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SPECIAL ALERT: Remember, the January episode of the Zacks Ultimate Strategy Session is now available for viewing! Don’t miss your chance to hear:

▪ Sheraz Mian and Dr. John Blank Agree to Disagree whether a Bullish Growth Surprise will emerge in 2021

▪ Kevin Matras answers questions covering how to best proceed when the new administration transitions in, Zacks Rank #3 (Hold) stocks, work-from-home stocks, chart patterns, Style Scores and more in Zacks Mailbag

▪ Sheraz and Kevin Cook choose one portfolio to give feedback for improvement

▪ Market conditions from both fundamental and technical views

▪ The full list of top-performing stocks over the past 30 days

▪ New stocks added to the Zacks Ultimate portfolio

▪ And much more

Simply log on to Zacks.com and view the January episode here. And please let us know what you think of these monthly episodes. Email all feedback to mailbag@zacks.com.

Two of the major indices managed a second consecutive session of modest gains on Wednesday, but stocks are still enjoying a bit of a rest from last week’s record-setting pace.

The NASDAQ gained 0.43% (or about 56 points) to 13,128.95. The FAANGs were all positive on the day, especially Netflix (NFLX, +2.7%), Apple (AAPL, +1.6%) and Amazon (AMZN, +1.4%).

The S&P advanced 0.23% to 3809.84, but the Dow declined by 0.03% (or a little over 8 points) to 31,060.47.

Any of the editors will tell you that taking a break is a healthy and necessary thing for the market, especially when there are still so many uncertainties to clear up.

Stocks finished last week with new records as Democrats, who took both of Georgia’s recent Senate runoffs,  are expected to be much looser with the government’s purse strings as we wait for the vaccines to take hold.

But rising rates and an overheated market sobered up investors over the weekend, leading to losses on Monday that stocks haven’t recovered from just yet. However, the S&P and NASDAQ have now gained in back-to-back sessions.

But stocks may be able to snap out of this lethargy in the next couple of days. We should be getting the incoming Biden administration’s covid stimulus plan tomorrow.

The market will certainly be listening since stimulus is pretty much all it cares about right now. Not even an unprecedented second impeachment of the president could make a dent.

And as you already know, earnings season unofficially starts on Friday with some of the big banks taking the stage. Make sure you’re prepared for the deluge by reading Sheraz Mian’s recent article titled “Big Banks Q4 Earnings Preview”.

Today’s Portfolio Highlights:  

Surprise Trader: Continuing this week’s theme, the portfolio added yet another banking name on Wednesday by picking up Renasant (RNST). The company is part of the banks – southeast space, which is in the top 13% of the Zacks Industry Rank. There’s no official date for its quarterly report yet, but Dave likes the healthy Earnings ESP of 18.24%. He’s also impressed that next year’s EPS growth is expected at more than 39%, which you typically don’t see for the more conservative banking names. The editor added RNST on Wednesday with a 12.5% allocation, while also selling the idled Shaw (SJR) position. Learn more about today’s action in the complete commentary.  

Home Run Investor: It was really easy for Brian to pick a stock to sell on Wednesday. Echo Global Logistics (ECHO) was the only portfolio position with a loss. Plus, the stock is a Zacks Rank #4 (Sell). He sold the name today and replaced it by adding AdaptHealth Corp. (AHCO), which keeps the service at a full complement of 15 names. AHCO is a Zacks Rank #1 (Strong Buy) provider of home medical equipment. In November, the company made an acquisition that should have an impact in the upcoming quarterly report. Brian liked the deal and believes it will be a big help moving forward. In fact, he thinks a raised guidance could be in store for AHCO. Read the full write-up for a lot more on today’s moves. In other news, this portfolio had a top performer on Wednesday as Lithium Americas (LAC) rose 12.5%.

TAZR Trader: With the market likely to pause as we move into earnings season, Kevin thinks this is a good time to “trim profits and raise cash”. So that’s just what he did on Wednesday with two positions. The editor sold a third of Infinera (INFN) for a 26.2% return and about half of Shopify (SHOP) for 21.2%. Now the service has a bit more cash to take advantage of whatever opportunities pop up during earnings season. Read the full write-up for detailed explanations on why these stocks are being trimmed.

Stocks Under $10: This portfolio easily had the best performer of the day as Cassava Sciences (SAVA) soared just under 40%, which more than doubled the next biggest winner on the Top 5 scoreboard. The stock has barely been in the portfolio for a week, but has already gained more than 55% to become the service’s fifth best performer. SAVA is focused on the early detection and treatment of neurodegenerative diseases, such as Alzheimer’s.

Zacks Short Sell List: The portfolio swapped out two names in this week’s adjustment. It short-covered Marriott Int’l (MAR) and Yandex N.V. (YNDX), and then filled those open spots by adding NeoGenomics (NEO) and Sunrun (RUN). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide.

Until Next Time,

Jim Giaquinto

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