The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq are consolidating near all-time highs after accelerating the last two weeks. Distribution remains low with three days on the Nasdaq and two on the S&P 500. Leadership remains intact, with strong price action across multiple groups, including payment processors, med-tech, and software. We maintain a positive outlook on the market.
Tag: Confirmed Uptrend
US Focus Long
The U.S. market is in a Confirmed Uptrend. Indices are at all-time highs. Distribution is low with only three days on the S&P 500 and Nasdaq, with one day expiring on each index next week. Leadership remains constructive, with multiple groups and stocks breaking out into new highs. We maintain a positive outlook on the market and recommend buying or adding high quality stocks emerge from sound bases
US Focus Long
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq held support along their respective 50-DMA this week. Distribution remains relatively low at four days on the S&P 500 and three on the Nasdaq, with one expiring on the S&P 500 next week. Leadership remains mixed. There are a select few ideas that continue to trade at or near highs, however the majority remain rangebound, consolidating over the last several weeks. To remain positive, we need to see the 50-DMA continue to hold as near-term support over the next few sessions.
US Focus Long
The U.S. market is in a Confirmed Uptrend. Despite the pullback on Friday, the majority of growth ideas held up well, with multiple recent IPOs also breaking out into new highs. Further, small-cap indices, including the S&P 600 and Russell 2000, also held up well relative to the other major averages, indicating a further rotation into U.S.-based ideas. Overall, despite choppy market conditions, we maintain our positive view as the major averages remain above moving average support with a low number of distribution days
Market View
The U.S. market is in a Confirmed Uptrend. We will move the market back to Under Pressure should we see the Nasdaq
close below its 50-DMA next week. We are concerned with the action of leading ideas, which came under severe selling
pressure on Friday, resulting in the Nasdaq closing below its 21-DMA. Multiple names either pulled back sharply to their
respective 50-DMA or broke below that level post-earnings results. Earnings will continue to play a big role next week, with
another 25% of the U.S. Focus List reporting. We recommend a patient approach in the near term, waiting to see support
come back into the market over the next few sessions.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 68 ideas lost 1.8% on average this week, underperforming the S&P 500 (+0.6%) and the Nasdaq (-1.1%).
Actionable Focus List ideas: Diamondback Energy ( FANG ), Envestnet ( ENV ), Flir Systems ( FLIR ), Heico ( HEI ), Home Depot
( HD ), Nextera Energy Prtn Lp ( NEP ), Paypal ( PYPL ), RingCentral ( RNG ), Unitedhealth ( UNH ), Vertex Pharmaceuticals ( VRTX ).
USFL ideas weekly earnings line-up:
Monday: Open: ON; Close: ILMN
Tuesday: Open: FIS; Close: PAYC
Wednesday: Open: IDXX; Close: PRAH, SQ
Thursday: Open: GPN; Close: ANET, ATVI, FLT, RP, SSNC, WING
By Sector
All sectors pulled back sharply to close the week, led lower by Health Care. Multiple Medical Product ideas gapped down
post earnings, including ABMD, ALGN, and EW. ABMD and EW are now testing support around their respective 100-DMA,
while ALGN is still holding above its 50-DMA. IDXX and ILMN are also pulling back off extended levels ahead of earnings
next week. Technology ideas also sold off Friday. ATVI, MPWR, PSTG, VEEV, RP, and ADSK all broke back below their re-
spective 50-DMA. Retail ideas, which had been leading, all pulled back as well. LULU, OLLI, and HOME broke their respec-
tive 50-DMA on Friday, while FIVE and HD look set to test that same level in the coming days. Financial ideas held up the
best, despite selling off on Friday. SIVB, FLT, V, MA, FIS, SQ, and ENV all hit new highs this week before fading into Friday’s
close.
New Ideas or Deletions
We added Envestnet ( ENV ) and removed TAL Education ( TAL ) from the U.S. Focus List this week.
