My earlier piece is resonating today about what has moved up that could be ripe for profit-taking.
Here are some stocks that I like very much, but respect the downside if we have a selloff.
First is United Technologies Corp (UTX) . When it was at $109, I pounded the table so hard here I thought it would break. But now at $118, I think the good news about the Rockwell Collins buy is fully in, as much as the bad news was in nine points ago.
Second, Honeywell International, Inc (HON) has a strategic review next week, and I think that if they decide not to spin off aerospace, there will be people who are disappointed. That could impact the stock in a negative way.
If the bank stocks come in to this earnings report with a full head of steam, and the employment report isn't as strong as some would expect, then I can see a quick 3%-to-4% decline in the group. That might present a better buying opportunity.
Costco Wholesale Corp. (COST) reports tonight. I love Costco, but the last few quarters have been fabulous and the stock has gone down anyway. If that happens again, be careful with Home Depot (HD) and Dollar Tree, Inc (DLTR) , which have both traveled much higher during this period. I would think that Burlington Stores, Inc (BURL) would see some profit taking. I am not backing away from TJX Companies (TJX) , but I think that the seller at $73 will break price and send it to $72.
There is a concerted belief that flash technology is now going down in price. I see pricing relatively stable, but the big rap against Western Digital Corp (WDC) is not only that drives are coming down, but also that flash is peaking. Again, I don't see spot prices falling, but I do want to warn you that profit takers will come on to both Micron Technologies, Inc (MU) and Lam Research Corp (LRCX) if that is the case.
Lower prices may be coming.
Hope that helps.
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