Latest on 16 Promising Stocks as Market Digests CPI
With fed fund futures indicating an upcoming rate cut, here are the top stock names on our watchlist.
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The CPI data came in roughly in line with expectations, and the market is dancing around as it digests the news. Bonds reacted negatively to the news, but fed fund futures indicate a 94% chance of a quarter-point cut at the FOMC meeting on September 17.
The market’s biggest problem currently isn’t the news flow. It is the technical conditions. Many stocks are extended and need a rest, and there is also the issue of negative seasonality. The end of August is typically one of the slowest periods of the year, and that creates some randomness and volatility.
I still see quite a bit of strength in secondary stocks and am focused on some names that have had good earnings reports. Many of the stocks I’ve listed here need some technical development, but most have what I consider to be good fundamentals:
1. AST Spacemobile ASTS: The stock bounced off the 50-day SMA on solid earnings. It needs some consolidation now. I will hold a core position and look for entry points.
2. BridgeBio BBIO: It sold off on earnings but has recovered and is now testing highs. I will watch for added points.
3. Delcath Systems DCTH: It had a good earnings beat, but uncertainty about Medicare pricing is holding it back. It may take a while for greater clarity to emerge.
4. Emergent BioSolutions EBS: This stock saw a solid report and a good bounce. It is still very cheap but trades thin and choppy.
5. Electrovaya EFLVF: Earnings are due on August 13 after the close. The firm has reported numerous deals and has started operations at a new facility. It is painfully thin but it could surprise.
6. EOS Energy EOSE: This stock is seeing volatile action in a trading range. It should find some support and set up for a run at May highs.
7. Harrow HROW: Earnings on Monday night were good, but there was some confusion on revenues due to a pricing issue. It has huge growth potential. I am an aggressive buyer on Tuesday on weakness.
8. Humacyte HUMA: This name is a major disappointment and is likely to languish. I dumped it.
9. Meta META: This is still my favorite name in the Magnificent Seven MAGS. It is breaking out of a short consolidation after earnings.
10. Altria Group MO: This dividend play has caught fire. It's a good place to park some cash, but is a bit extended now.
11. Nebius Group NBIS: It's extended following good earnings, but still my favorite data center play. I'm watching for entries.
12. Ondas ONDS: This drone play posted good earnings and hit new highs. I will be aggressive on some new entries.
13. PureCycle PCT: It found support on earnings after filling a gap on the chart. It should have some good news flow in the next several months.
14. SoundHound AI SOUN: I highlighted this name on Monday. It jumped big and may need some rest and consolidation.
15. Uber UBER: It's back over its 50-day and building some support.
16. Xeris XERS: It saw excellent earnings and popped to new highs. The new target on Tuesday from Wainwright is $10. This remains one of my favorite names, but I will have to wait a while now for more news to flow.
If there are other stocks you are interested in discussing, please post a note below.
At the time of publication, DePorre was long ASTS, BBIO, DCTH, EBS, ELVA, EOSE, HROW, META, MO, NBIS, ONDS, PCT, SOUN, UBER and XERS.
