What a week! The S&P is now back at all-time highs along with the Dow, and the NASDAQ has put together a six-session winning streak. Steve said it best today in RTA:
“Friday’s action has all the markings of a modern breakout.”
The S&P ended the day with a 0.47% advance to a new peak of 2459.3, while the Dow completed its third straight all-time finish with an increase of 0.39% to 21637.7. The NASDAQ is just a step behind its own record after a 0.61% advance to 6312.5. Earnings season kicked off with a bunch of banks reporting before the bell, such as JP Morgan, Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C), among others. The news was fine, but the financials, nonetheless, had a rough session.
The NASDAQ rallied throughout the week and finished with a gain of 2.6%. The S&P jumped 1.4% this week and the Dow advanced 1%.
So now the market heads into earnings season with a lot of momentum, which means we’ll be seeing more activity from the portfolios. The editors have been quiet the past few days, but they sprung into action on Friday with new buys for RTA, Healthcare Innovators and Zacks Counterstrike. And you can get ready for four buys from Surprise Trader on Monday, as earnings season starts getting into gear. For now, take a look at today's highlights below:
Today's Portfolio Highlights:
Reitmeister Trading Alert: Delta Air Lines (NYSE:DAL) missed earnings expectations in its quarterly report yesterday...so Steve wasted no time in picking up this stock for the portfolio. What? From an investment perspective, it was the perfect kind of earnings report because the slight miss was due to ‘one-time items’ that didn’t keep DAL from increasing its guidance. The stock sold off, which means Steve was able to buy a 7.2% allocation in a long-term earnings winner at a discount. He thinks this approximately $55 stock can get to $65-$75 on the current earnings picture. By the way, the portfolio also sold Anixter Int’l (AXE) today for a 1.9% return. The full write-up has more specifics on all of today’s moves.
Healthcare Innovators: Just last night, the FDA Fast Tracked two pipeline programs of Sangamo Therapeutics (SGMO), which is a big name in genomic therapies. This announcement gives Kevin the opportunity to finally add a company that he has appreciated for years due to its fundamental outlook, especially its partnership with Pfizer (NYSE:PFE). The editor thinks SGMO is destined to be a $20 stock, so anybody buying in at around $10 could see their investment double. Read the full write-up for more on this new addition and for a link to the press release on the FDA’s recent action.
Zacks Counterstrike: The aggressive sell-off of Ulta Beauty (ULTA) really caught Jeremy’s attention. This beauty products staple has been one of the few bright spots in brick-and-mortar retail, but it has recently plunged to the $260s from over $300. However, the editor believes that ULTA is being punished for valuation problems in its industry as a whole, rather than in the company itself. A closer look shows that earnings estimates are still trending higher for ULTA and, more importantly, the stock has pulled into a Fibonacci long setup. The editor thinks this stock is moving higher again and bought a 12% allocation. He also sold a third of Potash (POT) for a nearly 7% return. Read the full write-up for more.
Momentum Trader: "This morning I was chatting with some folks online and I mentioned “Thin to win.” That’s something I picked up from an old trader buddy of mine. There are days like this, especially Fridays and in the summertime, where the market drifts higher all day on light volume. Hence the term, “Thin to win.” There’s no presence of any real selling pressure and the market finds itself slowly drifting higher on light volume.
"I’ve got another phrase and that’s “A win is a win.” I’ll take thin to win or fat to win or any other size win as long as it’s a victory and that’s exactly what we got today.
"Good bank earnings this morning but they still dropped at the open. The rest of the day the bulls chased them higher. With the market at all-time highs we can ride off into the weekend on a high note. Not bad for summer doldrums." -- Dave Bartosiak
Have a Great Weekend!
Jim Giaquinto
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