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The market remains in good health, though selectivity remains important.
For today’s recommendation we swing back to the more conservative side of the market with a very big, very well known company whose stock has just begun a new uptrend.
As for the current portfolio, we have five stocks hitting new highs in recent days, and none doing poorly, so overall, progress is being made! There are no sells today. Details in the issue.

Current Market Outlook


Last week was a solid one for the market, not necessarily in the major indexes but in the action of leading stocks, many of which bounced nicely off key intermediate-term support. Looking at the evidence, the vast majority of it is bullish, so we are, too—we’re bumping our Market Monitor up to a level 8 in tonight’s issue. That said, earnings season is just getting underway for most stocks, which will obviously be important. There will surely be the usual ups and downs, but we’ll be looking to see if any new leadership emerges or, conversely, if some of the leading stocks that have had good moves show abnormal weakness.

In the meantime, we’re just following the system, looking for strong stocks that are relatively early in their overall runs. Our Top Pick this week is Okta (OKTA), which looks to be resuming its run after a seven-week rest.

Stock Name	Price	Buy Range	Loss Limit
Armstrong World (AWI)	88.01	80.5-83.5	73.5-75.5
Avalara (AVLR)	102.00	52.5-55.5	48.5-50
The Walt Disney Company (DIS)	144.76	128-132	117-120
Heico (HEI)	134.84	96-99	91-92.5
Marvell Technology Group (MRVL)	36.88	22-23.5	20-21
Nexstar Media Group (NXST)	105.68	111-115	101-103
Okta, Inc. (OKTA)	148.41	92.5-95.5	82.5-84.5
Yeti Holdings (YETI)	42.80	29.5-32	26-27.5
Yext Inc. (YEXT)	21.32	20.5-21.5	19-19.5
Zscaler (ZS)	126.22	63.5-67	57-59

The market remains in good health, and all Cabot’s market timing indicators are positive, telling us the odds are that the market will be higher in the months ahead.
For today’s recommendation we move outside the U.S. to a Chinese company targeting a mass market, a mass market that is virtually guaranteed to grow in the years ahead. It’s a stock that not known to most U.S. investors, and I think it’s a good buy here.
As for the current portfolio, some stocks are hitting new highs and many are close to it, while our value-based selections and Heritage stocks still show long-term potential.

When the market picture gets confusing, as it often does, it pays to have some reliable indicators to depend on—rather than the guy on the evening news. So today, after a couple of weeks of market correction that have done serious damage to some leading stocks and led many pundits to ask whether we’ve seen the market top, we turn to our indicators and ask whether the bull market is truly over, and here’s what they say.

Emerging markets have stayed strong into the second quarter, with China leading the way and calming markets by delivering 6% economic growth.

Inside this issue is a new recommendation with a play on a market some estimate as large as $94 trillion over the next two decades. The company delivers a key ingredient that turns steel into “super steel” and plays a key role in electrifying the grid.

There is tremendous growth ahead for technology. There will be incredible opportunities to invest. While you probably don’t associate technology stocks with a dividend newsletter, things are changing. In this issue I identify a technological behemoth that is now a blue chip dividend payer. Its products are so widely used that owning the stock provides a great way to play the technology revolution in general and gain exposure to the explosive growth.

Current Market Outlook


Last week saw a continuation of the market’s rally, with most major indexes (save small caps) lifting to new recovery highs, led by many “old world” sectors like financials, mining, transports and the like. Meanwhile, many hot growth stocks (mostly technology) lagged, with a bunch falling to key intermediate-term support. What does it mean? As we wrote in Friday’s update, you should take things on a stock-by-stock basis—most stocks still look great, and if you have some winners, you should continue giving them a chance to crank higher. But it’s important not to be complacent, either, so be sure to honor your loss limits and stops in case the selling in growth stocks continues and/or the selling spreads to other corners of the market. Overall, we remain mostly bullish as most of the evidence continues to point up.
Not surprisingly, this week’s list has many newer names to the publication as the buying power rotates to other areas. Our Top Pick is Wynn Resorts (WYNN), which, along with many gaming peers, looks to have changed character last week. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Acacia Communications (ACIA)	51.83	55.5-58	50-52
Advanced Micro Devices (AMD)	82.24	26.5-28	24-25
Amphenol (APH)	91.75	99-102	92-93
Autohome (ATHM)	98.65	103-108	94-96
Cabot Microelectronics (CCMP)	156.17	118-123	107-110
Delta Air Lines (DAL)	54.28	56-58	52-53.5
Lennox International (LII)	270.56	260-268	242-247
Lululemon Athletica (LULU)	304.69	166-171	150-153
Rio Tinto plc (RIO)	57.05	58-60	53.5-54.5
Wynn Resorts (WYNN)	121.08	136-142	122-125

