Stock Trends

Things are getting a bit crazy out there

Good morning,

As I like to frequently remind people, part of what I want to do in these pages is make advisors and investors aware of the market environment from the bottom up.

Of course, we always want to have actionable ideas, and as highlighted Monday, those have been working out especially well. And Tuesday’s Overtime report provided additional long ideas outside of our ETF model and Blue Chip Hot List holdings.

But the primary thing that stands out to me going chart by chart is just how many stocks have gone absolutely parabolic. And I’m not just talking about Tesla or Microstrategy or a high-growth cybersecurity name like Fortinet. I’m talking household names moving in a way we haven’t seen since the euphoria of 2020-2021.

However, at the same time, an increasing number of stocks are breaking down to multi-month lows. We looked at this divergence on Monday and today I’ll show you some of those stocks that you should continue to avoid.

Finally, I’ll provide some updates on the Blue Chip Hot List.

Let’s get into it!

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Bang! (at the individual stock level)

Amazon has decisively broken out

Amazon cleared its July highs after initially failing to do so on its earnings jump. This is now blue skies for one of the market’s largest stocks that has done nowhere in 3 years. Bullish.

Look at this move in Salesforce!

Salesforce is the top holding in the IGV ETF held in our ETF models, so while we’ve joked about the performance since being added to the Dow, I’m glad to see it finally doing something. CRM is now out of a 3-year cup and handle pattern and if this stock is above $313, you do not want to be underweight software stocks.

Big base breakout for Zoom Video

Speaking of software stocks, things are so good that Zoom Video is breaking out. I noted bullish developments on September 5 when the stock was at $68. It’s now closing in on the $90 measured target.

Cintas at the top of its uptrend channel

Cintas has been one of 2024’s best trends, but we’ve had a few Mailtime requests on the stock and I wanted to point out that the stock has hit the top of its uptrend channel. That, combined with a recent 10% above the 50-DMA reading, suggests the stock is likely due for at least a pause.

Cummins up 25% in the last 2 months

CMI’s “sweet looking base on base” was featured on August 22 and the stock delivered in a big way. Industrials have been one of the biggest beneficiaries of the post-election bump.

We’ll top that. Morgan Stanley up 38% in the past 2 months