For my first 2017 post, I could write about my 2016 watch list returns and how they once again beat all three averages or how my overall investment returns fared much better or how my option trading was a total mixed bag of results; but I won’t.
Instead, I am going to form this post around a question many folks are asking now a days regarding the Trump rally and some interesting “gossip” predictions for the coming year.
First: The Trump Rally:
Though I have been known to try and hop on the momentum bandwagon as the rally train seems to be gaining steam and leaving the station for a run, I generally don’t chase stocks or rallies – especially once they have left the station.
Instead, I look for good quality stocks setting up in either a good pattern, nearing buy points, or for some reason, have been slow out of the gate and not participated in the rally.
The Trump rally has been in full steam ahead mode since the election and many high flying stocks are now looking tired or pulling back.
In fact, out of all the current IBD 50 list of stocks, most have notations of “well extended past buy point” or “OK to take profits”.
Most, but not all.
Some high fliers are forming good secondary buy points or are within buy range of break out points.
Here are the ones worth considering for a watch list – according to IBD.
SCHW – Charles Schwab nearing entry point with a four weeks tight pattern (a bullish consolidation pattern).
OZRK – Bank of the Ozarks is nearing a cup / handle buy point.
MSCC – Microsemi, currently in a three weeks tight pattern.
GS – Goldman Sachs has enjoyed the Trump rally and is in a four week tight pattern.
These next two are very intriguing to me because they are forming one of the strongest positive patterns and are NOT extended past buy points.
STMP – Stamps, is in a cup with handle pattern and near a breakout buy point.
AMN – AMN Healthcare, is also in a cup with handle pattern and near a buy point.
Of course, there are some other non-IBD50 stocks I am watching. These include:
MLM – Martin Marietta Materis, is in a nice flat base on base pattern.
STZ – Constellation Brands, has been hit hard by the Trump election results because of “Mexico” and fears of tariffs and trade wars; however the stock is near support and in a nice reversal pattern.
CX – Cemex, is a Mexican Cement Company which also has been hit hard by the Trump foreign economic policy. However, nearly one third of the company’s business comes from US infrastructure demand. Wall or no Wall, the US is going to be building up infrastructure and needing cement.
And last but not least are some speculative and “rumor” stocks for a 2017 watch list.
Buyout Rumor Candidates:
NFLX: Yes, believe it or not there is a rumor out there regarding some big entertainment conglomerate type of media company snatching up Netflix. The front-runner appears to be DISNEY. Speculation has it that CEO Iger, set to retire in 2018, is looking for one more big deal. NFLX is also nearing a top level resistance and breakout point. So the stars may be aligning for some excitement in 2017.
There are other rumored buyout stocks out there but NFLX is by far the biggest one of all.
Of course all these stocks plus my watchlists listed to the right are exactly that. Stocks to watch and research. It’s up to you to decide if and when to invest in them. I look for good set ups and entry points based on IBD suggestions.
How do you look for bargain opportunities in the midst of a rally?