It was going to take a strong performance on Friday to give the market its second-straight positive week since the sharp pullback. And we got it! The major indices each jumped by more than 1% today.
The NASDAQ hadn’t been on the positive side all week, but today it soared 1.77% on a strong day for technology to 7,337.4. The S&P jumped 1.60% to 2,747.3 and the Dow advanced 1.39% to 25,310. These latter two indices headed into Friday with losses of about 1% each.
So for the week, the NASDAQ rose 1.35%, while the S&P and Dow advanced around 0.55% and 0.36%, respectively. Those last two performances aren’t that impressive on their own, but it marks a solid comeback from what was turning out to be a frustrating week.
In the portfolios, Tracey was active in both her portfolios. She sold a position for a double-digit gain in Insider Trader, and then added a new stock that recently saw a cluster buy. The editor also cashed in two winners in Value Investor. Meanwhile, Momentum Trader added a retailer that’s on the comeback trail. Learn more about these moves in the highlights section below:
Today's Portfolio Highlights:
Insider Trader: The portfolio finished out the week with a couple of moves, including the sale of its oldest position. E*Trade (ETFC) had been in the portfolio since August, and Tracey still thinks the stock has room to run higher in 2018. But shares have stalled out of late, and the editor would rather move on to a new name. She sold ETFC for a positive return of about 25%.
The new addition is Encana (ECA), a Canadian exploration & production company. Shares are down about 20% year to date during this tough time for energy stocks. But the company has a strong balance sheet with a share buyback program and a 5-year plan to generate $3 billion in free cash flow. It also recently experienced a cluster buy, as the CEO and 3 directors bought shares. Tracey sees this as a signal that insiders believe the stock is undervalued. She added ECA today with a smaller-than-normal 5.6% allocation since the portfolio is at capacity. Read the full write-up for more.
Momentum Trader: Dave called Michael Kors (KORS) “one of the most vibrant dumpster fires of early 2017”. But that was then, and this is now. The global accessories, footwear and apparel company has really turned the corner of late. In fact, it is now a Zacks Rank #2 (Buy) that’s breaking out to the upside. The editor sees the stock’s pullback to $60 during the correction as an opportunity to get back in. Therefore, he picked up KORS on Friday with a 12.5% allocation.
Value Investor: Innospec (IOSP) and J2 Global (JCOM) are among the oldest positions in the portfolio…and Tracey still likes them both. But she’s got to get rid of them. They have each slipped to a Zacks Rank #5 (Strong Sell), and the portfolio’s strategy demands that the leave. However, they will both bank nice returns. IOSP is an international specialty chemicals company that brings a gain of more than 50%, while JCOM is a digital media/cloud play with a profit of 17.6%. These sells open up space for new additions, which will be coming next week. Read the full write-up for more.
Counterstrike: "Constructive day for the bulls as markets pushed significantly higher, breaking the recent afternoon sell off pattern. The S&P was up 1.6%, while the Nasdaq gained 1.77%.
"Bulls aren’t 100% in the clear. The Fibonacci 61.8% line for the S&P still remains intact and is right about where we closed. Next week will be the deciding factor, either the Fib breaks and we head higher or sellers come back in to sell the market back to 2700.
"I am impressed with the third bounce back to this area of 2750 in the S&P. Looking at the chart, I have to consider the possibility that the bulls continue to march higher. If this bear setup fails, that means S&P targets would be up around 3100. This is found by drawing the recent (all-time) highs to recent lows and targeting the 161.8% line. We'll see what will happen next week when Fed’s Powell testifies in front of the House Financial Services Committee on Tuesday." --Jeremy Mullin
Have a Great Weekend,
Jim Giaquinto
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