-40
Splunk (SPLK)	207.67	72-74	64-65
Pandora Media Inc. (P)	0.00	31.5-33.5	29-29.5
Medivation (MDVN)	0.00	68-70	63-64
JinkoSolar Holding (JKS)	0.00	31-34	28-29
FireEye (FEYE)	0.00	53-57	47-48
Broadcom Limited (AVGO)	266.26	50-52	47-48
Arris Group (ARRS)	0.00	23-24.5	20-21

The evidence has generally improved during the past two weeks, with the major indexes remaining in solid uptrends and, most encouragingly, more growth-oriented stocks showing power and emerging from basing structures. All of that is to the good, but earnings season is ramping up, and we know that can change any stock’s or sector’s outlook in a hurry. Put it together, and we’re still sticking with our lean bullish stance—now’s probably not the time to buy five or six stocks at once, but there are many attractive names out there, and getting in at opportune times should pay off.

This week’s list is heavy on growth stocks, though there are a couple of cyclical and special situation ideas, too. Our favorite of the week is HomeAway (AWAY), a firm we remain keen on, and a stock that’s testing support for the first time since a powerful November breakout.

Stock Name	Price	Buy Range	Loss Limit
T-Mobile US (TMUS)	0.00	30-32	27-28
SolarCity (SCTY)	0.00	70-74	63-64
Altisource Residential (RESI)	0.00	31.5-33	29-29.5
Pacira Biosiences (PCRX)	54.85	63-65	53-55
Palo Alto Networks (PANW)	236.92	60-62.5	55-56
The Manitowoc Company (MTW)	0.00	23.5-25	21.5-22
Harman International Industries, Inc. (HAR)	0.00	87-90	80-81
Forest Labs (FRX)	0.00	65-70	59-60
HomeAway, Inc. (AWAY)	0.00	40-42	37-37.5
AOL, Inc. (AOL)	0.00	48-50	44-45

There’s not much to say: The market and leading stocks continue to act in a textbook fashion, with not just more up than down but tame pullbacks that respect logical support and big volume on the advances--all signs that big investors are accumulating stock. We still want to be selective on new buys, and we’re sure earnings season will throw everyone a few curveballs, but we continue to put money to work--today we’re adding a few more shares to one of our positions and adding a full-sized stake in a new name.

Elsewhere tonight, we write about another bullish long-term market indicator, what the recent action in interest rates mean, and go over many leading and potential leading stocks that are enjoying the market’s newfound uptrend.

Our national high-interest-rate nightmare is over, as the Fed has (finally) started slashing short-term rates in a big way, cutting by 50 basis points last week. The market likes the aggression, sending two of the three major indexes to new all-time highs. Is it the beginning of a new – and more egalitarian – leg of the bull market? Could be. Regardless, let’s strike while the iron is hot, adding shares of the leading company in one of the hottest new U.S. markets: sports betting. It’s a recent recommendation from Mike Cintolo in his Cabot Top Ten Trader advisory.

Details inside.

Mergers and acquisitions (M&A) have been gaining steam since 2024, and 2026 looks poised to continue the trend... especially in these four sectors.

Lost in the frenzy surrounding all things AI are companies that fall under the “boring but important” category. This includes producers of everyday things we often take for granted but which are nonetheless crucial for the smooth functioning of countless segments of the economy. To be fair, these otherwise “boring” industries quite often provide investors with outsized opportunities for profit due to their under-the-radar nature.

Food distribution is big business. But food distribution stocks were hit hard during the pandemic. These three look poised for a turnaround.

There remain some yellow flags in the market, but when you look at the big picture, there remains far more good than bad. It’s vital to remain flexible of course, as in 2020, things have changed on a dime a couple of times, but with most of the evidence still positive, we remain mostly bullish.

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T. Baltimore, Boca Raton, Florida

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S. Goodman, Spokane, Washington

The market has been just great! The S&P 500 was up 5.7% in November and now has a 26.47% year-to-date return. This adds to the 26% market return last year.

Stocks were riding high, and the election provided a further boost as investors expect a higher level of economic growth going forward. The cyclical stocks have led the recent charge. The best-performing market sectors since the election are finance, consumer discretionary, and energy.

Growth stocks, led by the Magnificent Seven, have again carried the market this year.

