The weekend didn't soothe the market’s tech troubles, as the major indices started the week in the red with the NASDAQ, unsurprisingly, taking the worst pounding. The once seemingly untouchable FANGs (Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Google parent Alphabet (NASDAQ:GOOGL)) are acting more like normal stocks these days as they were all lower again on Monday. And it doesn’t help when other technology powerhouses like Apple (NASDAQ:AAPL) get downgraded.
The major indices managed a bit of comeback in the last hour or so, but were unable to get above breakeven. The S&P was down 0.10% to 2429.4 and the Dow declined 0.17% to 21,235.7. But most eyes were on the tech-heavy NASDAQ, which was off by 0.52% to 6175.5 (far better than the nearly 2% loss on Friday).
But the editors are not very worried by this “tech wreck”, which could only mean one thing: Buying Opportunity! “Many times we have seen these sharp moves lower, only to be bought up in the days afterward, so investors have no need to panic,” said Jeremy in Counterstrike. The portfolios surely aren’t panicking...instead, they’re adding positions. The week started with a very active session from the editors. Take a look at their moves in the highlights section below:
Today's Portfolio Highlights:
Reitmeister Trading Alert: What the portfolio needs right now is a large cap that can provide some needed balance against the many other Risk On positions. So Steve added Masco (MAS) on Monday, which also gives RTA exposure to the still improving housing market. The editor likes its steady earnings growth, continued strong outlook and that its diversified portfolio protects from weakness in any one area. He expects MAS to move past $40 later this year. The complete commentary has more.
Zacks Counterstrike: One of the portfolio’s favorite setups is the Fibonacci long, which Red Robin Gourmet Burgers (RRGB) has fallen into after a solid quarterly report. The casual dining chain beat the Zacks Consensus Estimate by 53% last month and guided fiscal 2017 higher. Jeremy sees a lot of potential for growth with RRGB since it only operates in 18 states. More good news could send this heavily-shorted name sharply higher, so the editor decided to front run the 50-day moving average with a 13% allocation. The complete commentary has more on this new buy and a look at its chart. By the way, Counterstrike also sold Quaker Chemical (KWR) today for a 6.4% return.
Momentum Trader: Regardless of how long this “tech wreck” continues, gold prices seem destined to move higher due to the USD/JPY weakness. Eventually, Dave believes that the Yen strength will boost gold prices through $1,300 to new highs. The editor took advantage by buying a 12.5% allocation in Agnico Eagle Mines (AEM), which pushed higher recently after a big beat last quarter. Earnings estimates are also on the rise. Get a breakdown of AEM’s chart in the full writeup.
Black Box Trader: RTA wasn't the only portfolio to add Masco (MAS) on Monday. The stock was also part of the four swaps in this week's adjustment of BBT. The positions sold from the portfolio today included:
• Aramark Holdings (ARMK, +7.9%)
• Sprouts Farmers Markets (SFM, +5.6%)
• Performance Food Group (PFGC) and
• Restoration Hardware (RH)
The four new stocks that were bought today to replace these names are:
• Masco (MAS)
• Caterpillar (NYSE:CAT)
• Cummins (NYSE:CMI) and
• Deere & Co. (DE)
Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Zacks Confidential: As far as this bull market is concerned, good things come in BIG packages. Actually, they come in MEGA packages! Usually, the smaller/riskier names are at the front of a bull market, but that hasn’t been the case for the past several years. Eric Dutram thinks these mega-caps will continue to lead the way, and Steve gives him the opportunity to explain in this week’s Zacks Confidential. Learn why the big guys are outperforming and get three ETF recommendations by clicking: Why Mega Caps Will Continue to Dominate
TAZR Trader: Kevin used this tech pullback to add a 7% allocation in Applied Materials (NASDAQ:AMAT), a top chip equipment provider that’s been a steady engine in a sky of high flyers. If the stock were to fall further to under $42, then the editor would be willing to add even more. Learn more about this new addition, and find out why Kevin has put Applied Optoelectronics (AAOI) “on watch.”
Home Run Investor: A big part of Dave would love to go on a technology spending spree right now, but he already has a lot of exposure to the space. So he only added a position in Control4 (CTRL) on Monday, which provides home automation and should be a big beneficiary as the Internet-of-things continues to go mainstream. It has put together three straight quarters of positive surprises. CTRL has pulled back a little bit during this tech wreck, but the editor expects it to be at new highs shortly. Learn more about this new addition and get ready to see even more action in Home Run in the days ahead.
Options Trader: "Big tech did seemingly get ahead of itself.
"Is it over?
"Hardly.
"But those Johnny-come-lately's into that space will probably remain underwater for a time. And not every name will break back thru the surface. But the best names will likely be back to their winning ways in time. And those looking for bargains should be grinning from ear to ear." -- Kevin Matras
Until Tomorrow
Jim Giaquinto
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