The market’s weakness didn’t last long; the indexes snapped quickly back, though breadth is not quite as good as previously. Still, the market strength restores my confidence that we’ll see higher highs in the months ahead, and I recommend that you invest accordingly.
For today’s recommendation we swing back to the aggressive side. Remember those promises of DNA-based personalized medical treatments from a decade ago? We’re getting closer and today’s recommendation is a leading force in the field.

The past few weeks have been choppy and challenging for many growth stocks, but we’re happy to see some of the yellow flags from last week be addressed--our Cabot Tides, which were on the fence, are again positive, and most growth stocks that dipped to support have found buyers. Of course, there remain some worries (earnings season is coming up; relatively few stocks are hitting new highs), but most of the evidence remains bullish
Tonight, in fact, we’re putting some of our sidelined cash back to work by averaging up in one stock and starting with a half-sized position in another, which will leave us with 17% cash.
In tonight’s Cabot Growth Investor, we talk about all our current holdings, highlight one beaten-down sector we’re keeping a distant eye on for a new upturn, as well as look at some little-known names that are on our watch list.

The market remains in good health, and all Cabot’s market timing indicators are positive, telling us the odds are that the market will be higher in the months ahead.
For today’s recommendation, we shift to a somewhat unusual investment, a high-yielding limited partnership that may avoid the cycles of a notoriously cyclical sector, while offering substantial upside potential.
As for the current portfolio, overall, our holdings are performing well. But we have one sell, a stock that has popped higher in recent days on news and is now closing in on resistance. Details in the issue.

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

Current Market Outlook


The major indexes have scored a couple of solid gains, though we’re seeing plenty of crosscurrents underneath the surface; this could be the start of a rotation out of growth, but it may just be normal action that’s often seen around quarter-end (as hedge funds, most of which get paid quarterly, book profits and reposition themselves). Just looking at the evidence, the push higher has kept the intermediate-term trend pointed up, and while some leaders have hit potholes, most remain in uptrends and have avoided abnormal action. Overall, then, we remain mostly bullish, though we’ll keep our Market Monitor at a level 7 for a bit longer to see if this recent push (a) continues and (b) is led by leading, Top Ten-style stocks.

This week’s list has many familiar names from earlier this year—a good sign, in our view, that leading stocks are continuing their uptrends. Our Top Pick is Ionis Pharmaceuticals (IONS), a unique drug firm with a powerful chart. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
Armstrong World (AWI)	88.01	77-79	70.5-72
Array Biopharma (ARRY)	46.35	23-24.5	20.5-21.5
Carvana (CVNA)	82.90	56-59	48-50
Ionis Pharmaceuticals (IONS)	73.34	77-80	69-71.5
Paylocity (PCTY)	97.34	87-90	79-81
ServiceNow (NOW)	341.86	240-248	220-223
Survey Monkey (SVMK)	19.97	17-18	15.3-16
TAL Education (TAL)	50.49	34-36.5	31.5-32.5
TransDigm (TDG)	599.41	443-458	415-425
Universal Display (OLED)	187.54	150-155	134-137

The market remains in an uptrend, and many of our leading stocks have been hitting new highs, even though the major indexes haven’t—yet. Thus I continue to recommend that you be heavily invested in a diversified portfolio of stocks—growth, value, dividend-paying and more. Someday, it will become appropriate to be more cautious, but that time is not now.
Today’s stock is a young technology stock with great growth prospects as it supplies its customers with the tools needed to secure digital operations of all types and sizes. It’s an aggressive, high-risk investment, but the trend is strongly up.
As for the current portfolio, six of our stocks have hit new highs in recent days, so we’re making great progress. The only changes this week are two downgrades from Buy to Hold. Details inside.