Some investors look at the more than 1.3% plunge in the NASDAQ on Thursday as a reason to abandon tech, while others see it as an amazing opportunity to capitalize on an overdone rotation. You can count the editors in the latter camp.
Today, we saw RTA and Tactical Trader increase positions on existing tech holdings, while Surprise Trader sold tech shares for double-digit returns…but still held onto half of the positions. And Zacks Counterstrike sold a few names to “raise some cash to have some buying power when we are ready to jump in”. They’re getting prepared for the rebound (see more in the highlights section).
In the session, NASDAQ dropped by 1.36% to 5251.1, while Russell 2000 was off 0.65% to 1313.8. But in classic rotation style, the Dow was up 0.36% to 19,191.9 and the S&P slipped only 0.35% to 2191.1.
A Couple Winners for Surprise Trader
→ The Surprise Trader took profits from three positions on Thursday…and two of them were for double-digit returns. The tech panic was in full swing on Thursday, so Eric decided to lock in some gains with Nvidia (NVDA). The editor sold half of the position for a profit of 24.8%. The portfolio also got a nice return with Halliburton (HAL), which has skyrocketed since the OPEC announcement. Before the euphoria fades, the editor halved this position too for 14%. Finally, the portfolio sold all of Quintiles (Q) after the stop loss was hit this morning. It brought in 5%.
Today's Portfolio Highlights:
• If you believe that the economy is expanding, then today’s stiff rotation out of tech is opening some very nice opportunities. It just so happens that Steve does believe the economy is on solid ground, so today he added a 7% allocation in NetApp (NTAP) for Reitmeister Trading Alert. NTAP is a computer storage company with a Zacks Rank #1 (Strong Buy) status and a Zacks Style Score of “B” for Value. He also decided to add more shares of the fabless semiconductor company Cirrus Logic (CRUS).
In other news, RTA picked up more shares of Boyd Gaming (BYD) and brought the allocation up to 7.2%. Steve believes this company is set for explosive earnings growth, so today’s dip in price is a great chance for the editor to add more shares to one of his “best picks for 2017”. The complete commentary has more info on all of today’s moves.
• As today’s “tech wreck” unfolded, Kevin Cook saw the opportunity to add to his position in a volatile stock that was once the best-performing IPO of 2016 -- and could still finish that way. He doubled the allocation in Acacia Communications (ACIA) for the Tactical Trader and believes that a re-test of the November lows near $62 will bring fundamental investors back into this maker of optical networking products. Read the complete commentary for more on this new addition.
• Tracey plans to keep making moves in Insider Trader until the “quiet period” begins. So on Thursday, she added Kratos Defense & Security (KTOS), which is a small-cap defense company that specializes in satellites, microwave and modular products. KTOS reported a solid third quarter and then had a big secondary offering for general corporate use that was open to insiders. The CFO and four directors bit at the opportunity, combining for a cluster buy that got Tracey’s attention. The editor warns that this small cap could be volatile. Read more in the full writeup.
• As if selling two stocks for 30% gains each on Wednesday wasn't enough, Stocks Under $10 followed that up today with a nearly 42% performance out of Tilly's (TLYS). The casual apparel retailer crushed expectations for its fiscal third quarter. It was easily the best performer from all the portfolios on Thursday...and the editor isn't selling this one just yet. Looking forward, Brian, who was also yesterday's guest ZU editor, plans to buy a stock tomorrow.
• "It was a brutal day for tech as sector rotation continues to force the tech sector lower. The Nasdaq closed 1.36% lower, while overall the S&P held up higher, closing down only 0.35%.
"Financials held up well, signaling the Trump rotation is not done, but today shows that the sector can’t always support the market. The indices need tech to rally and today there was no bid in the space. I believe the tech sell off is being close to overdone and I am started shopping list today.
"Counterstrike's strategy over the next couple days will be watching for big moves to the down side and scooping them up when the pain is over. I feel like the bottom or some of these stocks is coming soon. I was very tempted today, but I held off as the selling was so widespread," said Jeremy in Zacks Counterstrike.
• "Today was "Shoot the High-Flying Info Tech Stock Day".
"Algo machine logic scans stocks and ETFs. It sees topping price action in growth-y stocks -- after a big momentum run. They act immediately and short the noted stocks and ETFs for a quick 3 to 5 percent profit. This is scalping for profits.
"There is no tangible way to see your best performing stocks rise every day, day-after-day. Owning shares is not that easy. What is important is that our ranking system is holding up, or improving the outlook, for these shares. It amounts to a dip buying opportunity for those who are interested. My guess? There will be a new share price leg higher after it runs its course," said John in Large-Cap Trader.
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