Each week we’ll bring you five stocks that are on our radar but this week is a little different.
Given the market’s volatility and selling pressure, the goal of this week’s report will seek to offer suggestions for more defensive stock ideas for investors’ portfolios as we head into what is likely to be a rough second quarter.
Stay tuned to the commentary and strategies that will be finding their way to your email box over the next few weeks as we strive to help all investors cope with the most difficult market conditions seen in years.
Let’s take a look at this week’s Five Stock Watchlist.
Technology “stocks to buy” over the short-term will be few and far between. To give an idea, there are only 25 stocks in the Nasdaq 100 that closed trading on Friday in positive territory for the year. