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Current Market Outlook


We think last week’s action could prove to be a turning point for the market, not just in the short-term (recovering from a four-plus week retreat) but longer-term, too (as some indexes attack key resistance levels). There are still flies in the ointment (we’d like to see more stocks hitting new highs), so we’re not fully bullish, but the combination of a healthy broad market, the intermediate- and longer-term trends of the market pointing sideways-to-up, and pervasive negative sentiment (nobody believes the market will rise significantly going forward), all bode well going forward. After a trip into neutral territory, we’re bullish again, though we’re still holding some cash in reserve as we wait for more individual stocks to kick into gear.

This week’s list has many great looking charts combined with solid growth stories. Our Top Pick is more aggressive than we’ve had in recent weeks—Veeva Systems (VEEV) has a great growth story and it catapulted higher on earnings, marking what could be a coming out party for the stock. Keep new positions small to start.

Stock Name	Price	Buy Range	Loss Limit
Veeva Systems (VEEV)	180.23	31.5-33	28-29
ONEOK (OKS)	0.00	37.5-38.5	33.5-34
Universal Display (OLED)	187.54	64-66	57-59
Masimo (MASI)	159.56	48-49.5	44-45
Jack in the Box (JACK)	0.00	81-84	74-76
Dycom Industries (DY)	0.00	80-83	71-73
Dollar Tree (DLTR)	0.00	86-88.5	80-81
Copart (CPRT)	74.80	46-48	42-43
Boston Scientific (BSX)	0.00	21.5-22.5	20-20.5
Abiomed (ABMD)	0.00	98-101	91-93

Current Market Outlook


The market rally continued last week, with the major indexes pushing back toward (and in some cases, above) their multi-week highs. That was enough to turn the intermediate-term trend back up, causing us to flip our Market Monitor back into neutral territory, so you can begin to loosen the purse strings a bit, buying some new positions and looking to add more should you develop profits in the days ahead. That said, there are still a few flies in the ointment; the longer-term trend remains down and most of the big movers have been the worst performers of the past few months. That’s not bearish, but we would like to see real leadership emerge to new highs before we get more bullish.

This week’s list has some newer names, including a few off-the-bottom stocks from beaten-down sectors. For our Top Pick, we’ll take a stab at one of those—Matador Resources (MTDR) resisted the energy plunge well in recent months and is already back toward new high ground. If the energy run continues, it should do very well.

Stock Name	Price	Buy Range	Loss Limit
Zillow Group (ZG)	0.00	32-34	29-30
Cimarex Energy (XEC)	0.00	118-122	107-108
Paycom Software (PAYC)	0.00	39-41	36-37
NVIDIA Corporation (NVDA)	242.42	25-26	22-23
Netflix, Inc. (NFLX)	423.92	108-115	97-98
Matador Resources Company (MTDR)	27.89	25-27	22-23
JinkoSolar Holding (JKS)	0.00	24-26	22-23
Hawaiian Holdings Inc. (HA)	0.00	26-28	23-24.5
Global Payments Inc. (GPN)	0.00	130-133	115-117
EPAM Systems (EPAM)	188.24	79-81	70-72

Current Market Outlook


Since our last issue, the market has rebounded nicely from its sharp one-week pullback in early November, which is obviously good to see. However, not that much has changed from a big picture point of view—the major indexes are in decent shape (the trends remain up), but the advance remains narrow, with a few dozen stocks doing well but many stocks and sectors simply chopping around or trending down. Bottom line, we’ll keep our Market Monitor where it is and stick to our game plan: you should hold your best performers (though taking some partial profits on the way up makes sense), but also hold some cash and be very selective on the buy side.

What’s encouraging is that our screens are finding more and more good growth stories, which is what we see this week. Our Top Pick is a big-cap stock that’s gathering strength as it transitions to the cloud—Autodesk (ADSK) leads its field, but the stock has come alive as big investors anticipate huge recurring revenue ahead.

