Search

The market’s evidence has worsened of late, with our Cabot Tides flipping to bearish earlier this week, and going along with that is a dearth of stocks hitting new highs. To be fair, it’s not all bad news — we’re seeing fresher leadership hold up relatively well, even during this latest decline, while the longer-term signposts are still positive — but we continue to think a relatively cautious stance is appropriate. Since the last issue, we’ve had a couple sells and three buys (repositioning the portfolio into some more resilient names), but we’re still holding onto about 44% in cash.

In tonight’s issue, we go over all our positions (including the new buys, which we think are battling for pole position for the market’s next advance) and talk about one simple chart tool that can help you spot other potential leaders going forward, too.

Current Market Outlook


A week ago, it looked like the market had finally left behind its up-and-down pattern, but earnings season had other ideas—the major indexes took on some water, and many individual stocks were hit hard after so-so quarterly reports. That said, it’s not the end of the world; most indexes are holding their 50-day lines and there are a bunch of stocks either holding their own, or still within multi-month launching pads. We are respecting last week’s selling by knocking our Market Monitor back down a notch, and we do think it’s best to be very selective when doing new buying. The real key will be the next few days and whether the market can hold important support levels.

In the meantime, we’re impressed that we’re still finding solid growth ideas from a variety of fields. Our Top Pick is Equinix (EQIX), a steadily-growing data center operation whose REIT status offers tax advantages and the prospect of big dividends.

Stock Name	Price	Buy Range	Loss Limit
Valeant Pharmaceuticals (VRX)	0.00	215-220	200-203
Oshkosh (OSK)	95.04	52.5-54.5	47.5-48.5
NetEase, Inc. (NTES)	0.00	124-128	114-116
JetBlue Airways Corporation (JBLU)	0.00	20.5-21.5	18.5-19
Incyte Corporation (INCY)	76.98	97.5-102.5	93-94
Equinix, Inc. (EQIX)	547.73	252-257	233-236
CyberArk (CYBR)	111.74	66-68	57-58
Ctrip.com International Ltd. (CTRP)	34.94	62-65	57-58
Bluebird Bio (BLUE)	0.00	134-140	118-120
Ambarella (AMBA)	52.79	73-75	67-68

Current Market Outlook


For the first time in two months, last week saw some sellers stepping up to the plate, taking profits in leading names despite some good earnings reports. And today we saw very strong selling across the board, with leaders falling sharply across the board, including many that dipped toward support. In the short-term, given the prolonged run off the bottom, more consolidation is likely, so we’re fine taking a profit (or partial profit) here or there. Intermediate-term, though, we’re still optimistic—while some of the action looks iffy, very few (if any) leading stocks or indexes have broken down at this point, and these type of sharp, scary pullbacks (assuming they find support at logical levels) aren’t unusual during bull moves. We’re knocking our Market Monitor down a notch, thinking the near-term will be more challenging, but remain overall bullish.

This week’s list has a bunch of strong names that have recently emerged, so they shouldn’t have as much pent-up selling pressures. Our Top Pick is MercadoLibre (MELI), where business is reaccelerating and the stock just came out of a big consolidation.

Stock Name	Price	Buy Range	Loss Limit
Acacia Communications (ACIA)	51.83	53-56	47.5-49.5
CoStar Group (CSGP)	589.55	450-470	420-430
Cronos Group (CRON)	17.62	20-22	16.5-1705
DocuSign (DOCU)	107.98	52-54	46-47.5
Etsy (ETSY)	112.97	66.5-69.5	60-62
Euronet Worldwide (EEFT)	142.83	130-134	119-122
MercadoLibre, Inc. (MELI)	980.83	445-465	400-415
Novocure (NVCR)	0.00	50-53	45.5-47
Universal Display (OLED)	187.54	143-148	128-131
Zscaler (ZS)	126.22	55-58	49.5-51.5

Current Market Outlook


We could recap all of the market’s ups and downs of the past few days, or couple of weeks … or past few months, for that matter. But the bottom line is that, right now, the main trend of the major indexes is sideways until proven otherwise. As for individual stocks and sectors, it’s all about being selective—there are pockets of strength, but stock selection and timing your buys is important in this choppy environment. We’re knocking our Market Monitor down one more notch, not because we’re feeling terribly bearish but more to reflect the overall market’s neutral position.


The good news is that Top Ten automatically hones in on the market’s strongest stocks, and despite the usual batch of earnings potholes, most are still in good shape. Our Top Pick this week is SunEdison (SUNE), which is leading the new recovery in solar stocks thanks to its huge pipeline and yieldco strategy.

