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RoboStreet – October 15, 2020
Investing Landscape Seeing Pre-Election Choppiness
The mega-tech stocks led an early October rally that took the major averages back up to within a few percentage points before some of the baked-in expectations have run into some headwinds. Namely, the passage of coronavirus stimulus continues to stall with President Trump now willing to sign a bill above $1.8 trillion and a resurgence of COVID-19 cases in Europe and in some states in the U.S. is raising reopening worries.
The market has spent the past four days in the red and is a healthy set up for what is forecast to be a banner earnings parade that will highlight the most important companies in the next two weeks. Big cap tech should continue to put up strong results and guide to a good finish to 2020 as businesses continue to pursue the digital transformation of raise efficiencies and lower costs.
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
Investor sentiment is still net bullish as strong earnings tend to dominate other concerns and such as politics, natural disasters, big regulatory changes, geopolitical events, and central banks’ actions. During the past month, a few key companies have reported very strong numbers, laying the groundwork for the market to endure whatever volatility the election cycle may throw at it, and to be sure, there will be no shortage of volatility.
The SPY is trading in the consolidation phase and the main support level remains at the $342-344 level. The US Dollar, DXY, is trading in a narrow range with downward momentum. Currently, key support level is at $340. As long as the SPY is trading above the $342-344 level, I expect the market to retest August highs in the next 2-3 weeks.
I would be a buyer using any short-term corrections and use a dollar-cost averaging strategy to accumulate positions at this level. Based on our monthly predictions, the market will break through the $360 level in December of 2020/first quarter 2021.
Heading into the teeth of the election season, investors are taking refuge in the utility sector, evidenced by the current bullish action in the Utilities Select Sector SPDR ETF (XLU) that has rallied 12% during October. During times of uncertainty, money tends to rotate into the safe haven profile that utilities project.
The top ten holdings within XLU are all best of breed electric highly diversified power providers involved in nuclear, natural gas, coal, solar, wind, hydro, biomass, and other renewable sources. The current dividend yield is 3.07%.
When we apply our AI tools to XLU, our Seasonal Chart shows three “Higher” probability readings for the next 10, 20, and 40-day periods.
This bullish read makes XLU a prime candidate for addition to our RoboInvestor Portfolio that has produced some pretty fantastic returns for the past two years.
If single stock selection is more to one’s liking, the top holding Next Era Energy (NEE), formerly Floridan Power & Light Co., might also where we recommend to RoboInvestor members to add to their portfolios. The company enjoys strong migration trends, is a leader in renewable energy, has made several savvy acquisitions, and recently announced a 3-for-1 stock split that will take place on October 19.
When we apply another of our AI tools, Stock Forecast Toolbox, to shares of NEE, we get a strong “A” Model Grade rating. The stock trades right around $300 and has a predicted overhead resistance level of $330.32 making for a nice move higher from current levels.
These are just a couple of high-quality ideas of dozens generated by our AI platform every week. Our recommendations can be long or short in nature, include equities and ETFs in specific market sectors, commodities, currencies, interest rates, and volatility. I run an unrestricted model portfolio that lends itself to where the best opportunities lie.
From our inception back in April 2018, our Winning Trades Percentage has been a stunning 89.51%, meaning we’re making money about 90% of the time put risk capital to work. I can’t think of another advisory service offered anywhere that can even approach this track record, during what has been a very uneven market landscape since early 2018.
The table below is just a sample of recently closed trades in blue-chip stocks like PPG Industries (PPG), WorkDay Inc. (WDAY), CSX Corp. (CSX), and Cisco Systems Inc. (CSCO). At present, we’re working orders to book profits in iShares Russell 2000 ETF (IWM), Micron Technology (MU), and Dominion Energy (D).
It’s consistency that is the hallmark of building long-term wealth, and having the power of AI and my decades of market experience is a sure path to growing your nest egg invested in only the very best and liquid market-leading stocks and ETFs.
Join me and our RoboInvestor family on our journey in maximizing all the market’s potential without taking undue risk. The beautiful thing about our methodology is that our system dramatically reduces risk and portfolio volatility without compromising performance. I look forward to welcoming all readers of this column aboard. Make RoboInvestor your top pre-election trade and let’s finish 2020 together on a high note!
“I’m investing my own money in each and every stock as my AI platform identifies.”And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
*Please note: RoboStreet is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services. If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, MonthlyTrader, or RoboInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.
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