Stock Name	Price	Buy Range	Loss Limit
Stamps.com (STMP)	0.00	98-103	88-89
PBF Energy (PBF)	38.93	38.5-40.5	36-36.5
Universal Display (OLED)	187.54	49-52	45-46
Monster Beverage Corporation (MNST)	0.00	150-155	139-140
Heartland Payment (HPY)	0.00	76-79	71-72
Home Depot (HD)	0.00	130-133	123-124
Hawaiian Holdings Inc. (HA)	0.00	35-37	31.5-32
General Motors Company (GM)	0.00	35-36.5	32-33
Ctrip.com International Ltd. (CTRP)	34.94	98-104	89-90
Autodesk (ADSK)	229.00	60-63	55.5-56.5

Current Market Outlook


On an intermediate-term basis, the overall market remains stuck in the middle—many areas are still looking ragged, and most major indexes are hanging around their 50-day moving averages. Our screens this weekend did reveal a number of solid five- to six-week setups among growth stocks, as well as lots of solid action in other areas that have recently come to life. If the market gets going from here, there should be plenty of stocks to jump on. We’re not opposed to buying small amounts of a couple of these potential leaders today, but until we see more than just a day or two of rallying, you should play things carefully. We have our Market Monitor at a level 6 (out of 10), and will simply let the market tell us (through its own action) whether the next big move is up or down.

In the meantime, we’re laser-focused on stocks that have either just blasted out of bases or uptrending stocks that have resisted the Nasdaq’s wobbles since early June. Our Top Pick is Medidata Solutions (MDSO), which remains in good shape after lifting from a two-year base in April. Keep positions small.

Stock Name	Price	Buy Range	Loss Limit
Alibaba (BABA)	254.81	138-144	125-130
Align Technology (ALGN)	316.20	145-150	135-137
American Airlines Group Inc. (AAL)	0.00	51-53	46-47.5
Exact Sciences (EXAS)	116.91	35-37	31.5-32.5
First Republic Bank (FRC)	0.00	100.5-103.5	96-96.5
Medidata Solutions (MDSO)	0.00	77-80	71-72
Puma Biotech (PBYI)	0.00	82.5-87	74-76
RingCentral (RNG)	238.73	35.5-37.5	33-34
Tesoro (TSO)	0.00	92-95	87-88
WellCare Health Plans, Inc. (WCG)	271.83	177-181	166-168

Current Market Outlook


Ever since the mini-blowoff we saw in growth stocks in mid June, the market has been choppy, narrow and tough to maneuver, with many individual stocks going nowhere and a handful of leaders flashing abnormal intermediate-term action. But the character of the market seems to have changed during the past couple of weeks—the day-to-day rotation is gone, leading growth stocks have generally resumed their advances and the major indexes have moved to new highs. It’s still not 1999 out there, of course, and a big factor will be how the market reacts once big investors return from the beach next week. But there’s no question the evidence continues to improve, so we’re bumping up our Market Monitor to a level 8 (out of 10).

This week’s list has a bunch of good setups and great breakouts from growth-oriented stocks. Our Top Pick is Pure Storage (PSTG), which looks like it has recovered from the choppy action of the past few quarters.

Stock Name	Price	Buy Range	Loss Limit
Autodesk (ADSK)	229.00	150-155	137-140
DocuSign (DOCU)	107.98	63-66	55-57
Horizon Therapeutics (HZNP)	49.89	19.5-20.5	17.5-18.5
Nordstrom Inc (JWN)	60.72	58-61	53.5-55.5
Novocure (NVCR)	0.00	38-40	33-34
PetIQ (PETQ)	30.82	35.5-38	30-31.5
Pure Storage (PSTG)	25.64	25-26.5	22.5-23.5
SailPoint Technologies (SAIL)	31.60	29-31	26.5-27.5
Splunk (SPLK)	207.67	117-122	105-108
Williams-Sonoma (WSM)	64.96	66-69	61-62.5

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Current Market Outlook


Usually when the market is stretched and sentiment is complacent, the market latches onto a reason to retreat, and last week provided it, with the Middle East conflict offering an excuse for sellers to get active and buyers to pull in. The good news is, thus far, the retreat has been reasonable—the major indexes are still even above their 25-day lines, and few stocks have cracked key support or flashed any abnormal action. That said, we’re leaning toward the view that, Iran or not, the short-term is likely to remain tricky, with rotation, potholes and news-driven moves likely to be the norm for a while. Thus, we remain bullish, but continue to advise picking your spots—many stocks have etched nice month-long rest periods, though some others probably need time to consolidate.

