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Which stocks should we buy during the holidays?
The conventional wisdom is, buy growth stocks, think IBD50, then focus on the individual names that are working. With that in mind, we can also look at the stocks that hedge funds have as their top tier positions. We like these stocks with IBD50 rankings as well.
AMAT AMZN FB JD MU NVDA NFLX
No surprise here, as institutions have these names in their core portfolios as of the latest 13F filings. With this in mind, we are also looking for stocks that are holding up well (above 9/20ema and 50ma) plus showing better than average sales and earnings growth. Since most of these stocks are registering better than 30% earnings growth and trade near their highs, we are looking for stocks consolidating recent gains, that are making ready for the next leg higher.
NFLX fits the criteria.
Last night we ran a Bollinger Band TTM Squeeze scan. This finds stocks ready to break out in the short term, once volatility increases and the moving averages start to turn. Then we rank those stocks with stellar IBD rankings. (IBD50)
Technically speaking, NFLX is consolidating inside its VBP support (look left) histogram, where a move above 197.50 potentially an area where bears would lose their grip. RSI is oscillating above 50, so we’ll watch for a turn higher.
MACD is turning as well, signaling the bears have already lost this fight to hold the stock down. Stochastic is rising and volume is beginning to show its effect. We will most likely add to this position if this continues.
Additionally, little nuances like wicks at the lows of each daily candle suggest buyers are stepping up. These buyers have shown their presence, coming in at the low of the day above 190.00 (+/-). If we see more evidence of this buying, the pivots high in July and September will have created a support level to respect going forward. Check your weekly charts as well.
We are also watching and trading, AAPL and BBY.
Most of the stocks that are holding up were highlighted above. We will most likely add to these in this shortened trading session. Apple is trading at all-time highs this morning. Wildcards like BZUN are trading post-earnings. We are watching for similar price action as the previous reporting period, when the stock got knocked down to the 26.00 zone, only to rise to 40.65 in the subsequent weeks. Earnings were better than expected, so we think the stock will rise again, looking for an opportunity.
Happy Black Fry-Day