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US Markets - Growth - February 15, 2018
US Markets Update
Volume 2, Issue 3
February 15, 2018
Download PDF Version here
Items of Interest:
- The S&P 500 Growth ETF (IVW) has declined 8% from when we last wrote about it in our January 29th report where we highlighted the very extended nature of the index from its long-term average and where one should consider trimming extended names.
- With the intra-week low bouncing off the 40-week average, the IVW has recovered the lower regression channel and is in the retracement zone of 50% to 61.8% from where we often see a pullback starting from.
- We believe there needs to be more of a back and fill before we go much higher and would look at the $156—$158.50 area for signs of a stall.
- In the following pages, we are highlighting 56 of the top scoring stocks in the IVW based on our multi-factor model. What you will see with ALL of these stocks is that we do NOT have multi-month distribute tops in place, but we do have stocks that needed to pullback from extended levels.
- The chart of HCN which has a distributive top in place and broke down from its topping pattern in December. This is an example of what we don’t have in the charts that follow.
- Below is a list of the stock charts in this report.
- The current chart if IVW highlights the retracement area after recent selloff.
|ADOBE SYS INC||Software||EBAY INC||Internet Software & Services|
|V||VISA INC||IT Services||FISERV INC||IT Services|
|SPGI||S&P GLOBAL INC||Capital Markets||HUMANA INC||Health Care Providers & Services|
|MA||MASTERCARD||IT Services||ROYAL CARIBBEAN||Hotels, Restaurants & Leisure|
|ROPER TECHNOLOGIES||Industrial Conglomerates||COMERICA INC||Commercial Banks|
|TOTAL SYS SVCS INC||IT Services||BEST BUY INC||Specialty Retail|
|UNITEDHEALTH GROUP||Health Care Providers & Services||ANSYS INC||Software|
|MICROSOFT CORP||Software||BA||BOEING CO||Aerospace & Defense|
|SALESFORCE COM INC||Software||TEL||TE CONNECTIVITY LTD||Electronic Equipment & Instruments|
|MOODYS CORP||Capital Markets||WYN||WYNDHAM WORLDWIDE||Hotels, Restaurants & Leisure|
|NORTHROP GRUMMAN||Aerospace & Defense||CATERPILLAR INC DEL||Machinery|
|INTUIT||Software||KEYCORP NEW||Commercial Banks|
|HARRIS CORP DEL||Aerospace & Defense||SMITH A O||Building Products|
|L3 TECHNOLOGIES INC||Aerospace & Defense||NETAPP INC||Computers & Peripherals|
|NVIDIA CORP||Semiconductors & Semiconductor Equip.||INTUITIVE SURGICAL INC||Health Care Equipment & Supplies|
|XYL||XYLEM INC||Machinery||ALIGN TECHNOLOGY INC||Health Care Equipment & Supplies|
|ETFC||E TRADE FINANCIAL||Capital Markets||MONSTER BEVERAGE||Beverages|
|SCHW||SCHWAB CHARLES||Capital Markets||WATERS CORP||Life Sciences Tools & Services|
|CME GROUP INC||Capital Markets||ZTS||ZOETIS INC||Pharmaceuticals|
|ACCENTURE PLC IRELAND||IT Services||HILTON WORLDWIDE||Hotels, Restaurants & Leisure|
|AMAZON COM INC||Internet & Direct Marketing Retail||ACTIVISION BLIZZARD||Software|
|NETFLIX INC||Internet & Direct Marketing Retail||THERMO FISHER||Life Sciences Tools & Services|
|MARRIOTT INTL INC NEW||Hotels, Restaurants & Leisure||AETNA INC NEW||Health Care Providers & Services|
|RED HAT INC||Software||AVERY DENNISON||Containers & Packaging|
|EW||EDWARDS LIFESCIENCES||Health Care Equipment & Supplies||BF.B||BROWN FORMAN CORP||Beverages|
|GLOBAL PMTS INC||IT Services||GALLAGHER ARTHUR||Insurance|
|LOCKHEED MARTIN CORP||Aerospace & Defense||RESMED INC||Health Care Equipment & Supplies|
|RAYTHEON CO||Aerospace & Defense||A||AGILENT TECHNOLOGIES||Life Sciences Tools & Services|
Blow is the chart we used in our January 16, 2018 report with the “Items of Interest” note:
- The S&P 500 Growth ETF is very extended from its long-term average, but we don’t have divergence as we had in 2015.
- Attached, we display 16 constituents that are very deviated from trend and should be considered as trims.
This is the current chart of the IVW
- We need to see signs of stalling as the IVW retraces sharply off the 40-week average
- A broader based buying opportunity will present itself as the index backs and fills from this short-term volatile move up
- For now, long only managers should stay focused on those stocks with firm absolute and relative uptrends in place and avoid names such as HCN.
- In the following pages we highlight a large basket of those names.