Despite some hard evidence from the mighty Apple (AAPL) that the coronavirus is having some negative economic impact, the market is still not embracing the negative narrative. On top of that news, there is a poor earnings report from Walmart WMT but players are driving the market higher.
It seems extremely illogical that the market is so complacent when it is extended, in need of a rest and has a number of very convenient excuses for selling. The only explanation is that there is still a high level of liquidity and that cash has few places to go but into equities.
The best way to deal with this action is to stay focused on price action. Sooner or later the character of the action will shift but there is no way to know when that might be. The news is obviously not having any effect so it is a mistake to keep anticipating that it will.
I'm doing a few trades. I've started a new position in Progyny (PGNY) , which is a recent IPO that offers fertility services for 1.4 million members in the U.S.
I also added to a position in InMode (INMD) , which announced strong numbers and increased guidance. After a pop higher the stock reversed and I'm using that pullback as an opportunity to add to my position. The company had revenue growth of 60% and EPS of $0.46 versus a loss last year. With a trailing P/E of 26, the valuation looks attractive especially if the company continues to beat guidance.
One other stock on my radar today is Inseego (INSG) , which is my Stock of the Week. This is one of the few "concentrated" 5G plays and is benefiting from the problems that Huawei is facing.
(Apple is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AAPL? Learn more now.)
