Stocks Under $10 Portfolio: Consumer Staples Overbought

 | Jan 22, 2017 | 12:00 PM EST
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

bldr

,

jive

,

txmd

The following is an excerpt from the Stocks Under $10 Weekly Roundup originally sent to Stocks Under $10 subscribers on Jan. 20. Click here to learn more about this dynamic portfolio managed by David Peltier.

U.S. stocks moved fractionally lower this week, which was shortened by the Martin Luther King, Jr. holiday, as earnings season started to ramp up. Volatility picked up ahead of monthly options expiration and as traders continued to position for potential policy changes in a Trump administration.

On a technical basis, we're seeing overbought readings in a couple of areas, such as measured by the Investors' Intelligence bull/bear reading. Defensives areas, such as consumer staples and utilities have moved into overbought territory, while the health-care sector has pulled back to a neutral position.

We entered 2017 with an above-normal cash position of 40% in the model portfolio and would consider putting some of our funds to work on a further market pullback. In addition to potential new names and those listed on our Bullpen, we'd look to purchase Builders FirstSource (BLDR) , Jive Software (JIVE) , TherapeuticsMD (TXMD) , if there are continued declines in the near term.

On the economic front, we'll get several looks at the housing market and regional economic readings. On Friday, we'll receive the first reading of fourth-quarter GDP growth, which is expected to come in at 2.2%, down from 3.5% in the third quarter.

While the focus was largely on earnings this week, we did hear commentary from several notable FOMC members, including chairwoman Janet Yellen. Fed funds futures are currently pricing in just a 4% probability of a rate increase at the next meeting on Feb. 1 and a 74% chance of at least two increases by the end of 2017.

Columnist Conversations

Texas Instruments (TXN) announced after the close that CEO Brian Crutcher resigned due to violations of the c...
The initial upside target off the recent low comes in around the 333.51-337.71 area. Here is the updated ch...
A cup/handle is one of the strongest and most precise chart patterns out there, proven more often than not.&nb...

BEST IDEAS

REAL MONEY'S BEST IDEAS

News Breaks

Powered by

COLUMNIST TWEETS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.