More than 100 S&P stocks just hit new highs, and two may have more room to rise
It has been a landmark week for the S&P 500.
More than 110 S&P stocks, including Costco, Tesla and Advanced Micro Devices, hit new highs on Thursday along with a broader index. The S&P extended its gains on Friday, posting gains for the seventh day in a row.
Some of these record producers look like they are just starting out, JC O’Hara, technical marketing officer at MKM Partners, told CNBC’s Trading Nation Thursday.
“We really like the breakout consolidation model and this is exactly what you see in retail,” he said, pointing to the SPDR S&P Retail ETF (XRT) chart.
XRT is no longer “dead money”, O’Hara said, it got rid of an overbought condition with a recent breakout that could spread to some other names in the group.
“Two of our favorite brands that have shown consolidation and hit the market this week are Bath & Body Works and Tractor Supply,” he said, adding that both have room for growth. His Tractor Supply target was $ 240 per share, up 10% from current levels.
O’Hara said another hidden catalyst could help boost retail by the end of the year.
“Conditions are best to see a melt by the end of the year,” he said, projecting the S&P index to rise in the 4% to 7% range.
According to O’Hare, this could trigger short-outs, or when short sellers are forced to buy stocks to close a failed short, at a large rate against the trading floor.
“This is also why we love retail, because we think there will be a recession that will lead to increased short coverage,” he said.
After a 62nd new year high for the S&P, Jeff Kilburg of Sanctuary Wealth also expected stocks to rise through the end of 2021.
“We have hit all-time highs on some of these particular names, but we have not hit all-time highs on all estimates,” Kilburg, his firm’s chief investment officer, said in the same interview.
On the retail side, Kilburg has cautioned on a name going beyond the new high club.
“I’m worried about Under Armor,” he said, adding that it has lost 125% relative to rival Nike over the past three years.
“If it didn’t work and prevailed when people were at home, clicking on their iPhones, buying groceries, how good would it be now?”
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