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Current Market Outlook


The major indexes actually made decent gains last week, though that came on the heels of a major breakdown the week before. In the short-term, last week’s show of support was encouraging; it could be the start of a multi-week bottoming process following the extreme selling pressure. If you want to trade stocks, taking small positions on dips could be worthwhile. However, remember that the bigger picture remains bearish—the major trends of the indexes are clearly down and most stocks have a ton of overhead supply to deal with. Thus, you should remain overall defensive, holding lots of cash and focusing more on building a watch list than trying to make a bunch of money here.

This week’s list has some steady growth stories as well as a few earnings winners from last week. Our Top Pick is Dycom (DY), a leading provider of construction services to the telecom industry, which is dramatically expanding its bandwidth. It’s not a long-term growth story but should be in great shape for at least another few quarters.

Stock Name	Price	Buy Range	Loss Limit
Vantiv (VNTV)	0.00	43-45	40-41
Under Armour (UA)	0.00	95-97	89-90
Tyler Technologies (TYL)	0.00	135-138	116-120
TransDigm (TDG)	599.41	224-232	213-215
Sarepta Therapeutics (SRPT)	120.93	35-36.5	30-31
Incyte Corporation (INCY)	76.98	116-120	96-100
Flotek (FTK)	0.00	18-19	16-17
Express (EXPR)	0.00	19-20	17.5-18
Dycom Industries (DY)	0.00	65-68	59-60
Buffalo Wild Wings (BWLD)	0.00	188-194	179-180

Current Market Outlook


The market remains very volatile, reacting to the news of the day (Greece, in particular, seems to be pushing and pulling the market on a daily basis), and most indexes are still trapped within trading ranges. However, stepping away from the headlines reveals increasing bullish evidence—growth stocks have been acting well for a few weeks and the Nasdaq has punched out to multi-year highs, yet investor sentiment remains apathetic. It’s not time to jump in with both feet (selectivity on the buy side and taking partial profits on the way up still makes sense), but we’re nudging our Market Monitor up another notch in reaction to the market’s action.

This weeks’ list has a good mix of names from a variety of industries. Our Top Pick is Ciena (CIEN), which has a history of big pops and drops, and started a fresh uptrend during the past few weeks.

Stock Name	Price	Buy Range	Loss Limit
Youku Tudou (YOKU)	0.00	26.5-28	24-25.5
Intrexon (XON)	0.00	48-50	43.5-44
Bank of the Ozarks (OZRK)	0.00	46-47.5	41.5-42.5
Outerwall Inc, (OUTR)	0.00	80-82	73-74
Lions Gate Entertainment Corp. (LGF)	0.00	35.5-37	32.5-33
Insys Therapeutics (INSY)	0.00	37.5-39.5	33-34
HD Supply Holdings, Inc. (HDS)	0.00	34-35.5	32-32.5
Salesforce.com (CRM)	0.00	74-77	69-70
Cheetah Mobile (CMCM)	0.00	32-34	29-30
Ciena (CIEN)	44.25	24.5-26	22.5-23

Current Market Outlook


The market has been shaking and baking during the past three weeks on lots of headline (mainly currency-related) news, but while there has been some damage, the major indexes are holding key support and relatively few stocks have fallen apart. Of course the evidence can change at any time, and if the market really breaks down, we’ll turn cautious. But, despite the whippy day-to-day action, we’re sticking to our bullish stance, and believe holding your best performers, and even doing a little buying at opportune times, will prove fruitful.

This week’s list is once again heavy on the medical and retail sectors, though there are a few other tempting ideas out there, too. Our Top Pick is Urban Outfitters (URBN), which has come back to life after a long period out of the limelight.

Stock Name	Price	Buy Range	Loss Limit
WisdomTree (WETF)	0.00	20-21	18-19
Vulcan Materials Company (VMC)	137.10	80-83	75.5-76
United Therapeutics (UTHR)	0.00	164-168	158-160
Urban Outfitters (URBN)	0.00	43.5-45	38-39
SunEdison (SUNE)	0.00	22.5-24	20.5-21
IPG Photonics (IPGP)	0.00	96-99	87-89
Horizon Therapeutics (HZNP)	49.89	21-23	19-19.5
GrubHub (GRUB)	140.03	42-44	39-39.5
Foot Locker (FL)	0.00	59-62	56.5-57
American Eagle (AEO)	0.00	16.5-17.5	15-15.5

It’s election week, and it will be the elephant in the room for investors until a winner is declared. Will that be before the market opens on Wednesday, as in 2016? Will it take until this weekend, like it did in 2020? Or could this toss-up election drag out even longer, a la Bush/Gore in 2000? Either of the two former scenarios probably wouldn’t impact the market much. The latter would, at least for a time. So let’s all hope for a quick result. Sprinkle in the latest round of Fed cuts later in the week, plus more than a handful of earnings reports for Stock of the Week stocks, and it’s an incredibly pivotal week for the market.

With so much up in the air, today we add a relatively “safe” large-cap stock with a decent yield, low beta and impressive earnings growth. It’s been a staple of Tom Hutchinson’s Cabot Dividend Investor portfolio for quite some time.

Details inside.

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As always, there should be something for everyone!

We started to see the market shake and bake a bit last week, which isn’t unusual considering the heady run the indexes and dozens of growth stocks have had since the late-June low. Exactly what happens next is anyone’s guess; our feeling is simply that the next month will probably be more difficult than the last month, so you should expect a few potholes or sudden selloffs. But with the main trend still pointed up, we think higher prices are likely in the weeks and months ahead. Thus, while plunging into a bunch of stocks right now probably isn’t the best idea, we do think you should work to remain (or work toward becoming) heavily invested.

This week’s list has some old friends and a couple of new faces. There’s lots of strength to choose from, but our favorite is Michael Kors (KORS) a fashion house with ambitious growth plans.

Stock Name	Price	Buy Range	Loss Limit
Under Armour (UA)	0.00	69.5-71.5	64-65
Ocwen Financial (OCN)	0.00	49.5-52	45.5-46.5
LKQ Corp. (LKQ)	0.00	28.5-30.5	25-27
Michael Kors Holdings Limited (KORS)	73.22	69-72	63.5-64.5
Jazz Pharmaceuticals (JAZZ)	0.00	77-80	74-75
Harman International Industries, Inc. (HAR)	0.00	66-69	59-60
Facebook, Inc. (FB)	0.00	37.5-39.5	32-33
Cubist Pharmaceuticals (CBST)	0.00	59-62	52-54
Baidu (BIDU)	0.00	130-136	118-120
Activision Blizzard, Inc. (ATVI)	0.00	17-18	15.5-16

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