Health care stocks gave the market a boost on Thursday after the Senate’s plan was finally unveiled, but they weren’t able to get the S&P and the Dow over the finish line. Those indices ended slightly in the red by the closing bell, while the NASDAQ managed an equally slight advance to give the recently-struggling index its second straight day of gains.
The NASDAQ finished the session higher by 0.04% to 6236.7. It wasn’t a lot, but we’ll take what we can get amid tech struggles that saw the index take sharp losses over the past couple of weeks. Despite the good day for healthcare and a nearly 0.6% rise in oil, the S&P slipped by 0.05% on Thursday to 2434.5. The Dow was down 0.06% to 21397.3.
“Classic rotation day type results,” said Steve in RTA. “The best choice on consolidation days is to pay no attention to the noise, That is because just as likely tomorrow you will see the inverse of today’s action where our biggest winners become losers and vice versa.”
Again, there wasn’t a lot of action in the portfolios, though Zacks Counterstrike and TAZR Trader each added more than once. Momentum Trader also picked up a new position. The highlights section has more:
Today's Portfolio Highlights:
Zacks Counterstrike: Shares of Momo (MOMO) followed other Chinese stocks lower this morning on fears of live streaming regulations in that country. But Jeremy thought this selloff was unfair and that MOMO shouldn't feel an impact from such regulations. So the editor had a great opportunity to bring MOMO up to a “full” position by adding 4% more to the allocation. It now accounts for 16% of the portfolio. It turned out to be good timing since MOMO reversed course later in the session and finished on the plus side.
In other news, Jeremy also bought a 6% allocation in RV maker Thor Industries (THO). This position is a play on the retiring or retired baby-boomers, who are apparently hitting the road in their golden years as evidenced by strong quarterly reports from THO and rival Winnebago. Shares of THO have broken upward to all-time highs after beating the Zacks Consensus Estimate by 13%. The full commentary has more on both of these moves.
TAZR Trader: The portfolio made a trio of plays on Thursday. Kevin added a couple of richly-valued names with strong charts that he would increase on any pullbacks. The editor also added to an existing position. The buys include:
• Adobe (ADBE): This company recently reported a positive earnings surprise and offered an outlook that was ahead of expectations on both the top and bottom lines. It was added with a 7% allocation.
• Align Technology (ALGN): The company has a real winner with its Invisalign “smile straightener”, which should continue to be the industry standard even as new competition hits the marketplace. It was added with a 7% allocation as well. Furthermore, ALGN recently became a member of the S&P.
• Applied Optoelectronics (AAOI): This stock was a winner for the portfolio in May, and then was added again earlier this month. The editor believes AAOI is on its way to becoming a mid-cap and possibly $100 by December. He always said he would buy on any dips below $70, so he added to the position today.
Take a closer look at all of these moves in the complete write-up.
Momentum Trader: After taking a punch when the NASDAQ was struggling, shares of Inogen (INGN) have reversed course and broken out to new highs. This medical device company is now less than $5 away from being a $100 stock, and Dave thinks it will hit that mark and keep on going. The editor sold Brooks Automation (BRKS) on Thursday and used the proceeds to buy INGN. For more on this new buy, check out the complete commentary.
Surprise Trader: "And it looks like the Senate has released their version of the health care bill, and while it is largely similar to the House plan, there are a few key differences. Some of the most important include slashing of Medicaid funding between 2021 and 2024 (opposed to a 2020 start in the House bill), a lower funding growth rate for Medicaid starting in 2025, putting a cap on subsidies if you make more than $42,000 (the House had it at $47,000), and forcing companies to charge customers with pre-existing conditions the same as healthy individuals.
"Now comes the difficult part, actually passing the bill. Four senators have already come out against it on the GOP side, and they cannot afford to lose that many if they are going to pass the legislation. Many appear to be focused on the Medicaid cuts, and this looks to be a big sticking point for both the media and the actual members of the legislature. I am not so sure that this will be able to get the necessary votes, but let’s see what else comes out about it on Friday." -- Eric Dutram
Insider Trader: "Summer has officially arrived on the calendar and with it, that means slower trading days with not much going on.
"Today was one of those days. I feel like the next week will only get slower as the long Fourth of July holiday approaches. This year, the 4th is on a Tuesday, which means most employers will be giving employees that Monday off as well. So this year, there is really a 4-day holiday weekend coming up.
"The good news is that this bull market hasn't broken down. Even when it pulls back from the highs, it stays within 2% to 4% of the highs. That's bullish." -- Tracey Ryniec
All the Best,
Jim Giaquinto
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