US Focus Long
The U.S. market is in a Confirmed Uptrend. We will move the market back to Under Pressure should we see the Nasdaq close below its 50-DMA next week. We are concerned with the action of leading ideas, which came under severe selling pressure on Friday, resulting in the Nasdaq closing below its 21-DMA. Multiple names either pulled back sharply to their respective 50-DMA or broke below that level post-earnings results. Earnings will continue to play a big role next week, with another 25% of the U.S. Focus List reporting. We recommend a patient approach in the near term, waiting to see support come back into the market over the next few sessions.
European Focus Long
This week through Thursday, the Stoxx 600 advanced 1.3% and is trading above its 10- and 40-WMA. The index remains in a Rally Attempt and we continue to wait for a follow-through day, which would signal a new uptrend. This week, we moved Germany and Luxembourg to a Rally Attempt and downgraded Italy to an Uptrend Under Pressure.
Market View
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq traded relatively flat this week, consoli-
dating the last two weeks of gains. The S&P 500 now has four distribution days with two expiring next week,
while the Nasdaq has six distribution days with three expiring next week. Leading ideas continue to show con-
structive action with multiple ideas hitting new highs despite sideways trade in the major averages. Earnings will
continue to play a big role over the next few weeks, driving market direction. Thirty-percent of the U.S. Focus List
reports next week, followed by 25% the week after. We maintain our positive view on the general market due to
a declining distribution day count and good technical action in the major averages and leading ideas alike.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 68 ideas gained 0.9% on average this week, outperforming the S&P 500 (+0.02%) and the
Nasdaq (-0.07%).
Actionable Focus List ideas: Activision Blizzard ( ATVI ), Arista Networks ( ANET ), Calavo Growers ( CVGW ), Dia-
mondback Energy ( FANG ), Fleetcor Technologies ( FLT ), Global Payments ( GPN ), Home Depot ( HD ), RingCentral
( RNG ), SS&C Technologies ( SSNC ), Unitedhealth ( UNH ), Worldpay ( WP )
USFL ideas weekly earnings line-up:
Monday: Close: GOOGL, ZION
Wednesday: Open: FLIR, GRUB, MKTX, NEP; Close: ALGN, MPWR, NOW, PYPL, V, VRTX
Thursday: Open: ABMD, MA, TAL; Close: AMZN, EW, SIVB, TEAM
Friday: Open: TYL
By Sector
Health Care ideas on the U.S. Focus List led this week. IDXX, ILMN, ALGN, PRAH, EW, and VRTX are all trading
at or near new highs. UNH pulled back post earnings, but found support at its 50-DMA. Banks also did well this
week, though most just held the lower end of support levels and are now attempting to build the right side of
new bases. TCBI and WAL reacted positively to earnings, while ZION and SIVB both report next week. After two
solid weeks of gains, Software ideas held up well with a handful moving back into new highs. ATVI, RNG, and
SSNC provided new buy points after breaking out of new bases, while RP and PAYC both regained their respec-
tive 50-DMA. Conversely, Energy ideas have lagged over the last few sessions. FANG remains above its 50-
DMA, however, WRD and CLR are now trading more than 10% off highs and around their respective 100-DMA.
US Focus Long
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq traded relatively flat this week, consolidating the last two weeks of gains. The S&P 500 now has four distribution days with two expiring next week, while the Nasdaq has six distribution days with three expiring next week. Leading ideas continue to show constructive action with multiple ideas hitting new highs despite sideways trade in the major averages. Earnings will continue to play a big role over the next few weeks, driving market direction. 30% of the U.S. Focus List reports next week, followed by 25% the week after. We maintain our positive view on the general market due to a declining distribution day count and good technical action in the major averages and leading ideas alike.
European Focus Long
As of Thursday’s close, the Stoxx 600 was up 0.3% on a weekly basis. It continues to trade above its 200-DMA and below its 50- DMA. It remains in a Rally Attempt. We continue to wait for a follow-through day, which would signal the start of a new uptrend. We made only one market status change this week: moving Sweden to a Rally Attempt on Monday.