Stock Name	Price	Buy Range	Loss Limit
XPO Logistics (XPO)	0.00	47-50	43-44
SunEdison (SUNE)	0.00	27-28.5	24.5-25
Qunar (QUNR)	0.00	48-50	44-46
Norwegian Cruise Lines (NCLH)	0.00	53-55	50-51
Martin Marietta Materials (MLM)	261.52	150-153	141-142
Global Payments Inc. (GPN)	0.00	100-102	94-95
Tableau Software (DATA)	126.42	107-110	97-98
Carter’s (CRI)	0.00	97.5-100.5	94-95
Celanese (CE)	0.00	65.5-67.5	62-63
AMAG Pharm. (AMAG)	0.00	58-61	53-54

Lots of moving parts in this week’s update. We add one stock (as always), sell another, and have several ratings changes – a reflection of a mixed second-quarter earnings season, and on the cusp of the latest inflation data, to be released this Wednesday. Most of our stocks are acting well, however. And the market continues to inch forward, especially growth stocks, which is why our latest addition is a mid-cap (Internet of Things) IoT company courtesy of Cabot Early Opportunities Chief Analyst Tyler Laundon.

Details inside.

The market is taken another shot across its bow, with the indexes bending, with many leaders getting dented and with our Two-Second Indicator still negative. That said, while bending, things haven’t broken, with our Cabot Tides still positive and most leaders refusing to crack. We’re not complacent, as we’re holding our 30% in cash and placing three stocks on Hold--but we’re also not running for the storm cellar, as earnings season is likely to determine the next big move in the market and leaders.

Editor’s Note: For most of its run, Chief Analyst Carl Delfeld has referred to the Cabot Global Stocks Explorer advisory by its short-hand name, “The Explorer.” So we figured we’d join him! We have decided to shorten the name of this publication to simply, “Cabot Explorer.” The product won’t change at all. This merely puts more emphasis on the purpose of this advisory, which is to “explore” for new, often hard-to-find stocks and sectors ready to break out - regardless of market. Enjoy!

Markets seem to be paying more attention to valuations and looking to confirmation from earnings that the economy is moving to growth mode. Stocks are likely to churn a bit for a while after their great uptrend in the last year. We’ll discuss today why SPACs have cooled a bit even as they spread to Asia, and present a new idea to watch which offers huge growth potential but may be a bit pricey.

Made $430.00 (98%) realized gain. Thank you very much, your service rocks!
E. Bielanski, Deerfield, Massachusetts

In the March Issue of Cabot Early Opportunities we spread things around with a diverse group of mid-caps, plus one large cap from our Watch List that’s one of the biggest stories in MedTech.

As always, there’s something for everybody.

Enjoy!

U.S. stocks continue to defy gravity, with their audacious 2019 year-to-date gains mirroring their equally extreme fourth quarter 2018 descent.

Apple (AAPL) stock has been climbing a wall of worry over the last year. Can it continue? Or has AAPL actually peaked again, with nowhere to go but down?

This month and early November will be jammed with possibly market-moving events: earnings season, presidential (and now importantly, vice presidential) debates, the actual elections, a likely new federal stimulus package, possible change (in either direction) in the pandemic’s course, and perhaps news about a vaccine solution.

But for now, we’re stuck in Limbo-Land, with the worst (hopefully) of the pandemic behind us, yet so many unknowns just ahead. We outline some basic suggestions that we follow when in this type of market.

Plain and simple, the Alternative Energy Trader is the most successful trading service of its kind; it has averaged 23 double-digit gains a year since 2007, and the publications guarantees to deliver at least 20 double-digit gains a year....

Roger Conrad has provided in-depth analysis of the utility sector to individual and institutional investors for more than 20 years. Conrad’s Utility Investor is your complete guide to building a lifelong income stream from stocks that provide essential services....

I’ve profiled 10 revolutionary stocks here, describing how each one has the potential to yield very large profits.

Current Market Outlook


While the day to day volatility remains extreme, the market’s intermediate-term trend has turned up (according to our measures), which argues for a more constructive stance toward stocks. Of course, that doesn’t mean you should dive in headfirst—there remain plenty of headwinds, including the fact that most stocks are still below their 50-day and 200-day moving averages (i.e., plenty of potential selling to chew through on the upside). But there’s no question the evidence has improved, so it’s a good idea to slowly put money to work, and then use the market for feedback; If you develop some solid profits, you can become more aggressive, but if the uptrend decisively cracks (would take a 6% to 7% drop from here), you want to hold off further buying and honor your stops.

This week’s list continues the trend we’ve seen of many high-potential stocks spiking back toward their old highs. Our Top Pick is Okta (OKTA), which has rejoined the leadership ranks after nine-months of correcting and consolidating.

Stock Name	Price	Buy Range	Loss Limit
ACADIA Pharmaceuticals (ACAD)	47.84	48-50.5	42-44
Advanced Micro Devices (AMD)	82.24	53-56	47-49
ASML Holding (ASML)	350.01	285-295	257-263
CrowdStrike (CRWD)	105.02	65-67.5	56-58
Franco-Nevada (FNV)	125.51	122-126	109-111
Immunomedics (IMMU)	34.23	20.5-22	16.5-17.5
Okta, Inc. (OKTA)	148.41	146-152	127-130
Sea Limited (SE)	132.86	51-53	46-47
Shopify (SHOP)	585.00	575-615	510-525
Tradeweb Markets (TW)	51.44	50-52	45-46

None of the 10 best large-cap growth stocks of 2022 would have qualified as growth stocks entering the year. Now they’re bucking a downtrend.