Stock market futures sold off overnight, the open was not looking good, but here we are at 2:37pm EST and the S&P is up 0.22%. "Churning” is the word I will use to describe what is happening right now as the market looks to find a bottom amidst the tariff tantrum.
As I mentioned in my prior post, it feels as if much of the bad news may be already priced in. Based on the VIX, MACD and RSI, the market has been in oversold territory since Friday and history served itself by providing us with the relief rally we are seeing today.
A near-term bottom may have formed if the market can close in the green - ideally within the 5010 to 5060 range as it will result in a nicely sized green candlestick (see image above).
Stocks To Buy
I plan to start building out a new and improved portfolio using the following methodology:
Top down approach - I will examine and follow the various market sectors (see above) over the next few days to assess what it is telling us. As of now, you can see that Tech is significantly outperforming but much of that is likely due to the fact that it’s sold off the most versus other sectors. Sectors that should continue to outperform in this climate are consumer staples, healthcare and utilities.
Bottoms up approach - I will be using the Signals platform to scan for Buy signal opportunities based on the C-Score, which indicates bullishness of a stock based on the underlying real-time data.
Filters - we will then apply the following filters to ensure we select the best oppportunities:
Does the company offer a product or service that is a “need to buy” and/or do they have a loyal customer base?
Does the company exist in a category that is growing in which they are gaining market share vs competitors?
Does the company have exposure to tariffs?
Watch List: Stocks
Based on the above, I have created a current watch list of names that I will be looking into (in no particular order):
US
Dell Technologies (DELL)
Marathon Petroleum (MPC)
United Health (UNH)
Sweet Green (SG)
Domino’s Pizza (DPZ)
Wingstop (WING)
Papa John’s Pizza (PZZA)
Dollar Tree (DLTR)
Amazon (AMZN)
Five Below (FIVE)
Extra Space Storage (EXR)
DoorDash (DASH)
Broadcom (AVGO)
Carnival (CCL)
International
Alibaba (BABA)
Xpeng (XPEV)
Watch List: ETFs
QQQ (Nasdaq 100)
MAGS (Magnificent 7)
VIG (Vanguard Dividend Appreciation)
SCHD (Schwab US Dividend Equity)
GLD (SPDR Gold Trust)
KWEB (KraneShares CSI China Internet)
I will report back with a more formalized and detailed list later this week.
Derrick
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