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Today, I’m adding the world’s largest publicly traded uranium company Cameco (CCJ), which has held up spectacularly throughout this market meltdown. Though of note, this stock is volatile and we are going to play it super defensively, with an in-the-money call.

The situation remains the same as it has for the past week or so. When it comes to selling pressures, we’re seeing some signs that they’re starting to ease, but, on the buying side, there isn’t much evidence to suggest the bulls are flexing their muscles, as most indexes, sectors and growth funds are still in downtrends while rallies into resistance (whether for an index or stock) almost always attracts quick selling. Yes, there are still many old world stocks that are acting well (though we’ll see how today’s commodity-related selloff goes), so we’re not opposed to nibbling on these sorts of pullbacks. But overall, we think watchful waiting is the right course.



This week’s list is intriguing as there are a good number of fresh breakouts here, some from very long ranges. Our Top Pick is one of those, with the company’s massive step-up in earnings last year expected to persist for at least the next couple of years.

Today, I’m adding an American petroleum contract drilling company, Helmerich & Payne, Inc. (HP).

For the past several weeks, we have bought oils and commodity stocks. Today, I’m going to diversify our portfolio a bit, adding American semiconductor supplier, Onsemi (ON).

The overall market may have a challenging year as it grapples with inflation and uncertainty about the Fed tightening.
While most companies struggle, energy and financial stocks actually thrive with inflation and rising interest rates. But there are also lesser-known areas that are also benefitting from this current bend in the road.


In this issue, I highlight a company from the shipping sector. The industry had struggled for the last decade. But the current environment is much more hospitable. Shipping rates have soared in the pandemic recovery. And these rates are likely to stay high in one particular area, container shipping.

Overall, nothing has changed yet with the major evidence out there, but we continue to think a bottom-building process is playing out in decent fashion so far: Last week, the major indexes sank below their January lows on news of the Russian invasion, but then rallied hugely to close the week all while showing small positive divergences in the broad market (fewer stocks hitting new lows on the Nasdaq, fewer below their 200-day lines, etc.). Moreover, there’s little doubt that sentiment is getting pretty bearish, and believe it or not the intermediate-term trend of growth funds actually isn’t far from a green light. Thus, there are some positives as it attempts to etch a low area to this three-plus-month downturn, so we’re nudging up our Market Monitor, but we need to see the market build on these baby steps before thinking the downtrend may be over.



This week’s list is very heavy on the commodity complex, as that’s clearly where the big money has been flowing. Our Top Pick is a natural gas-heavy play with as good a cash flow story as there is.

This week, as we continue to keep the portfolio diversified, we are adding a biotech/pharma play that recently reported strong earnings.

Despite some optimism early last week, the sellers obliterated that hope Wednesday through Friday, as the indexes fell sharply, pushing the S&P 500 into an official bear market (down 20% from its highs).

This week we are adding a covered call in yet another earnings season winner that has emerged amidst the rubble of the retail sector.

As Mike Cintolo, Chief Analyst of Cabot Growth Investor and Cabot Top Ten Trader always says, “you shouldn’t fight the tape.” The markets are battling it out these days, trying to find a bottom. The constant news cycle of Russia-Ukraine, rising rates (up 0.5% last week) and increasing inflation are causing a severe case of market indigestion and volatility.



What’s an investor to do? As I’ve been saying for the past 6 or so months, judicious investing is the key. While most sectors (except Energy and Utilities) and the majority of equities, are down for 2022, there are still pockets of ideas worth investigating, including some defensive moves.



With that being said, I think investors should be keeping some cash on the sidelines, as when this market shows signs of a long-term turn, there will be plentiful bargains to be had.

Current Market Outlook


After a vacuum of selling pressures helped the S&P 500 and Nasdaq soar to new highs, last week’s generally tight, calm action was just what you want to see—despite the run, investors aren’t booking profits and the bears aren’t coming out of the woodwork. That’s not to say there won’t be pullbacks (possibly brief, sharp dips) or that every investor is rowing in the same direction—some groups are lagging and many major indexes are still shy of their September peaks. Thus, you shouldn’t buy with both fists, but there’s clearly enough evidence to be bullish and look to latch onto new leading stocks as they emerge.

This week’s list is chock-full of stocks with big stories and powerful charts. There are many we like, but for our Top Pick we’ll go with Medivation (MDVN), a well-traded (but little-known) biotech firm that has a blockbuster treatment for prostate cancer on its hands.