This week’s list has a bunch of names that haven’t appeared in Top Ten for a long time (if ever). Our Top Pick is Alibaba (BABA), which has finally kicked back into gear after a long time in the wilderness. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Alibaba (BABA)	254.81	208-216	192-196
Bilibili (BILI)	28.71	20.5-22	18.5-19.5
Coupa Software (COUP)	262.20	157.5-162.5	143-146
Eldorado Resorts (ERI)	0.00	56-58	51-52
Global Blood Therapeutics (GBT)	0.00	76.5-80	66.5-68.5
Lumentum (LITE)	87.00	76-79	69.5-71
SolarEdge Technologies Inc. (SEDG)	124.37	95-97.5	86-87.5
Tenet Healthcare (THC)	0.00	35.5-37	32.5-33.5
WPX Energy (WPX)	0.00	13.2-13.7	11.7-12.0
Scorpio Tankers (STNG)	0.00	37.5-39	33.5-34.5

Current Market Outlook


The major indexes boomed again today, with three of the five we track (S&P 500, Nasdaq and NYSE Composite) all notching all-time highs. We would point out that today’s move came on obvious news (likelihood of corporate tax cuts), and that sentiment is getting hot and heavy, which increases the risk of a market pullback or a generally trickier environment (rotation, choppy trading, etc.). Thus, you want to keep your feet on the ground and be sure you’re looking for decent entry points and honoring your stops. But there’s no question the majority of evidence remains solidly positive, and until that changes, you should remain in a bullish frame of mind.

Not surprisingly, this week’s list has many strong charts in a bunch of different industries. Our Top Pick is Urban Outfitters (URBN), a solid turnaround situation in a newly leading sector. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Canada Goose Holdings (GOOS)	46.21	26-27.5	23.5-24.5
CF Industries (CF)	45.23	39-40.5	36-37
Cree, Inc. (CREE)	67.96	38-40	34.5-36
KB Home (KBH)	36.05	30-31.5	27.5-28.5
Lululemon Athletica (LULU)	304.69	72.5-75	66.5-68.5
MercadoLibre, Inc. (MELI)	980.83	312-322	285-290
PRA Health Sciences Inc. (PRAH)	96.08	87.5-90	82-84
Sage Therapeutics (SAGE)	0.00	155-165	125-132
SVB Financial Group (SIVB)	0.00	228-235	208-213
Urban Outfitters (URBN)	0.00	32-34	28-29

The market didn’t get the bump from another Fed rate cut that some may have anticipated, though it’s possible the run-up was already baked in after the cut was deemed all but a foregone conclusion starting late last month. Still, stocks are hovering near record highs, and broader measures like small caps and the equal-weight index are catching up to the major indexes. Improving breadth means it’s a good time to add a dividend-paying energy stock, courtesy of Cabot Dividend Investor Chief Analyst Tom Hutchinson. It’s a stock that’s picked up a full head of steam since bottoming in mid-August.

Details inside.

Pay attention to what the market does, not the news of the day.

Current Market Outlook


After a straight-up move in February, the market has hit some rough waters, with the major indexes and lots of growth stocks taking hits. There’s always the chance that the market is beginning a major correction after a strong but relatively brief (in this case, four weeks) advance, but we like to go with the evidence. So far, all of the indexes are holding above their 50-day lines, and very few stocks have shown any abnormal selling. Thus, while we’re not fully invested, we are sticking with a bullish outlook and believe holding your best performers, and even buying a little on this dip, makes sense.

This week’s list is again heavy on the chip and medical (mainly biotech) sectors, with a smattering of retail. Our Top Pick is Biogen (BIIB), a blue-chip leader of the biotech group. The stock lifted out of a 10-month base in January and has acted well since, and it’s now approaching a solid entry point after pulling back.

