Weekly Update: McKesson Shows Strength After Earnings Dip
The major indexes held their ground this week. As of Friday morning, the S&P and Nasdaq were both trading near the same level they closed the week before.
Markets avoided any major selling days, and volume is picking up slightly as we approach the end of summer, which has historically seen lighter action.
Stocks posted net new highs each day, and the percentage of names above their 50- and 200-day moving averages continues to rise.
The solar energy and biotech sectors are currently leading as the top performers.
Solar, in particular, made a big move over the last few weeks…
Enphase Energy, Inc. (ENPH) is now up 37% from the $220 pivot point I identified on July 22.
Two other Watchlist stocks from last week, Ionis Pharmaceuticals, Inc. (IONS) and Otter Tail Corporation (OTTR), also made nice moves from their breakout points…
But with solar getting a bit extended, I will be focusing on the biotech sector this week.
Portfolio Review
I also want to review our open trade in McKesson Corporation (MCK).
I issued a buy recommendation for MCK on July 27, and we recorded an official entry price of $336.73 in our portfolio.
After initially moving higher, shares pulled back a bit after earnings.
What’s important, however, is how a stock responds to bad news…
In this case, shares quickly recovered and made new highs the following day.
This is a good sign of strength.
Our stop remains at $315.70. If you are risk-averse and want to tighten that up, you could move your stop loss up to $326.10 – just beneath the low of the earnings dip.
This would cut your risk from 6% down to 3% on the trade.
Still, I am going to leave our official stop in place at $315.70 in order to give the trade room to breathe.
Stealth Trades Watchlist
Going forward, your Weekly Updates will look a lot more like this one…
They’ll include more information on our current stock recommendations and put less of a focus on our weekly Watchlist.
Don’t worry – The full Watchlist is still available on our website right here!
But it’s important to remember that not all of the stocks on our Watchlist are actionable.
When it’s time to make an official recommendation for our Trade Tracker, I’ll let you know on our Alerts page right here!
Join the Insiders
Now, if you’ve ever wondered how I developed a proven track record of trading along the insiders like corporate CEOs, CFOs, executives and board members…
Do yourself a favor and check out my latest Insider Effect presentation!
Corporate insiders are always buying or selling shares in the companies they operate. These folks have a footing of knowledge that Main Street investors simply do not.
I covered my strategy for trading alongside corporate insiders and generating potentially massive gains as a result.
Live Coaching Session
Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.
We’ll send you a login reminder that morning, just so you don’t forget.
We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.
You need to attend this session to get the most from your subscription!
In the meantime, you can watch the replay of our latest Stealth Trades session right here.
Best wishes for your trading,
Ross Givens
Editor, Stealth Trades
P.S. Click here to learn more about my Insider Effect strategy and see what you could be missing out on.