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The market’s uptrend continues, but as has been the case for many weeks, it’s somewhat tricky out there, with news-driven moves, selling on strength, the occasional bout of rotation and potholes—all while large swaths of the market are doing a lot more chopping than trending. That’s not “bad,” per se, but it remains a selective environment: We continue to take things on a stock-by-stock basis, focusing on strong names that are ideally fresher in their uptrends, while also being active with portfolio management. We’ll again leave our Market Monitor at a level 7.

This week’s list again has a heavy growth component, and not all are in the AI realm, which we find encouraging. Our Top Pick is a blue chip e-commerce name that, after a couple of false starts, looks like it’s ready to move.

After another month of dramatic declines in March, cannabis stocks showed a little more stability in April.

This is encouraging, even though it is never really possible to “call the bottom” in out-of-favor groups.

How out of favor is cannabis? I’ve invested through three bear markets, and I don’t think I have ever seen a group as unloved as cannabis is now. Remember, this is a good thing if you are a contrarian investor looking for bargains, as long as the group in question is not a value trap. (Like the declining newspaper industry years ago, a value trap that Warren Buffett got caught in.)

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

Current Market Outlook


Once again, the major indexes tested new high ground last week, and once again, the sellers appeared and drove the indexes and many stocks lower. Day-to-day fluctuations aside, the story remains the same—the intermediate-term trend remains sideways, though below the surface, there are many stocks and sectors making good-sized multi-week moves. So the goal, of course, is to stick with what’s working (though taking partial profits on the way up makes sense) while jettisoning any stocks that break support. Keeping some cash on the sideline is also wise, at least until the market begins a sustained uptrend.

This week’s list has it all—some speculative stocks, some stocks that have pushed ahead on big news and some turnaround situations. Our Top Pick is Ligand Pharmaceuticals (LGND), partly because of the big story, and partly because of the lower-risk set-up in its chart.

Stock Name	Price	Buy Range	Loss Limit
T-Mobile US (TMUS)	0.00	36-38	33.5-34.5
NetEase, Inc. (NTES)	0.00	138-143	127-128
MercadoLibre, Inc. (MELI)	980.83	140-145	130-133
Louisiana-Pacific (LPX)	0.00	17.5-18.5	16-16.5
Ligand Pharmaceuticals (LGND)	267.14	83.5-87	79-80
Integrated Device Technology (IDTI)	0.00	23-24	21-22
Dunkin’ Brands Group, Inc. (DNKN)	0.00	52-53	49-50
Clovis Oncology (CLVS)	0.00	84.5-87.5	77-78
Ciena (CIEN)	44.25	23-24	20.5-21
Broadcom Limited (AVGO)	266.26	143-148	128-130

Current Market Outlook


Despite the never-ending Fed watch (many investors are looking forward to this week’s jobs report for clues on the Fed’s next move), the major indexes remain in a very tight trading range, with some (including the S&P 500) basically unchanged since mid-July. Still, by our measures, the intermediate- and longer-term trends remain up, and the fact there has been little giveback by the major indexes in recent weeks is a positive. Individual stocks have been trickier, with some potholes emerging on earnings, rotation among industry groups or simply profit taking, but most remain in good shape. Overall, the odds continue to favor the next big move being up, so you should stay heavily invested in strong stocks.

This week’s list has a nice mix of stories to consider, including a couple that are benefiting from recent acquisitions. But our Top Pick is NetEase (NTES), a leading online game company out of China—growth is excellent, and after a brief shakeout, the stock is back in new high ground.

Stock Name	Price	Buy Range	Loss Limit
ZELTIQ Aesthetics Inc (ZLTQ)	0.00	35-37	32-33
Cimarex Energy (XEC)	0.00	129-134	122-124
Thor Industries (THO)	104.76	78.5-79.5	73-74
Proofpoint (PFPT)	113.79	75-77.5	70-71.5
NetEase, Inc. (NTES)	0.00	208-214	195-196
NetApp (NTAP)	0.00	33.5-35	31-32
Microchip Technology (MCHP)	79.12	59-60.5	55.5-56
Lumentum (LITE)	87.00	32-33.5	29-30
Dexcom (DXCM)	421.36	89-91.5	82-83
Berry Global (BERY)	64.22	43-44	39-40

Current Market Outlook


The market has enjoyed something of a “lockout” rally since it bottomed in early February, rarely pulling back for more than a couple of days before finding buyers. Combined with some rare momentum indicators that have flashed, the action is characteristic of a kick-off to a sustained advance. That said, there remain flies in the ointment—most of the strength has been in dividend-related stocks (growth stocks are just doing so-so), and the off-the-bottom sectors (industrials, commodities, etc.) are starting to hit resistance. As earnings season approaches, some pullbacks would not be unusual among individual stocks and sectors. Altogether, you should continue to lean bullish, but we need to see growth stocks get going and the longer-term trend turn up before getting fully bullish.

