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Stocks took their second step back in the past three days on Thursday, as investors wait to see if Washington can keep the government from shutting down over the weekend. Nevertheless, the market only gave back a fraction of the gains that were made on Wednesday.
For example, the Dow slipped almost 100 points in today’s session, but that was less than a third of yesterday’s rally while the index managed to stay above the recently-eclipsed 26,000 milestone. It was down 0.37% to 26,017.8. The NASDAQ spent a decent amount of time on positive ground, but eventually finished with a slight decline of 0.03% to 7,296.1. The S&P was off 0.16% to 2798, though it too was momentarily in the green.
“Both bulls and bears are waiting to see what happens (in regards to a government shutdown) Friday before they pull the trigger, as trading on rumors in this type of situation can cost you dearly,” said Jeremy Mullin in Counterstrike.
In the portfolios, Brian Bolan added to both of his services on Thursday, picking up a biotech in Stocks Under $10 and a short-term semiconductor play in Technology Innovators. Also, Momentum Trader sold a position for a double-digit return. Learn more in the highlights section below:
Today's Portfolio Highlights:
Momentum Trader: Sometimes an editor will book profits on half of a position and let the rest run, and other times its best to sell the whole thing. In the case of HollyFrontier (HFC), Dave thinks this petroleum refiner has given all it can for the time being. No investor likes to wake up in the morning and discover that a stock should have been sold the day before. Therefore, Dave exited all of HFC on Thursday and made nearly 30% in about two-and-a-half months.
Stocks Under $10: When it comes to biotech investing, its usually not about what the company is making right now. Instead, it’s more about the pipeline of drugs and whether they will work or not. In other words, they are positions that can be several months in the making. Case in point, the portfolio’s addition of Syndax Pharma (SNDX). The company has yet to post any revenues, but it is a Zacks Rank #2 (Buy) that has beaten earnings estimates the last four quarters. However, Brian Bolan is really waiting for trial data on the company’s drugs set to be released in a few months. Plus, a brokerage firm recently set a price target of $40 for SNDX. The editor is willing to take a chance on this biotech and added it to the portfolio on Thursday. Learn a lot more about this new addition in the full write-up.
Technology Innovators: Yesterday, the portfolio teased that there might be a “super short-term” trade for a company with a “super close” earnings announcement. Without further ado, the stock that Brian Bolan was talking about is Mellanox Tech (MLNX), a semiconductor play that reported after the bell today. This Zacks Rank #1 (Strong Buy) is part of a space in the top 38% of the Zacks Industry Rank. The editor feels pretty good about adding this name due to the strong moves from ICHR and ESIO, and reiterates that this is intended to be a quick trade (maybe only a day or two). Read more about this new addition in the full write up, including an activist play that could impact the stock.
Options Trader: “It appears that Congress will try and pass a Continuing Resolution, kicking the can down the road for another couple of weeks. We shall see. But the issues that continue to create a fissure in this process, i.e., DACA and border security, will have to be dealt with eventually. If that means sooner rather than later, or later rather than sooner, then so be it. The market just wants to know when the next manufactured crisis will be.
“Overall, the economy continues to strengthen, the benefits of the tax cuts are already starting to be felt, and corporate profits are surging and expected to only get better.
“Any volatility due to a potential spending bill snafu should be short-lived. So be prepared to act if we see a pullback. And if we don’t see a pullback, be prepared to act anyway, as this year is shaping up to be a historic one!” – Kevin Matras
All the Best,
Jim Giaquinto
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