Search

With electric vehicle (EV) stocks skidding, now’s a perfect time to take a page from the American consumer’s playbook and take a closer look at hybrids.

It’s cheaper than natural gas, more dependable than renewables, and Bill Gates is investing billions of dollars in its development. Here’s how (and why) advanced nuclear power should be in your portfolio.

Rising levels of fear in the market against a weaker backdrop for stocks mean it’s time for investors to get defensive. Here are two defensive sectors I like now.

The Trump administration has been mostly mum on cannabis reform. But a new cabinet nominee could bring much-needed momentum to the sector.

Governments across the globe have been reining in spending to help reduce debt and balance their budgets. Here are three asset classes to take advantage of the belt-tightening, and three to avoid.

The market continued its strong rebound from its early-April lows as the indexes rose all five days last week. The S&P 500 gained 2.9%, the Dow rallied 3% and the Nasdaq advanced by 3.4%.

Inverse, bear, and short ETFs have certainly underperformed this year, but is that enough to make a contrarian case for investing in them in 2025?

The policy proposals of the new administration are raising the prospects for a Trump energy boom, and this natural gas stock is my favorite way to play it.

Current Market Outlook


We like to go with the evidence that’s in front of us at any given time, and if you do that today, you’ll see that most of the key evidence continues to look solid—the intermediate-term trend of the major indexes is tilted higher (though there’s still some resistance at the early-September highs to chew through), while more and more leading stocks are acting constructively; most have pulled back reasonably (so far) after heady runs during the prior three-plus weeks. Of course, we’re not leaving our brains at the door either, as earnings season (which ramps up this week in a big way) and the upcoming U.S. elections certainly have the potential to carve out a few potholes, while sentiment has picked back up after the August/September dip. Thus, we remain flexible and think picking buy points is vital, but overall, we remain mostly bullish.

This week’s list has a ton of potential pullback buys, though you have to be aware of earnings dates. Our Top Pick is Beyond Meat (BYND), which is enjoying a normal breather and looks to be approaching a good risk-reward entry point.

Stock Name	Price	Buy Range	Loss Limit
Avalara (AVLR)	153.44	147-152	132-135
Beyond Meat (BYND)	183.98	178-185	153-156
Bill.com Holdings (BILL)	116.15	110-114	97-100
Carvana (CVNA)	213.52	207-220	180-187
Deckers Outdoor Corp. (DECK)	253.08	238-246	218-222
Invitae (NVTA)	48.38	47-49.5	41-42.5
Monolithic Power (MPWR)	312.85	300-310	270-275
Paycom Software (PAYC)	383.11	360-375	320-327
Plug Power (PLUG)	16.39	15.6-16.8	13.5-14.0
SunPower (SPWR)	17.62	16.5-17.5	13.5-14.5

All in all, the good-not-amazing environment remains in place, with intermediate-term uptrends intact for the major indexes and a solid amount of good-looking leadership out there. That said, there also remain a fair number of potholes out there, and most broader indexes tested their 50-day lines late last week. All told, there are plenty of stocks in a variety of sectors that are working, so we’re bullish, but picking strong names, targeting decent entry points and booking a few partial profits on the way up are advised. We’ll leave our Market Monitor at a level 8.

This week’s list has something for everyone, and we like how many of them have shown excellent power of late. Our Top Pick looks like an institutional way to play the energy transition trend. Aim to enter on dips.

We had written lately that the market had been extremely quiet in recent weeks ... possibly a bit too quiet, as the market has a way of hitting a pothole after a period of calm. Sure enough, we saw some growth stocks ease early last week, and then the Middle East attacks and counterattacks caused selling on Friday. Even so, it’s been a normal wobble so far, and while things are likely to be tricky and news-driven in the near term based on the happenings in the Middle East, just about all of the intermediate-term evidence remains bullish. We’ll leave our Market Monitor at a level 7 today.

This week’s list is surprisingly growth-y, with many names from different sectors at or threatening new high ground. Our Top Pick looks to be near a decent entry after a humongous rally from early April to late May.

We can’t say much bad about the market’s rebound from its pre-Thanksgiving low area, but we wouldn’t say the rally has been decisive at this point. That’s not bearish, but simply a fact that the recovery needs to continue to progress—a bad two or three days from here could get iffy, though continued strength would likely bring a spate of breakouts. As always, we’ll just take it as it comes—right here, we’re encouraged and are extending our line, but are going slow until we see more stocks confirm on the upside. Our Market Monitor stands at a level 6.

This week’s list reflects some of the broadening out we see in the market, with names from many different nooks and crannies. Our Top Pick is a chipmaker that sat out the dance during the past year and a half but has recently emerged on big volume after earnings as growth accelerates. Try to buy on weakness.

Complacency is creeping back into the market, but we remain vigilant as the earnings season cranks up into full gear. That said, the broad backdrop is still in good shape as evidenced by some of our favorite indicators. We’ve also done some pruning recently (mostly among laggards) as the market’s multi-month run is becoming a bit extended. But we still see opportunities, especially in areas investors have overlooked. All told, near-term wobbles are possible, but we remain bullish as the odds favor the new uptrend bringing us higher over time. We’ll keep our Market Monitor at a level 7, but we’ll stay nimble as earnings come in.

