Institutional investors appear to have taken last week off and so attempting to read much into it would just be inane, wedging action notwithstanding. Sentiment has gotten pretty negative, however, which makes me wonder about whether any imminent negative reversal really could be in the cards. It may take some time – that is, if it happens at all.
While the evidence up to this point indicates that this past week was nothing more than a “short-covering” snap-back, it is important to take nothing for granted and to at least admit the possibility that we could run even higher from here. Again, warding off biases is part of the job description.
So with that in mind, here is a list of stocks that, while certainly not perfect, are either basing, holding up well, or that have already broken out:
OPEN
ASPS
PRAA
VIT
VQ
UCTT
MGA
NFLX
VMW
BRKB
ROVI
TIBX
CMG
CRM
RVBD
FNSR
APKT
The strongest stocks tend to run in groups, so I’ll also include a partial list of these:
“Retail/Whlsle-Auto Parts”
AZO
AAP
“Internet-Network Sltns”
AKAM
ARUN
FFIV
LOGM
SPRT
“Elec-Semicondctor Fablss”
ALTR
NETL
CAVM
AVGO
OVTI
CRUS
GSIT
ARMH
“Medical-Products”
CYBX
MEND
THOR
VASC
“Medical-Ethical Drugs”
VRX
NVO
AZN
SLXP
JAZZ
“Comml Svcs-Healthcare”
HMSY
RURL
“Mining-Gold/Silver/Gems”
NEM
EGO
GOLD
“Computer-Data Storage”
NTAP
ISLN
“Computer Sftwr-Medical”
SXCI
MDAS
“Internet-Content”
BIDU
ACOM
WBMD
“Energy-Solar”
STRI
JKS
If this market has anything going for it, it’s that nobody believes it can rally; while this is hardly reason to get long here, it is something to consider should you find yourself itching to short something beyond all recognition.
Still, the short targets remain the same:
V
MA
BUCY
PCLN
AFL
GOOG
CTRP
GMCR
GS
JPM
AMZN
AAPL
FSLR
Having achieved over an 83% return since early May by working exclusively on the short side, I have since covered all my short positions; unfortunately, I did this in too pedestrian a way and it ended up costing me a few percentage points more than I would have liked. The account is now up 69% for the year. As they say, you live and you learn.
Earnings are upon us, so stay alert!
Disclosure: Long: VMW, BRK.B