Stock Pick Update: April 8 - April 14, 2020
April 8, 2020 (Investorideas.com Newswire) The broad stock market has extended its rebound last week (April 1 - April 7). On March 23 it sold off to the new medium-term low of 2,191.86. It was a stunning 35.4% below February 19 record high of 3,393.52. The corona virus and economic slowdown fears have erased more than a third of the broad stock market value! Then we saw huge come-back rally, as the S&P 500 index got back to local highs above 2,700 mark. Is this a new uptrend or just upward correction before another leg down? We will certainly see more short-term volatility.
The S&P 500 index has gained 6.46% since last Wednesday's open. In the same period of time our five long and five short stock picks have gained 0.59%. So our stock picks were relatively weaker than the broad stock market. However, long stock picks have outperformed the index as they've gained 10.03%. But short stock picks have resulted in a loss of 8.84%. The overall results remain relatively better than the S&P 500 index over last weeks.
If stocks were in a prolonged downtrend, being able to profit anyway, would be extremely valuable. Of course, it's not the point of our Stock Pick Updates to forecast where the general stock market is likely to move, but rather to provide you with stocks that are likely to generate profits regardless of what the S&P does.
This means that our overall stock-picking performance can be summarized on the chart below. The assumptions are: starting with $100k, no leverage used. The data before Dec 24, 2019 comes from our internal tests and data after that can be verified by individual Stock Pick Updates posted on our website.
Below we include statistics and the details of our three recent updates:
- Apr 7, 2020
Long Picks (Apr 1 open - Apr 7 close % change): PFE (+5.29%), KR (+5.15%), ANSS (+7.40%), SLB (+25.82%), WFC (+6.48%)
Short Picks (Apr 1 open - Apr 7 close % change): COG (+8.89%), MCO (+13.26%), MMM (+9.55%), IDXX (+5.86%), EL (+6.63%)
Average long result: +10.03%, average short result: -8.84%
Total profit (average): +0.59%
- Mar 31, 2020
Long Picks (Mar 25 open - Mar 31 close % change): INTC (+3.13%), STZ (+14.92%), PFE (+10.64%), SLB (-10.01%), WFC (-1.03%)
Short Picks (Mar 25 open - Mar 31 close % change): WMB (+8.10%), PGR (+7.03%), EQIX (+16.57%), ADBE (+3.32%), CHD (+3.60%)
Average long result: +3.53%, average short result: -7.73%
Total profit (average): -2.10%
- Mar 24, 2020
Long Picks (Mar 18 open - Mar 24 close % change): LW (+9.21%), BDX (-15.16%), PEG (+0.30%), SLB (+10.00%), AXP (+5.04%)
Short Picks (Mar 18 open - Mar 24 close % change): COG (-12.05%), PGR (-5.79%), ITW (-7.68%), HSY (-7.78%), REGN (-9.33%)
Average long result: -0.38%, average short result: +8.53%
Total profit (average): +4.07%
Let's check which stocks could magnify S&P's gains in case it rallies, and which stocks would be likely to decline the most if S&P plunges. Here are our stock picks for the Wednesday, April 8 - Tuesday, April 14 period.
We will assume the following: the stocks will be bought or sold short on the opening of today's trading session (April 8) and sold or bought back on the closing of the next Tuesday's trading session (April 14).
We will provide stock trading ideas based on our in-depth technical and fundamental analysis, but since the main point of this publication is to provide the top 5 long and top 5 short candidates (our opinion, not an investment advice) for this week, we will focus solely on the technicals. The latter are simply more useful in case of short-term trades.
First, we will take a look at the recent performance by sector. It may show us which sector is likely to perform best in the near future and which sector is likely to lag. Then, we will select our buy and sell stock picks.
There are eleven stock market sectors: Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Technology, Communications Services, Utilities and Real Estate. They are further divided into industries, but we will just stick with these main sectors of the stock market.
We will analyze them and their relative performance by looking at the Select Sector SPDR ETF's.
The stock market sector analysis is available to our subscribers only.
Based on the above, we decided to choose our stock picks for the next week. We will choose our top 3 long and top 3 short candidates using trend-following approach, and top 2 long and top 2 short candidates using contrarian approach:
- buys: 1 x Health Care, 1 x Consumer Staples, 1 x Technology
- sells: 1 x Energy, 1 x Real Estate, 1 x Financials
Contrarian approach (betting against the recent trend):
- buys: 1 x Energy, 1 x Real Estate
- sells: 1 x Health Care, 1 x Consumer Staples
Top 3 Buy Candidates
WAT Waters Corp. - Health Care
- Breakout above month-long downward trend line
- Resistance level of $210-215 (upside profit target level)
WBA Walgreens Boots Alliance, Inc. - Consumer Staples
- Price bounced off from new medium-term low
- Closer to breaking above the downward trend line
- The resistance level at $50 (upside profit target level)
AMD Advanced Micro Devices, Inc. - Technology
- Breakout above the downward trend line
- The resistance level of $50-54
- Rising RSI indicator confirming short-term uptrend
Summing up, the above trend-following long stock picks are just a part of our whole Stock Pick Update. The Health Care, Consumer Staples and Technology sectors were relatively the strongest in the last 30 days again. And they have lost less than the S&P 500 index in the same period. So that part of our ten long and short stock picks is meant to outperform in the coming days if the broad stock market acts similarly as it did before.
We hope you enjoyed reading the above free analysis, and we encourage you to read today's Stock Pick Update - this analysis' full version. There, we include the stock market sector analysis for the past month and remaining long and short stock picks for the next week. There's no risk in subscribing right away, because there's a 30-day money back guarantee for all our products, so we encourage you to subscribe today.
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Stock Trading Strategist
Sunshine Profits - Effective Investments through Diligence and Care
All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak's reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
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