Search

A few weeks ago, we were optimistic that by this point the market would be in a full bore, all-out bull stampede. Instead, the market’s advance has turned into a choppy uptrend, especially among individual stocks and sectors, where a solid week or two of rising prices attracts profit-takers. Nevertheless, the good shouldn’t be the enemy of the perfect—most stocks are heading higher, and while volatility is elevated, there are plenty of winners to go around. Just remember to keep your feet on the ground, take a few chips off the table if your stock soars for a few days, and to cut all losses short. This week’s Top Ten contains a few names that are new to us, including one monster earnings winner last week. Our top pick is FMC Technologies (FTI), an oil service stock that is showing great price and volume action of late. It’s not as extended as some of its oil peers, but looks to be a great buy around here, or a little lower.

Stock Name	Price	Buy Range	Loss Limit
GTI (GTI)	0.00	18-22	-
JRCC (JRCC)	0.00	27-30	-
PXD (PXD)	0.00	60-65	-
SOL (SOL)	0.00	17-20	-
CRK (CRK)	0.00	51-55	-
CSIQ (CSIQ)	0.00	30-34	-
EAC (EAC)	0.00	49-52	-
ENER (ENER)	0.00	43-52	-
ERES (ERES)	0.00	14-16	-
FTI (FTI)	0.00	70-74	-

Current Market Outlook


The divergence continues, with the broad market looking increasingly weak. Even the rally last week couldn’t lift many stocks off their bottoms. So what comes next? Optimists may claim that low interest rates mean there are no attractive alternatives to stocks, but pessimists will note that divergences such as these seldom end well. Thus our market monitor remains unchanged—in slightly positive territory. You can still make money in this market, but more than ever, skillful stock-picking, combined with proper entry timing, is critical. So we urge you to study numerous individual stocks carefully. Try to buy on normal pullbacks. And above all, keep losses small if a stock doesn’t do what you hired it to do. Today’s roster includes some strong breakouts and a handful of set-ups, and our Editor’s Choice is Vantiv (VNTV), which vaulted out to new highs last week on a positive earnings report and is riding a fine trend of long-term growth.

Stock Name	Price	Buy Range	Loss Limit
Zoës Kitchen (ZOES)	0.00	43-45	39-39.5
WisdomTree (WETF)	0.00	24-26	21-22
Vertex Pharmaceuticals (VRTX)	230.36	135-137	121-123
Vantiv (VNTV)	0.00	42-45	39-40
ServiceNow (NOW)	341.86	76-78	72-73
Masco (MAS)	0.00	24.5-26	23-24
ICON plc (ICLR)	0.00	78-80.5	71-72
Equinix, Inc. (EQIX)	547.73	270-280	260-265
Buffalo Wild Wings (BWLD)	0.00	188-193	174-176
Anacor Pharmaceuticals (ANAC)	0.00	144-151	125-130

The market environment hasn’t changed much during the past couple of weeks; the intermediate-term trend of the market is down, and few stocks are managing to make meaningful progress on the upside. That said, it’s also not a disaster out there; some growth stocks have been hammered, but many groups are holding up well and most indexes are just a few percent off their peaks. Of course, the U.S. elections are tomorrow, and it’s possible the results could change the market’s course. But right now, we’ll keep our Market Monitor in neutral territory as the sellers remain in control.

This week’s list is a bit of a hodgepodge of stocks and sectors, but most of the names have recently reacted well to earnings, which is always a positive clue. Our favorite of the week is Whirlpool (WHR), a turnaround stock that is showing exceptional strength. It’s not changing the world, but the numbers look outstanding. Try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
WPI (WPI)	0.00	84-86	-
Whirlpool (WHR)	0.00	94-98	-
Affiliated Managers Group, Inc. (AMG)	0.00	124-128	-
CommVault (CVLT)	0.00	62-64	-
Eastman Chemical (EMN)	0.00	57.5-59.5	-
Expedia Group (EXPE)	0.00	58-59.5	-
GameStop (GME)	0.00	23-24.5	-
Louisiana-Pacific (LPX)	0.00	15.5-17	-
NXP Semiconductors (NXPI)	0.00	24.5-25.5	-
PVH Corp. (PVH)	0.00	105-110	-

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.

