Current Focus List
The VoSI Focus List is a compilation and reference list of stocks for which Pocket Pivot or Buyable Gap-Up Reports have been issued. It is not intended as a "buy list" or a list of immediately actionable recommendations. Stocks on the list may or may not be in proper buy positions, and investors should exercise discretion and proper judgement in determining when and where stocks on the Focus List can be purchased. The following notes are intended to assist in this process. Please note that members can enlarge the Focus List image by clicking on the body of the email and then holding the Control Key while pressing the "+" key until it is large enough to read.
Major market indexes are all trading near their all-time highs, weathering a shaky start to the week as the market started off each of the first three days with gap-down opens. On Wednesday, the final gap-down opening day, the NASDAQ Composite Index undercut prior lows in its pattern that occurred within the past three weeks and then ralied on a massive gap-up move Thursday. Friday saw the indexes all churn around in narrow ranges, with the NASDAQ trading slightly above-average volume while the Dow and the S&P 500 Indexes.
For now, the market uptrend remains to the upside, although the action remains choppy and highly news-oriented. This is likely to remain the case as the Senate is expected to vote on its version of so-called tax reform legislation when it gets back from Thanksgiving vacation.
Despite the indexes selling off on Friday, breadth was positive, as the NYSE Advance-Decline Line, below, continued its two-day push off the lows of Wednesday. The NASDAQ Advance-Decline Line, not shown, has also maintained a two-day rebound. This may or may not be significant, since much of the breadth improvement was caused by a mass of retail stocks rallying as these businesses are seen as the primary beneficiaries of a lower 20% corporate tax. For now, the proper course of action for investors is and will be dictated by the action of individual stocks.
Focus List names appear to mostly be running in place, with two ANET and WB making better progress relative to the others on the list, which are mostly just chopping sideways. We believe that if the market does pull off a year-end rally, many of these "percolating" big-stock Focus List names that are continuing to base may emerge to higher highs in the process.
The Market Direction Model (MDM) remains on a buy signal.
Removed from the List this Week: None
Focus List Stocks Expected to Report Earnings this Week: None.
Arista Networks (ANET) remains one of the two strongest names on the Focus List, as measured by its 98 Relative Strength rating. The stock is currently extended after posting yet another all-time high on Friday.
Alibaba (BABA) remains in the same choppy, ascending range it started forming in August. The range has been steadily broadening, and over the past two-and-a-half weeks the stock has formed a short, descending price range. After finding support at the 50-dma on Wednesday, it has now rallied back up to the highs of this short, descending range and ended the week right at its 10-dma.
Caterpillar (CAT) is continuing to hold support at its 20-dema. It held tight at the line in the face of a Dow decline on Friday as volume dried up to -34% below-average.This puts CAT in a buyable position using the 20-dema as a tight selling guide.
Facebook (FB) remains buyable on constructive pullbacks to the 20-dema and the top of its prior base.
Netflix (NFLX) has continued to hold above its 50-dma, but so far has made no progress since its base breakout in early October. As we have noted in recent Focus List Review and Pre-Market Pulse reports, its failure to develop any upside momentum keeps it in position for a potential late-stage base-failure, which would then turn to the stock into a short-sale target at the point. A breach of the 50-dma would help to confirm this shift from a long to a short, and should be watched closely. Until then, low-volume pullbacks to the 50-dma continue to offer lower-risk entries as long as the 50-dma is held.
Nvidia (NVDA) closed Friday just above its 10-dma, which would put it in a lower-risk entry position. However, the stock initially gapped up and rallied up to the 215 price level on an analyst's upgrade and $250 price target before closing down on the day and near the lows of the day. Volume came in at -17% below-average but picked up from the prior day, and combined with the reversal off the intraday highs, helped to make the pullback less constructive than desired. This can be tested here at the 10-dma, using the 10-dma as a tight selling guide, although we wouldn't be surprised to see the stock potentially test or come close to the 20-dema. NVDA has been a major, big-stock leader in this market and would need to find support at the 20-dema, at very least, to remain viable.
Take-Two Interactive (TTWO remains within buying range of its buyable gap-up of the prior week after earnings, using the 116.35 intraday low of that BGU day as a selling guide.
Weibo (WB) is the other of the two strongest performing stocks on the Focus List, with a 98 Relative Strength rating equal to that of ANET. It is currently extended, and constructive pullbacks to the 105 can be used as lower-risk entries, using the 50-dma as a maximum selling guide.