Stock Name	Price	Buy Range	Loss Limit
Wabtec (WAB)	0.00	86-89	81-82
Ulta Beauty (ULTA)	331.95	119-123	110-111
Textron (TXT)	0.00	40.5-41.5	37.5-38.5
Spirit Airlines (SAVE)	57.03	73.5-77	68-69
Receptos (RCPT)	0.00	103-108	88-90
MercadoLibre, Inc. (MELI)	980.83	128-135	122-124
Medivation (MDVN)	0.00	106-111	96-98
Marriott International, Inc. (MAR)	0.00	73-75	68-70
Alibaba (BABA)	254.81	112-116	102-105
Allison Transmission (ALSN)	51.79	31.5-33.5	29.5-30

Current Market Outlook


The market remains all over the place, with nearly every day bringing another 1%-plus move in the major indexes; such wide-and-loose action isn’t usually a good thing after a big market advance. That said, our outlook isn’t negative here (we’re still more bullish than bearish), and we continue to see more and more stocks set-up to get going … if the bulls can create a real, sustained uptrend. For now, though, it’s best to hold your top performers, do a little buying (preferably on weakness) and hold some cash as we wait for the market to show its true colors.

This week’s list is encouraging, as we’re not having any trouble spotting stocks that have consolidated tightly or recently popped to new highs on good volume. Our Top Pick is the first big-cap growth stock to surge above resistance this week—Chipotle Mexican Grill (CMG), which remains a great cookie-cutter story.

Stock Name	Price	Buy Range	Loss Limit
Valeant Pharmaceuticals (VRX)	0.00	149-154	137-139
Rackspace (RAX)	0.00	45-48	42-43
Rackspace (RAX)	0.00	45-48	42-43
Lululemon Athletica (LULU)	304.69	60-62	54-55
Leggett & Platt, Incorporated (LEG)	49.79	42-44	39-40
D. R. Horton (DHI)	66.55	25.5-26.5	23.5-24
Chipotle Mexican Grill (CMG)	773.32	695-720	650-655
CF Industries (CF)	45.23	285-295	265-268
Brunswick Corporation (BC)	0.00	51-53	47-48
Alkermes (ALKS)	0.00	63-67	56-57
Align Technology Inc. (ALGN)	316.20	60-62	56-57

Current Market Outlook


Officially, the major indexes are still in no-man’s land, gyrating within their two-month ranges. But the action is definitely feeling heavier. While a few stocks have emerged during earnings season (including a few in today’s issue), every market rally of a day or two has led to quick selling pressure; the broad market can’t get its act together and most stocks that poke into new high ground quickly retreat. We’re still not willing to make any bold predictions here—the environment remains more choppy than bearish—but the bottom line is that no money is being made. Thus we are knocking our Market Monitor down a notch (though it’s still in neutral territory) due to the recent deterioration.

The silver lining is that our screens are still picking up on a good number of resilient stocks, including more than a few earnings winners. Our Top Pick this week is Harman International (HAR), which has come to life after a yearlong rest. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Pacira Biosiences (PCRX)	54.85	103-107	95-97
ServiceNow (NOW)	341.86	70-73	65-66
Netflix, Inc. (NFLX)	423.92	420-440	385-390
Lowe’s Companies (LOW)	98.15	66-68	60-62
Harman International Industries, Inc. (HAR)	0.00	126-131	115-116
Freescale Semiconductor (FSL)	0.00	30-32	26.5-27
Blackstone Group (BX)	49.12	35.5-36.5	32-33
Burlington Stores (BURL)	193.95	45-50	44.5-45
Biogen (BIIB)	0.00	378-385	348-352
Boeing (BA)	432.22	141.5-146.5	130-132

The first half of the year is in the books, and it was a doozy, but we’re glad we’ve been able to sidestep a good chunk of the historic damage. Now the focus is on what’s next, and it’s important to respect the evidence today (we’re remaining highly defensive) but also stay flexible; we have seen some relative strength in some growth areas and we’re open to whatever comes. In the near-term, we’d like to put a little of our giant cash hoard (89%!) to work, but want to see the market stabilize a bit more first.

Note: Due to the celebration of Independence Day next week, the next issue will be delivered Tuesday, July 5.
The market rallied strongly last week, erasing some of the carnage of the previous two weeks, but the main trend is still down and thus caution is still advised.


This week’s stock is a growth company that serves the solar power industry, and the stock looks attractive now because it’s basically been treading water for 17 months.


As for the current portfolio, which is 25% in cash, there’s one Sell.


Details in the issue

Tuesday there were some rays of sunlight amidst the storm, but until proven otherwise, we are in a bear market and should proceed with caution. This brings me to this week’s trade, which is a defensive trade on a recent outperformer, that we recently traded successfully