This week’s list is a good mix of stocks and sectors; we’re seeing more growth-oriented stocks begin to appear. Our Top Pick is Five Below (FIVE), a great cookie-cutter story whose stock recently reacted well to earnings. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
United States Steel Corporation (X)	0.00	15-16	13-13.5
Square, Inc. (SQ)	91.04	13-14	11-11.5
Sonic Corp. (SONC)	35.22	33.5-35	30-31
RSP Permian (RSPP)	0.00	27-28.5	25-25.5
MasTec, Inc. (MTZ)	66.65	18.5-19.5	17-17.5
Lululemon Athletica (LULU)	304.69	66-68	61-62
Michael Kors Holdings Limited (KORS)	73.22	55-58	50-51
Hewlett Packard Enterprise (HPE)	0.00	17-18	15-16
Five Below (FIVE)	134.58	39-40.5	35.5-36.5
Amedisys (AMED)	174.06	46-48	43-44

Buying a stock needs to be a well-reasoned decision, here are five questions to ask yourself before you pull the trigger.

WHAT TO DO NOW: Remain cautious overall, but if you have a ton of cash, it’s OK to put a little to work. Our market timing indicators have improved, but by our eye, haven’t yet turned up, and while last week was a great first step for the market, there hasn’t been much follow through or expansion of new highs. To be clear, we’re optimistic and a few good days could make all the difference, but right here we’re still going slow and seeing if the market and leadership can truly emerge. In the Model Portfolio, we’ll buy another half of DraftKings (DKNG), leaving us with around 65% in cash. We’re also restoring our Buy rating on Uber (UBER) for those that don’t own any given the stock’s very powerful snapback. If things kick into gear, we’ll likely put money to work quickly, but right now we’re going slow and letting the rally prove itself. Details below.

Not much has officially changed with the market since our last issue, with the Cabot Tides positive, but the other indicators still down and with most growth stocks still having trouble making any real progress. That said, we are seeing a gradual improvement in the evidence, with other indicators closing in on green lights and, even among individual stocks, some better, more proper action.

Overall, we remain defensive, but we are making a couple of small moves tonight, adding two half-sized positions, including one in a stock we already own.

In tonight’s issue, we go over all our stocks, highlight some new names and even talk about one non-growth sector that intrigues us. Ideally, the market is ready for a real rally, and if so, we’ll be aiming to put our remaining 70% cash position to work. But for now, going slow remains your best course.

Cybercrime could cost the world $6 trillion this year, putting cybersecurity at a premium. These five cyber stocks and ETFs should benefit.

WHAT TO DO NOW: Remain bullish, but continue to prune weak names and hold/buy stronger ones. In the Model Portfolio, we’re letting go of the rest of our small position in DraftKings (DKNG), which is breaking down further today after bad news on the tax front. We’ll hold the cash for the moment, leaving us with around 28% on the sideline.

WHAT TO DO NOW: The market remains in good shape, but leadership is still developing, with many resilient stocks getting hit while buying moves elsewhere. Today we’re cutting bait with our small position in Penumbra (PEN), which is slicing through support, and replacing it with Rubrik (RBRK), which looks like a new leader in the strong cybersecurity group. Details below.

We’re doing things a little differently this month since there’s potential for a stock-moving announcement tomorrow that could impact this month’s new addition, which is a speculative mining stock.

The market has pulled back a bit in recent days, but not enough to change our stance. By our measurements, the market’s intermediate-term trend remains up, while the long-term trend is still working to turn up.

More important, however, is how the stocks in our portfolio are acting, and the answer is “pretty good!” In fact, we’ll continue to hold them all today.



As for today’s recommendation, it’s a very well-known U.S. meat company that reported earnings just this morning—and the dip that followed that report now makes the stock an even better bargain!



Full details in the issue.

We’ll let everyone else fight it out over the meaning and truthfulness of the DeepSeek revelations—as always, we’ll stay focused on the actual evidence, and here’s what we see: First off, the broad AI infrastructure areas look very iffy; the odds favor most chips, networking and electricity stocks are in the so-called penalty box. That said, the rest of the market took on water today but didn’t look abnormal. We do view the dramatic action as a yellow flag but we’re also not panicking as many of the names that had begun to perk up/break out are still acting well enough. We think it’s prudent to drop our Market Monitor back to a level 6 and take things on a stock-by-stock basis from here.

This week’s list does have a couple of AI-related names that got whacked, but the rest are from other areas that look fine. Our Top Pick is a name that looks like it’s finally, decisively changed character. Start small and aim for dips.

For growth stocks, buying low usually doesn’t mean you’re getting a bargain. It usually means you’re buying a laggard! That’s right—believe it or not, in the market, strength tends to lead to strength, while weakness tends to lead to weakness.