Stock Name	Price	Buy Range	Loss Limit
WhiteWave Foods (WWAV)	0.00	39.5-41	37-38
Tesoro (TSO)	0.00	86-89	80-81
Skyworks Solutions (SWKS)	0.00	90-92	80-82
NXP Semiconductors (NXPI)	0.00	95-100	87-89
Mallinckrodt (MNK)	0.00	117-121	108-110
Jack in the Box (JACK)	0.00	92-95	87-88
HDFC Bank Limited (HDB)	0.00	59-61	56-57
Centene (CNC)	0.00	61-62.5	57-58
Burlington Stores (BURL)	193.95	54-56	50-51
Biogen (BIIB)	0.00	405-415	370-380

Current Market Outlook


The Nasdaq poked above the 5,000 level for the third time in six weeks today, and most other indexes aren’t far behind. To us, what’s distinctive about the recent upmove is a complete lack of selling—very few stocks are hitting new lows, and even bad news has failed to attract the bears. Now, to be fair, buyers aren’t exactly flexing their muscle, either; not many stocks are hitting new highs and volume’s been generally light. Overall, we’re going to keep our Market Monitor where it is because the sideways trend of the market is still intact, but we do think there’s a good chance the third time could be the charm as the Nasdaq tests new high ground.

This week’s list has a bunch of good prospects, including some from unexpected areas (energy and yieldcos!). But our Top Pick is Valeant Pharmaceuticals (VRX), a steady grower in the drug field that should see earnings accelerate thanks to its recent acquisition of Salix.

Stock Name	Price	Buy Range	Loss Limit
Valeant Pharmaceuticals (VRX)	0.00	200-210	188-190
Terraform Power (TERP)	0.00	38-40	35-35.5
Sabre Corp. (SABR)	0.00	24.5-25.5	22-22.5
PDC Energy (PDCE)	0.00	53-55	49-50
Orbital ATK (OA)	0.00	74-76	67-69
JD.com (JD)	39.58	33-34.5	30-31
Intercept Pharmaceuticals (ICPT)	0.00	270-285	245-250
Harman International Industries, Inc. (HAR)	0.00	134-139	124-126
Canadian Solar (CSIQ)	0.00	34-36	30.5-31
Autohome (ATHM)	98.65	46.5-49.5	42-43

Current Market Outlook


It’s not perfect, but from a top-down perspective, the market remains in good shape—today’s stretch toward new highs for many indexes (the S&P 500 made it, though most others didn’t) keeps the intermediate- and longer-term trends pointed up. That said, under the surface, things are a bit disjointed, with selling on strength seen in some extended growth leaders and buying picking up in names that are either cyclical (oils, financials) or fresher (those that haven’t had huge runs). That doesn’t mean you should chase every stock and sector that’s moving and ditch those that are wobbling, but it is important to avoid complacency with your winners (honor stops and take partial profits when offered) and, on the buy side, focus on stocks showing outstanding accumulation in recent weeks.
Those are just the type of charts we’re honing in on these days, and this week’s list has another batch of (mostly) newer names showing excellent action. Our Top Pick is Anaplan (PLAN), which looks like a new leader in the software space.

Stock Name	Price	Buy Range	Loss Limit
AGCO Corporation (AGCO)	76.24	75.5-78	69-70.5
Anaplan (PLAN)	47.52	47.5-50.5	42-43.5
eHealth (EHTH)	122.74	80-84	71-73
Inphi (IPHI)	120.16	51.5-53.5	46-47.5
Kratos Defense (KTOS)	24.08	21-23	18.8-19.8
Novocure (NVCR)	0.00	58-61	51.5-53.5
Roku, Inc. (ROKU)	150.46	88-92.5	77-80
Shake Shack (SHAK)	92.08	66-68	61-62
Smartsheet (SMAR)	44.12	47-49.5	42-43.5
Snap Inc. (SNAP)	16.68	13.7-14.7	12.2-12.6

Current Market Outlook


We have a few main thoughts when it comes to the market. First, of course, the intermediate-term trend remains up, and most stocks are acting well, thus we continue to advise a bullish stance. Second, though, divergent action is still in evidence, with small caps and growth stocks racing up the charts, while many sectors and indexes (the NYSE Composite is down 1% this year!) are stuck in the mud. And third, we’ve seen a bit of froth emerge, with some IPOs and other growth names going vertical, whether it’s on news or not. Like we said, we remain bullish—it’s hard not to be when the leading indexes (Nasdaq, S&P 600 SmallCap) and stocks are acting well. That said, given some of the froth we see out there, be sure to keep your feet on the ground, looking for decent entry points and taking some partial profits on the way up.

