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The broad market indices are up nicely today on news of significant de-escalation of U.S.-China trade tensions following weekend talks in Switzerland.

MSFT, FRSH, SFM Earnings Roundup

Sell Remaining Quarter of Paramount Global (PARA). Bloomin’ Brands (BLMN) Earnings Update.

Hopefully, you took some profits last week as I advised. It’s been a rough week since then, but it wasn’t unexpected. The well-publicized legalization day in Canada was exactly the type of event that often accompanies market tops.

Of course, it’s not just the marijuana stocks that have been sinking; the broad stock market is trending down as well.

But have no fear! The key to successful investing in this sector is to hold cash when the environment is against you, and to invest in great growth companies when trends are positive, and to take partial profits—as we did last week—when stocks get frothy.

Like many consumer goods producers, companies that make apparel and related products have experienced sharply lower sales and profits with the stay-at-home restrictions during the pandemic. But, for companies that make everyday apparel, particularly those with enduring brands or an outdoor/active lifestyle focus, demand should eventually return to healthy levels.

In this issue, we list seven companies that we believe offer interesting recovery potential.

A year ago, college kids laid out the case for a Trump’s victory. And they did it with a mess of disparate data in just 20 hours, using a data prep platform by the little-known company that I’m recommending today.

We continue to watch in amazement the values that the market puts on electric vehicle makers, with the most recent example of Rivian Automotive (RIVN). Since its IPO at $78/share, RIVN shares have doubled, making the EV company’s roughly 900 million shares worth a total of about $144 billion. This makes it the #3 most valuable car company in the world.

Current Market Outlook


The market performed well last week, and nothing has changed from a top-down point of view—the intermediate-term trend remains up for the major indexes and many stocks, so we remain optimistic the path of least resistance is up. That said, it’s really all about what you own: Many indexes (small- and mid-caps) and sectors (industrials, financials, transports) look OK, nothing great, but growth oriented stocks are lighting up the sky, with more big earnings-induced breakouts last week than we’ve seen in a very long time. In the near-term, these hot stocks might be a bit too hot; some potholes (or even rotation out of them and into the broad market) could certainly be on the table. But we also think that, assuming the general market holds up, the first retreats in many of these names are likely to provide solid entry points, as the fresh breakouts bode well overall. We’re moving our Market Monitor up to level 7.

This week’s list has many of last week’s most powerful gaps and a few others with solid setups and/or persistent uptrends. It was hard to settle on one, but we’ll go with Chegg (CHGG) for our Top Pick, as it just emerged from a picture-perfect consolidation on earnings.

Stock Name	Price	Buy Range	Loss Limit
Atlas Air Worldwide Holdings, Inc. (AAWW)	38.45	36.5-38.5	32-33
Atlassian (TEAM)	182.16	174-179	155-158
Barrick Gold (GOLD)	27.20	25-26.5	22-23
Chegg (CHGG)	74.21	58-62	50-52
MercadoLibre, Inc. (MELI)	980.83	750-790	660-680
Peloton (PTON)	53.03	40.5-43.5	34-35.5
Schrodinger, Inc. (SDGR)	59.05	53-56	45-46.5
TG Therapeutics, Inc. (TGTX)	19.88	17.5-19	14.5-15.5
Twilio (TWLO)	183.39	175-187	149-154
Wingstop (WING)	121.52	116-122	99-103

Current Market Outlook


This morning’s positive news of a possible COVID vaccine helped the major indexes surge, but it also revealed some of the crosscurrents that remain—today saw a big bout of rotation, as leading growth titles were mostly lower while the lagging (usually economically-sensitive) areas did well. Even so, we don’t advise getting too involved in the day-to-day news or gyrations; overall, there’s still more positive evidence than negative, with the intermediate-term trend still up (today’s action helped on that front) and just about every leading stock remaining in a firm uptrend. Given the crosscurrents, we don’t advise going hog wild on the buy side, but we continue to think holding your strong performers (maybe with some partial profits here or there) and looking for decent entry points on strong names is the way to go. While we were going to knock our Market Monitor down late last week, the action of the past two sessions has us keeping it at a level 7.

This week’s list is a bit more diversified than in recent weeks, with strength seen in a few more sectors. Our Top Pick is PayPal (PYPL), which appears to have resumed its run after a multi-month rest period. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Avalara (AVLR)	102.00	97-100	88-90
Beyond Meat (BYND)	132.87	122-128	109-113
Fastly (FSLY)	39.31	36-39	31.5-33.5
Fortinet Inc. (FTNT)	137.53	137-143	123-127
Inphi (IPHI)	120.16	105-110	94-97
MyoKardia (MYOK)	108.56	106-110	92-95
Ollie’s Bargain Outlet (OLLI)	103.94	73-77	64-66
PayPal (PYPL)	147.00	142-147	129-132
Scotts Miracle-Gro (SMG)	155.72	139-145	125-128
Tesla, Inc. (TSLA)	818.87	770-815	680-705

Current Market Outlook


As we’ve been writing for many weeks, most of the primary evidence (trends of the major indexes, action of leading stocks) remains in the plus column, as do some key secondary pieces of evidence (blastoff indicators, number of new lows, etc.), so we’re sticking with a bullish stance. But the near-term should be interesting—the continuing dichotomy in the market means most indexes aren’t far from their 50-day lines, and we’ve started to see more up-down-up-down action, which, after a big, prolonged (13-plus weeks) upmove, tells you that the bulls and bears are beginning to fight it out. None of this is a reason to anticipate something sinister—again, most of the evidence is still positive—but it’s prudent to pick your spots on the buy side and have some stops in place in case the sellers make a stand and/or another bout of rotation takes hold (we started to see that today). We’re nudging our Market Monitor down to a level 7.