This week’s list contains some formerly out-of-favor stocks that are now in much better shape as industry trends improve. Our Top Pick is an engineering firm that shows all the classic signs of being under strong institutional accumulation. We’re OK using dips to enter.

The story remains mostly the same: When it comes to rubber-meets-the-road evidence, nothing has changed—the intermediate-term trend of the major indexes remains down, and growth funds and individual stocks are in the same boat. Until some of that changes, it’s telling you the bulls are swimming upstream, so it’s best to be defensive. However, we also don’t want to ignore many secondary measures that are showing some encouraging action, including the indexes holding above their recent lows and increasingly negative sentiment. The pieces are in place for some sort of turnaround, but we’ll have to see it happen before taking action.


This week’s list is again heavy in commodity-type names, though a few other areas popped up as well. For our Top Pick, we’re going with a growth-y name that’s holding well—it’s probably the best-looking non-commodity stock in the market today.

After a three-week rally, stocks hit resistance at logical levels, with the indexes backing off … though they still remain nicely above their January lows. It’s possible we’re starting a re-test phase, with the major indexes and many stocks set to attack their January lows. But, really, we’re less concerned with gaming out the daily action than with sticking to the overall evidence—until proven otherwise, the trends of the major indexes, of growth-oriented funds and of most stocks is pointed down, so we advise remaining generally defensive and patient as we allow more stocks to build bottoms and form legitimate setups.



That doesn’t mean, however, that the wheat isn’t starting to separate from the chaff among individual stocks. This week’s list has a bunch of stocks that have shown some great-volume accumulation during the past two or three weeks, though our Top Pick is a solid long-term setup ahead of earnings.

There are five growth stocks in our Cabot Undervalued Stocks Advisor portfolios that offer dividend yields in excess of 5%. That’s crazy! Stocks with rising profits in combination with very large dividend yields are generally uncommon, and can indicate an extreme undervaluation of those companies’ share prices. Dividends can tell you a lot about a company, or about the broader stock market. I cover the dividend topic in more detail in today’s issue.

This year has been about as choppy and tricky as we can remember, so nothing the market would throw at us from here would come as a surprise. That said, there’s no question the snapback of the past couple of weeks has been very encouraging—the major indexes have rebounded beautifully, with many regaining their 50-day lines, and individual stocks (especially growth stocks) have done great, with more and more moving back to (or out above) their prior highs. We also like that the bounce has been broad, with the on-again, off-again, rotational action taking a backseat to outright buying. Obviously, the market isn’t totally out of the woods, as most indexes are still range-bound and earnings season is upon us, which will often change the trajectory of things. But we always go with what we see, and the odds are increasing that the September/early October correction is over. We’re moving our Market Monitor back up to a level 7, and could go higher than that if the good vibes continues.

This week’s list represents the broad advance of late, with stocks of all different spots and stripes making the cut. Our Top Pick is Zscaler (ZS), which has lifted to new price and relative performance highs after a six-week pullback.

Stock Name	Price	Buy Range	Loss Limit
Atlassian (TEAM)	415	392-405	360-365
Cameco Corporation (CCJ)	26	25-27	21.5-22.5
Continental Resources (CLR)	52	49-51	42.5-43.5
Datadog (DDOG)	157	152-158	135-138
MGM Resorts (MGM)	48	47-48.5	42.5-43.5
Range Resources (RRC)	24	21.5-23	18.5-19
Snowflake (SNOW)	338	322-333	286-292
Tesla, Inc. (TSLA)	870	845-865	760-770
XENE (XENE)	31	29.5-31.5	25-26
Zscaler (ZS)	301	292-302	262-268

The big event last week for the market was that, by our measures, the intermediate-term trend of the major indexes and many growth funds turned up, which is enough for us to extend our line a bit—but, at this time, just a bit, as there remain many headwinds, including the longer-term trend and (very important) the lack of upside breakouts quite yet. That tells us to go slow and keep our eyes peeled for further upside confirmation—if we see that, we’ll continue to put more money to work in fresh leaders, but should the nascent rally hit a wall, we’ll hold off. For now, we’ve nudged our Market Monitor up to a level 4 and will take it day by day from here.


This week’s list has a bunch of names that have shown solid power of late, though most do report earnings within the next two or three weeks, so be sure to keep things small and aim for dips.. Our Top Pick is an innovative software firm whose stock is actually tightening up after a good-looking bottoming process.

Welcome to our TOP PICKS issue! For this issue, I asked the Cabot analysts to give me a couple of their top picks for 2024. I hope you will be pleased with the diversity—market-cap and sector-wise—that the analysts have offered.

But first, let’s talk about the market.

One common market saying is that rotation is the lifeblood of a bull market, but that’s only partly true: If the rotation sees leaders pull in normally while buying pressures broaden out, that is a good thing, giving the market a stronger foundation for future gains. But if the leaders crack intermediate-term support while money chases beaten-down titles, that can lead to trouble as the market (and those laggards) often end up following the leaders lower. Happily, so far, the rotation that began in late June and has carried on since has been more in the former camp. While we’ve pulled in our horns a bit, we remain overall bullish. We’ll move our Market Monitor to a level 7 and see how things go from here.

This week’s list definitely has a value and turnaround flavor, following along with some of the rotation seen in recent weeks. Our Top Pick reacted well to earnings last week (heaviest daily volume since 2020!) after management reinstated bullish guidance. Start small and add on the way up.