The only blemish on this impressive New Year’s rally came yesterday when the Dow closed with a tiny loss, breaking three straight days of all-time highs. But the index returned to the fold on Tuesday with an advance of 0.41% (or more than 100 points) to a new record of 25,385.8.
The other two major indices have yet to take a break in 2018. The S&P was up 0.13% today to 2751.3 and the NASDAQ advanced 0.09% to 7163.6. Both indices have now registered fresh all-time highs in each of the first six days of 2018.
Portfolio activity was on the light side this Tuesday, but that will change as earnings season is about to start. For today, Counterstrike had the most activity as Jeremy shorted one stock and added another. He also sold two names and banked positive returns. Meanwhile, Short List swapped out two positions. Learn more about these moves in the highlights section below:
Today's Portfolio Highlights:
Counterstrike: Busy day for the portfolio as Jeremy has finally found a stock to short. Shares of Tennant (TNC) marched into the mid $70s from the low $60s in the past couple of months. Yet, this cleaning solutions company is a Zacks Rank #5 (Strong Sell) due to lowered earnings estimates and has announced two terrible EPS reports in a row. The editor thinks TNC is heading back into the high $60s before its quarterly report next month, so he shorted it on Tuesday with a 13% allocation and plans to use limit orders.
But that’s not all. PetIQ (PETQ) is a pet medications company that had a hard time after its recent IPO, falling all the way to $17. Recently though, it provided a good guidance for fiscal 2018 and announced an acquisition. The market liked the news and sent the stock through its 50-day moving average. If it can get past $23.50, Jeremy says it will break its bearish hold and could be poised to get into the low $30s. He bought PETQ today with a 10% allocation. Read the full commentary for a lot more on these moves, and a look at the portfolio’s two profitable sells.
Zacks Short List: Only two swaps in this week’s adjustment. The portfolio short-covered Semgroup Corp. (SEMG, +7.3%) and Vertex Pharma (VRTX). It replaced these names by adding Akamai Tech (AKAM) and Schlumberger Ltd. (SLB). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Momentum Trader: “The market was on solid footing again today as the large caps of the Dow led the way higher. On the radar this month is a big earnings season which will help spell out what to expect for the rest of the year.
”While we’re all looking at equities and cryptocurrencies the bond market is beginning to move. Rates on the 10-Year Treasury note topped 2.5% for the first time in months which has some of us wondering if this is finally the year that rates make their move.
“While the rally is in full swing, logic dictates that interest rates should rise up a little bit. The last few years have been somewhat of an anomaly. However, when you think about it in terms of supply and demand, behavior in interest rates makes a lot more sense. Eventually market forces will show us what the new normal really should look like.” – Dave Bartosiak, who also manages the Surprise Trader.
Have a Good Evening,
Jim Giaquinto
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