This week’s list has something for everyone, with stocks of all stripes making the cut. Our Top Pick is Etsy (ETSY), which has come alive after a year-long rest. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Crispr Therapeutics (CRSP)	84.11	71.5-75	62-64
Etsy (ETSY)	112.97	97.5-102	84-86
Farfetch (FTCH)	26.23	16-17.5	14.5-15.5
GenMark Diagnostics (GNMK)	15.47	12.3-13	10.6-11
HubSpot (HUBS)	582.89	207-212	187-190
Inphi (IPHI)	120.16	107-111	98-100
Invitae (NVTA)	32.06	26-27.5	22.5-23.5
Meritage Homes (MTH)	102.20	71.5-74	63.5-65
Plug Power (PLUG)	8.35	7.2-7.6	5.9-6.2
STAAR Surgical (STAA)	57.94	56-59	49-51

After an ugly day October 10, the major indexes showed solid overall support last week, but under the hood was another round of volatile action, The market’s intermediate-term trend continues to tilt up, though we’re still taking things on a stock-by-stock basis and are closely watching earnings season, which is about to rev up. In the meantime, we’re just following the plan that’s been working for us: Being selective on the buy side, holding strong names (albeit with some partial profits on the way up) and also raising stops as time passes. We’ll again stick with a level 7 on the Market Monitor.

This week’s list is a mixed bag in terms of sectors and setups, with some we’re considering entering on strength and others on pullbacks. Our Top Pick is likely in for years of accelerating growth, and after a big run into early October, the recent pullback looks normal. We’re OK starting small here or on a bit more weakness.

Among small-cap investors, big data stocks are becoming an increasingly intriguing sector. And I like one big data stock in particular.

Despite some selling pressures early last week, the indexes rebounded nicely on nearly every small dip, and by week’s end the S&P 500 had gained 1%, the Dow was mostly unchanged, and the Nasdaq had risen by 1.8%.

Despite some selling pressures early last week, the indexes rebounded nicely on nearly every small dip, and by week’s end the S&P 500 had gained 1%, the Dow was mostly unchanged, and the Nasdaq had risen by 1.8%.

Two of our positions reported this week. One was up over 8% the day after reporting. And the other is up nicely in early trade today after reporting yesterday.

Current Market Outlook


While the major indexes took another hit last week, we actually saw a few encouraging signs from the market—the broad market, for instance, continues to display some positive divergences (i.e., it’s in better shape now than back in February, when the indexes were at a similar level) and many leading stocks held key support (often near their 50-day lines), with a few actually shooting to new highs. All of that is a good reason to keep your antennae up—but with the major indexes still in intermediate-term downtrends, we’re keeping our Market Monitor in neutral territory. If this is the start of a sustained rally, there will be plenty of opportunities to jump on, but right now it’s best to mostly stand pat, holding resilient stocks but also keeping some cash on the sideline.

This week’s list is a mixed bag, with lots of turnarounds and some growth stocks sprinkled in. Our Top Pick is Etsy (ETSY), which, despite a big run, has refused to budge during the market’s latest downdraft.

Stock Name	Price	Buy Range	Loss Limit
BofI Holding (BOFI)	42.93	39-41	36.5-38
Delek (DK)	0.00	39.5-41.5	36-37.5
Etsy (ETSY)	112.97	26-27.5	23.5-24.5
Kirby (KEX)	0.00	79-81.5	73.5-75
LGI Homes (LGIH)	86.04	69-73	64-66
NetApp (NTAP)	0.00	61-64	56-58
New Relic (NEWR)	103.70	72-74.5	65.5-67
Planet Fitness (PLNT)	0.00	37-39	34-35.5
Proofpoint (PFPT)	113.79	113-118	104-106.5
Urban Outfitters (URBN)	0.00	36.5-38.5	33.5-35

Current Market Outlook


Not surprisingly, we saw some selling come into the market last week, as many stocks and indexes were stretched to the upside and some near-term sentiment measures (put-call ratios, etc.) showed complacency. In the short-term, such wobbles could easily continue, as we’re seeing some bigger names get hit on decent volume. Intermediate-term, though, we’ve seen very little abnormal action among individual stocks and the trends of the major indexes are pointed up. It’s still a good idea to go slow and look for solid entry points, and don’t forget to book some partial profits on the way up. But with the evidence still bullish, we’re remaining heavily invested.

This week’s list is centered on growth ideas, including a few that have emerged after nice rest periods. Our Top Pick is Okta (OKTA), an early-stage leader that just busted loose from a three-month zone on huge volume.

Stock Name	Price	Buy Range	Loss Limit
BJs Wholesale (BJ)	36.69	29-31	27-28
Glaukos Corp. (GKOS)	67.84	59-64	51-53.5
HubSpot (HUBS)	582.89	146-152	134-137
Match (MTCH)	0.00	50-52	45-46.5
NuVasive (NUVA)	66.00	67-69.5	61.5-63
Okta, Inc. (OKTA)	148.41	68-72	58-60
Palo Alto Networks (PANW)	236.92	229-236	210-214
Ulta Beauty (ULTA)	331.95	272-283	249-254
United Continental Holdings (UAL)	96.76	84-86	78-79
Yext Inc. (YEXT)	21.32	24.5-26	21.5-22.5