Buy Alert! Deep Value About To Vault Higher
RoboStreet – August 13, 2020
No Value Trap This Time Around
For as far back as most anyone can remember, every time the value stocks have made an attempt to put together a sustainable rally, the effort has ended up trapping hopeful investors that just maybe this time will be different. While the major averages rallied to new all-time highs on the back of big-cap growth stocks, shares of industrials, financials, consumer staples, materials, and energy stocks sorely lagged.
Strong fund flows started showing up in the value sectors with a new level of conviction
It’s been the story for two years, until recently, when strong fund flows started showing up in the value sectors with a new level of conviction. After all, technology, biotech, and healthcare stocks reached premium valuations where further upside momentum was showing signs of exhaustion, forcing money to look elsewhere for opportunities.
“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.
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Dollar Index (DXY) continues to go through building a short-term bottom
Treasury yield was significantly higher this week (the TLT reached 50 days MA) and the Dollar Index (DXY) continues to go through building a short-term bottom.
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SPY longer-term overhead resistance is at $340
My opinion has not changed. The short-term bottom is at $300 and potentially can be retested most likely in August (put/call ratio is at the lowest point this year). SPY longer-term overhead resistance is at $340 and can be retested in the next 2-4 weeks. I would be a buyer using any short-term corrections, but would not chase the stock market at these levels.
Market can retest the all-time high level in the next 1-2 weeks
SPY top is set at $340 and the market can potentially retest the all-time high level in the next 1-2 weeks. The market can overshoot support and resistance levels when VIX is elevated. My strategy is to buy 5-10% market corrections. What is notable is the even in an elevated market, money isn’t leaving the market, but instead rotating into value sectors.
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Industrial sector is the most attractive of the value sectors
The industrial sector is where institutional managers are adding aggressively to their portfolios and provide what I believe is the most attractive of the value sectors in which to initiate positions on dips. The go-to ETF in the space is Industrial Select Sector SPDR Fund (XLI) where the top ten holdings account for 41.20% of assets.
Very bullish indicators for XLI
When applying my Tradespoon AI-platform to XLI, we are getting very bullish indicators across the 20,30,40 and 50-day periods going forward. So, based on my short-term signals, we’ll be active in our RoboInvestor advisory service in either the stocks or the ETF as our buy signals warrant.
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Lately, we’ve been ringing the register in Abbott Labs (ABT), Rockwell Automation (ROK), Target Corp. (TGT), SPDR Gold Shares ETF (GLD), DR Horton (DHI and Square Inc. (SQ).
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Heading into the election season can be tricky for market landscape
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“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.
(Want free training resources? Check our our training section for videos and tips!)
Click Here – To See Where I Put My RoboInvestor Money
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