2023 has been a wild ride, and there are still over three months remaining in the year. The S&P 500 has gained a respectable 16%, led by a handful mega-cap tech names that have absolutely crushed the market.
What would be a good stock to buy and hold for the rest of 2023? It's tempting to look at the solid performances from big-cap tech, and assume their strength will continue for the rest of the year.
If I had to choose from that group, I'd look to Alphabet (GOOGL) . I own the stock and I believe it'll continue to outpace its peers, for reasons stated here.
However, there could be trouble on the horizon. Credit-card debt is at an all-time high, as Americans grapple with inflation. The rate of inflation has slowed, but prices are stabilizing at much higher levels.
We can't ignore what is happening on the S&P 500's chart, either. As several of my Real Money colleagues such as Doug Kass and Stephen Guilfoyle have already mentioned, the large-cap index appears to be forming a bearish head-and-shoulders pattern.
Chart Source: TradeStation
Based on this chart, I wouldn't be surprised if the S&P 500 fell to the 4200 area. That's where a bullish trendline (green dotted line, A) and the index's 200-day moving average (red, B) should provide support in the event of a pullback.
If that pullback does occur, high-beta names like Alphabet could be hit hard. I'm looking for a stock that's technically strong like Alphabet, but less volatile.
I'm also looking for a business that stands to benefit from consumers' desire to spend less on essential items, like food. If I had to buy and hold one stock for the rest of the year, it'd be Walmart (WMT) .
On September 8, this stock closed at an all-time high. Walmart is trading well above its 50-day (blue) and 200-day (red) moving averages. Those indicators, along with Walmart's bullish trendline (green), show that the path of least resistance for this stock leads higher.
Chart Source: TradeStation
Walmart's 15.5% year-to-date gain is outpacing the performance of other big-box retailers (blue). Home Depot ( (HD) , black) has gained just 4%, while Best Buy ( (BBY) , green) and Target ( (TGT) , red) have respectively lost 8.7% and 17% so far this year.
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Chart Source: TradeStation
In addition, Walmart sells many items, such as food, toothpaste, diapers, and over-the-counter medications, that can be considered consumer staples. This means that, should a recession occur, Walmart has the potential to continue to outperform the overall market.
(GOOGL is a holding in TheStreet's Action Alerts PLUS portfolio. Want to be alerted before the portfolio buys or sells these stocks? Learn more now.)
