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12 Monsters Stocks To Watch For the Week of September 24
MICHAEL KRAMER AND THE CLIENTS OF MOTT CAPITAL OWN SHARES OF AAPL, SWKS
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The week of September 24 will be a busy one for stocks, with the FOMC decision on interest rates on Wednesday afternoon, revised second-quarter GDP on Thursday, and inflation data on Friday. Then through in the UN General assembly in NY, and there are plenty of things that could potentially derail the stock market.
However, based on recent trends in stocks, the economy, and earnings, a derailment is unlikely. The market has effectively priced in a rate hike this week, and most likely another one for December. I still happen to think there are plenty of reasons for the Fed not to raise rates, but that doesn’t mean I’m not aware of the fact they most likely will raise rates.
Sector Rotations
Impressively the stock market has held up very well since the beginning of September rising by 1%, despite the “FANG” stocks down by about 2 percent or more.
That because the industrial, healthcare and material stocks have led the way. That is a pretty big reversal from what we have for most of this year.
These big pharmaceuticals companies have torn it up, Pfizer, Lilly, and Merck are up by more than 20% each this year.
The stocks that look like they have more upside, that hasn’t seen the big returns are Johnson and Johnson, and Bristol Myers.
Johnson and Johnson (JNJ)
Johnson and Johnson is approaching technical resistance at $145, and should the stock rise above that level; I think it could extend its rally into the mid-150’s.
Bristol Myers (BMY)
Bristol is another stock that looks pretty good. It already broke out and may be on its way to $65.50. Should the stock rise above resistance it has room to climb to $70.
Apple (AAPL)
That being said we still going need the mega-cap stock to participate and do the bulk of the heavy lifting. Apple is likely the key because of the new iPhones, and that likely carries the supply chain with it. I’d be curious to see how the phone is selling this first weekend. I preordered my iPhone X Max and had it delivered on the 21st. I needed an upgrade from iPhone 7 Plus. The Max is the same size as the 7 and 8 Plus when holding it, but the added screen space is pretty amazing. So I am happy with my upgrade decision.
The overall trend for Apple is still higher, and technical support appears to be firm around $217. The relative strength index is also continuing to trend higher. I think Apple’s stock should continue to see the upward momentum, starting this week.
Skyworks (SWKS)
The suppliers are starting to rebound as well, with Skyworks rallying pretty sharply at the end of last week., rising above a downtrend. The stock could make run towards $100. The RSI may even be beginning to break its downtrend, setting the stage for a longer-term rise.
Broadcom (AVGO)
Broadcom has been hot as well, since reporting its quarterly results, and this one has more room to rise as well, perhaps back to $275.
AMD (AMD)
AMD will continue to be a focus stock, and I continue to think the shares will fall to $29.50, and perhaps all the way to $25.75.
Nvidia (NVDA)
One stock forgotten about is Nvidia. The shares are still in a nice long-term uptrend, but over the short-term, the risk continues to be lower, perhaps to around $255.
Alibaba (BABA)
Alibaba started showing some signs of life last week, but that quickly faded. There is a good shot for a retest of the lows around $151.
JD
The same holds true for JD, probably falling to $25.50.
Baidu (BIDU)
Baidu is another of one these Chinese companies that have struggled and looks like it is ready to fall back to its lows around $209.
Disney/Comcast
Finally, Comcast won the bid to buy Sky for $39 billion over Disney. I think this was a bigger deal for Comcast than for Disney, and Disney balance sheet will be better off without the extra $40 or so billion in debt. We’ll know more about what the market things tomorrow.
Good Luck this week.
-Mike
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Michael Kramer is the Founder of Mott Capital and the creator of Reading the Markets.
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