Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.

Stock Pick Update: January 29 – February 4, 2020

Paul Rejczak , Sunshine Profits
1 Comment| January 29, 2020

{{labelSign}}  Favorites
{{errorMessage}}

Let’s check which stock could magnify S&P’s gains in case it rallies, and which stocks would be likely to decline the most if S&P plunges. Here are our stock picks for the Wednesday, January 29 – Tuesday, February 4 period.

The Stock Pick Update for the Thursday, January 22 – Tuesday, January 28, 2020 period resulted in a loss of 0.54%. The S&P 500 index has lost 1.62% in the same period. So our stock picks were relatively stronger than the broad stock market. Just imagine what long-term advantage we would have when stocks enter a more prolonged downward correction!

Below we include statistics and the details of the previous updates. Only the updates for week-long periods since December 24 are verified by the alert’s release on our website, but before we decided to make it available to you, we tested our approach and our stock picks performed very well:

  • Jan 28, 2020
    Long Picks (Jan 22 open – Jan 28 close % change): HFC (-2.67%), DD (-6.12%), BEN (-2.34%), XLNX (-3.60%), DIS (-4.21%)
    Short Picks (Jan 22 open – Jan 28 close % change): AAPL (-0.28%), FB (-2.03%), HST (-4.09%), COP (-4.11%), WRK (-3.00%)
    Average long result: +3.87%, average short result: -2.61%
    Total profit (average): +0.63%

  • Jan 21, 2020
    Long Picks: DD, CINF, CHD, CSCO, CTL
    Short Picks: AMD, FB, IRM, SHW, COF
    Average long result: +3.87%, average short result: -2.61%
    Total profit (average): +0.63%

  • Jan 14, 2020
    Long Picks: VTR, COST, ECL, COG, CSCO
    Short Picks: PXD, AMD, VFC, AVB, PEP
    Average long result: +1.42%, average short result: +0.79%
    Total profit (average): +1.10%

  • Jan 7, 2020
    Long Picks: GD, CHRW, CTL, CLX, CSCO
    Short Picks: PM, ANSS, HST, JCI, EA
    Average long result: -1.15%, average short result: +0.97%
    Total profit (average): -0.09%

  • Dec 24, 2019
    Long Picks: VTR, CHRW, CF, IDXX, CINF
    Short Picks: LLY, MS, AES, DRE, AME
    Average long result: +1.12%, average short result: -1.31%
    Total profit (average): -0.10%

  • Dec 17, 2019
    Long Picks: WMT, FAST, SEE, ZTS, SLB
    Short Picks: BMY, PSX, SST, LW, EMR
    Average long result: +2.45%, average short result: -1.69%
    Total profit (average): +0.38%

  • Dec 10, 2019
    Long Picks: PSA, OXY, DE, ILMN, TTWO
    Short Picks: ZTS, DIS, LW, WELL, PSX
    Average long result: +0.87%, average short result: +1.30%
    Total profit (average): +1.08%

  • Dec 03, 2019
    Long Picks: PSA, EXC, FANG, ILMN, FLT
    Short Picks: ABBV, NVDA, CHTR, WELL, AEP
    Average long result: -0.03%, average short result: +1.55%
    Total profit (average): +0.76%

  • Nov 26, 2019
    Long Picks: VTR, YUM, HAL, ADI, CME
    Short Picks: MSFT, JPM, ABT, WELL, LOW
    Average long result: +1.89%, average short result: -0.50%
    Total profit (average): +0.69%

  • Nov 19, 2019
    Long Picks: PSA, DUK, EBAY, MMC, MMM
    Short Picks: C, CAT, TXN, PLD, SO
    Average long result: 1.08%, average short result: -1.50%
    Total profit (average): -0.21%

Click to enlarge

The broad stock market has reached historically high levels recently. The breathtaking correction in December of 2018 was followed by the record-breaking comeback rally. The late October – early November breakout led to another leg higher, as the S&P 500 index broke above the 3,300 mark. But will the rally continue? If the market goes higher, which stocks are going to beat the index? And if it reverses down from here, which stocks are about to outperform on the short side?

We will provide stock trading ideas based on our in-depth technical and fundamental analysis, but since the main point of this publication is to provide the top 5 long and top 5 short candidates (our opinion, not an investment advice) for this week, we will focus solely on the technicals. The latter are simply more useful in case of short-term trades.

We will assume the following: the stocks will be bought or sold short on the opening of today’s trading session (January 2) and sold or bought back on the closing of the next Tuesday’s trading session (January 7).

First, we will take a look at the recent performance by sector. It may show us which sector is likely to perform best in the near future and which sector is likely to lag. Then, we will select our buy and sell stock picks.

There are eleven stock market sectors: Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Technology, Communications Services, Utilities and Real Estate. They are further divided into industries, but we will just stick with these main sectors of the stock market.

We will analyze them and their relative performance by looking at the Select Sector SPDR ETF’s.
Let’s start with our first charts (charts courtesy of www.stockcharts.com).

Click to enlarge

Click to enlarge

There’s S&P 500’s 30-minute chart along with market sector indicators for the past month. The S&P 500 index has gained 1.13% since December 27. The strongest sector was the Utilities XLU, as it gained 6.67%. The Technology XLK gained 5.44% and the Real Estate XLRE gained 4.20%.

On the other hand, the weakest sector was the Energy XLE, as it lost 8.09%. The Materials XLB lost 3.70%, and the Financials XLF lost 1.85%.

Based on the above, we decided to choose our stock picks for the next week. We will choose our top 3 long and top 3 short candidates using a contrarian approach, and top 2 long and top 2 short candidates using the trend-following approach:

Contrarian approach (betting against the recent trend):
  • buys: 1 x Energy, 1 x Materials, 1 x Financials
  • sells: 1 x Utilities, 1 x Technology, 1 x Real Estate

Trend-following approach:
  • buys: 1 x Utilities, 1 x Technology
  • sells: 1 x Energy, 1 x Materials

Contrarian approach
Top 3 Buy Candidates

SLB Schlumberger Ltd. - Energy

Click to enlarge

The SLB stock has been trading within a strong downtrend recently. The stock is one of the most technically oversold in its sector. So it is our upward correction play. If the market bounces of a support level of around $33.5, it could get back to the previously broken support level of $35.5-36.0.

VMC Vulcan Materials Co. - Materials

Click to enlarge

The Vulcan Materials Co. stock trades within a medium-term consolidation. But we can see a month-long wedge pattern and the market could break higher out of it. The nearest important resistance level is at around $144-145.

WFC Wells Fargo & Co. - Financials

Click to enlarge

The WFC stock was extending its downtrend recently. However, we can see a bottoming wedge pattern along with some positive RSI indicator divergence and the oversold condition. So it is another upward correction play in our Stock Picks portfolio.

We hope you enjoyed reading the above free analysis, and we encourage you to read today's Stock Pick Update - this analysis' full version. There, we include the remaining long and short stock picks for the next week. There's no risk in subscribing right away, because there's a 30-day money back guarantee for all our products, so we encourage you to subscribe today.

Check more of our free articles on our website – just drop by and have a look. We encourage you to sign up for our daily newsletter, too - it's free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to our premium daily Gold & Silver Trading Alerts. Sign up for the free newsletter today!

Thank you.

Paul Rejczak
Stock Trading Strategist
Sunshine Profits - Effective Investments through Diligence and Care


* * * * *


Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Tags:

{{labelSign}}  Favorites
{{errorMessage}}

Comments

No comments yet. Be first to comment!

Leave a Comment

You must be logged in to be able to post a comment.