The Mag. 7 – the clever name for big-tech behemoths Amazon (AMZN), Apple (AAPL), Google (GOOG), Meta (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA) – are up an average of 22% this year. Because those seven companies account for more than a third of the entire S&P 500, they’ve carried the index to a solid 16.5% gain year to date. The Equal Weight S&P 500 index, which equally weighs each of the 500 stocks that comprise the benchmark index, is up a mere 8.5% and has barely budged since the Fourth of July. For most stocks, the entirety of this year’s rally occurred during the post-Liberation Day run-up from the second half of April through early July.

Tyler Laundon, Chief Analyst of Cabot Small-Cap Stocks and Cabot Early Opportunities speaks about Software Stocks.

Among the topics he covers:
* A look at current software stock valuations
* Software in context: Trends over the last 25 years
* Software today: More options than ever
* Software stock opportunities for 2021

While the financial news obsesses over what the Fed might have vaguely implied in the latest statement, the world is morphing into a different place. The demographic of humanity is rapidly transforming in a way that will massively affect the flow of money for the rest of our lives. The world is currently undergoing a technological revolution that is transforming society and everyday life.

The aging population and the technological revolution are megatrends that will dominate the investment landscape for years to come regardless of what the Fed does, or GDP in the next few quarters, or whoever gets elected president. It’s not an accident that the best performing stocks in the Cabot Dividend Investor portfolio are in healthcare and technology. Nor will it be an accident that these same stocks continue to dominate from this point forward.

In this issue, I highlight the massive opportunity to position yourself in front of a tsunami that could provide the best investments of your lifetime.

One of Japan’s greatest investors has now set his sights on India. Here are two Indian growth stocks that may have captured his attention.

Current Market Outlook


Coming into last week, the market was at a key juncture, with many indexes testing their key 50-day lines and even the Nasdaq testing its 25-day line, which has contained its post-bottom advance. Happily, those tests were passed, and now we see the Nasdaq at new highs and other indexes getting some daylight above their 50-day lines. Of course, there are still a few issues out there, as the environment remains relatively bifurcated and there are few stocks at great entry points after 15-plus weeks on the upside; sentiment is also getting a touch euphoric. Thus, you should continue to keep your feet on the ground and not pile into stuff sticking straight up in the air, but you should also respect the primary, bullish evidence and stick to a heavily invested stance.

This week’s list has a bit of a secondary feel to it, though all the names have enticing stories and charts. For our Top Pick, we’re going with Ultragenyx (RARE), one of many biotech stocks that’s showing renewed strength.

Stock Name	Price	Buy Range	Loss Limit
Alarm.com (ALRM)	71.33	64-67	57-58.5
Biohaven Pharmaceutical Holding (BHVN)	75.71	68-72	60-62.5
Chegg (CHGG)	74.21	68-71.5	60-62
Cloudflare (NET)	39.32	35-37.5	30.5-32
Nu Skin Enterprises Inc. (NUS)	46.07	42.5-45	37.5-39
Thor Industries (THO)	104.76	98.5-102.5	89-91
Trade Desk (TTD)	468.02	415-435	365-380
Ultragenyx Pharmaceutical Inc. (RARE)	87.63	83-88	72-75
Upwork (UPWK)	15.93	13-14	11.5-12
Zscaler (ZS)	126.22	108-113	95-98

After a sharp correction in early April, the market posted a nice, but not powerful, rebound for four weeks but the past two weeks have definitely hurt the near-term evidence, whether you look at the overall market or leading stocks, where some abnormal action has appeared. There’s still more positive evidence than not, but at this point it’s very much a mixed bag, with some stocks acting fine, some coming under the gun and lots of up-and-down action. We’ll leave our Market Monitor at a level 7, but it’s vital to be in the right names and sectors.

This week’s list has many resilient names, including a few that have been out of the spotlight for a while. Our Top Pick is a small medical device outfit that, thanks to a good-sized acquisition of late, looks like a major player in the spinal surgery area, with new products and technology selling well.

The selling pressures of the past two weeks continued last week as traders grappled with tariff concerns, a possibly slowing economy, and growth stocks again falling dramatically. By week’s end the S&P 500 had lost 3.1%, the Dow had fallen 2.4%, and the Nasdaq had dropped another 3.5%. The selling only worsened on Monday, with all three indexes down more than 2%.