This week’s list is chock-full of rapidly growing companies with super-strong charts. Our Top Pick is Nutanix (NTNX), which blasted off in March and, after months of up-and-down action, looks to be resuming its uptrend here.

Stock Name	Price	Buy Range	Loss Limit
Canada Goose Holdings (GOOS)	46.21	60-64	53-56
Dropbox (DBX)	31.80	39-41	33-34
Etsy (ETSY)	112.97	40-43	35-36.5
Exact Sciences (EXAS)	116.91	65-69	58-61
HealthEquity, Inc. (HQY)	70.70	77-80	70-72
HubSpot (HUBS)	582.89	135-140	123-126
Inogen (INGN)	210.84	182-189	165-170
Nutanix (NTNX)	55.91	61-64	54.5-56.5
RH Inc. (RH)	252.93	148-156	123-130
Twilio (TWLO)	183.39	57-60	50-52

The Dow is in a tailspin.

After Wednesday’s Fed-ignited selloff, the 118-year-old index has now fallen for 10 consecutive days – its longest string of down days since 1974. Prior to yesterday, the index hadn’t fallen much during the first nine days of this losing streak, down just 3.47%; but yesterday’s 2.58% decline stretched those losses to an even 6%. So what once was a modest pullback is now hurtling toward a correction.

In the November Issue of Cabot Early Opportunities, I take a quick look at some recent earnings reports and continue to spread things out among different industries with our new additions.

This month I cover a premium furniture retailer, a micro-cap biotech, an online finance specialist, an oil refiner and a somewhat speculative space economy stock. There should be something in this Issue for everybody.

Current Market Outlook


From a top-down perspective, nothing has really changed with the key evidence; there remain a couple of divergences (number of new highs, lagging small-cap indexes), but the intermediate-term trends of the major indexes and most leading stocks (and even non-leading stocks) are pointed up. Under the surface, though, we’re seeing some ping pong action—the major indexes have been alternating up and down days for the past couple of weeks, while many sectors are whipping in and out of favor on a weekly basis. (Growth stocks have been alternating good and bad weeks for a month.) What does it mean? It’s fair to say the broad buying pressures have eased up, though to this point, the sellers haven’t done much damage at all. We’re going along with the back-and-forth action, nudging our Market Monitor down a notch—we remain overall bullish, but the current earnings season will have a lot to say about the intermediate-term outlook for the market and leading stocks.

In the meantime, we’re still seeing a good number of setups from a wide variety of stocks and sectors. We have a couple of favorites this week, but for our Top Pick we’ll go with Qualcomm (QCOM), which has shown extreme power after a game-changing deal with Apple last week. We’re OK buying here or (preferably) on dips.

Stock Name	Price	Buy Range	Loss Limit
Ctrip.com International Ltd. (CTRP)	34.94	42.5-44.5	39-40.5
D. R. Horton (DHI)	66.55	43-45.5	39.5-41.5
Fastenal (FAST)	37.08	67.5-69.5	62.5-64
First Solar (FSLR)	83.74	57-59	52.5-54
Five Below (FIVE)	134.58	136-142	124-127
Kansas City Southern (KSU)	176.54	121-124	112-113.5
ManpowerGroup (MAN)	90.84	93.5-95.5	84.5-86
Microchip Technology (MCHP)	79.12	95-97	88-89
QUALCOMM Incorporated (QCOM)	106.36	78-82	69-71
Redfin (RDFN)	40.40	21-22	19-19.5

We’re seeing lots of crosscurrents in the market right now, especially when it comes to the evidence -- the big-cap indexes are in good shape and we’ve seen a few more breakouts from growth stocks ... but the broad market is very iffy and most other indexes are stuck in the mud. We think it’s best to go with the flow--ditching stocks that break down but selectively adding stronger, fresher names, all while holding some cash for future buying power (if more breakouts come during earnings season) and for cushion (if the market weakens again). We’ve had a few changes in the past two weeks (including some in our special bulletin today), and we go over all the details in tonight’s issue.