The market has hung in there during the past couple of weeks, which is good to see, but there hasn’t been enough strength — from the major indexes or from growth stocks — to tell us the buyers have retaken control. At the same time, nothing has changed with the big picture, either, which leaves us with the same thoughts we had two weeks ago: Right now, it’s best to be cautious as the correction plays out and as earnings season goes along, but you want to be prepared to move when the tide turns back up.

For our part, we’re holding a good chunk of cash and standing pat tonight, but we have an expanded watch list as we monitor earnings season for signs of future leadership.

Current Market Outlook


Not much changed with the market last week, as the major indexes finished up a fraction of a percent, remaining in the trading range of the past three months. That said, there’s no doubt that individual stocks are acting better, especially the liquid leaders that are generally a good barometer of institutional sentiment. Not only are most well-traded growth stocks holding firm, some have actually emerged to new highs on earnings. We’re not ready to change our Market Monitor yet (the intermediate-term trend remains slightly negative and there are tons of earnings reports this week), so it’s best to pick your spots on the buy side, hold some cash and practice patience with your resilient performers.

This week’s list has a bunch of good-looking charts from a variety of industries. For our Top Pick, we’ll go one of the liquid leaders that’s just emerged.PayPal (PYPL) exploded out of a 15-month base last Friday on its heaviest volume since the day of its IPO. We think it’s buyable here or on dips.

Stock Name	Price	Buy Range	Loss Limit
Copa Holdings (CPA)	0.00	93-89	85-84
Domino’s Pizza (DPZ)	339.47	165-160	151-148
FMC Technologies, Inc. (FTI)	0.00	32.5-31	29.5-29
HDFC Bank Limited (HDB)	0.00	75-72	68-67
ICON plc (ICLR)	0.00	84-82	77-76
Match (MTCH)	0.00	19.5-18.5	17-16.5
Netflix, Inc. (NFLX)	423.92	127-123	112-110
PayPal (PYPL)	147.00	44-42	40.5-39.5
Steel Dynamics (STLD)	0.00	26.5-25.5	23.5-23
Zayo Group (ZAYO)	0.00	31.5-30.5	29-28.5

EV mania has been supplanted by AI mania, but industry fundamentals are still strong and the electric vehicle ecosystem is still growing. Is that enough to make this Chinese electric vehicle company a buy?

Cannabis stocks are generally flat since I sent you the March 27 issue of Cabot Cannabis Investor.

Given the potential magnitude of near-term catalysts, I suggest continuing to hold exposure to the group, and accumulating on weakness. If you have zero exposure, consider buying some now. If you have full exposure, consider adding on any substantial weakness of 2%-4% or more in this highly volatile group.

Switzerland is an economic powerhouse, and putting some high-quality Swiss stocks in your portfolio is a timely hedge against overexposure to U.S. equities.

The debt picture for the United States is growing increasingly precarious and, while it has yet to hamper stocks, it’s worth hedging against in your portfolio. Switzerland offers just such an opportunity.

For the second straight week growth stocks got hit hard, which weighed on the Nasdaq. Though interestingly, as money rotated out of the 2024 leaders, it raced into slow and steady stocks that have been left behind in years past. By week’s end the S&P 500 had lost 1%, the Dow had gained 1%, and the Nasdaq had fallen 3.5%.

Apple (AAPL) stock and GoPro (GPRO) stock have both been beaten down over the past year, but are starting to show signs of life. Which stock has the most staying power? Let’s break it down!

It’s been a rough few months for risk-averse investors. Since the first-quarter rally failed in early April, the market has developed no obvious overall trend, instead chopping up and down from month to month like a particularly unpredictable yo-yo. It’s the kind of action that makes you want to buy something...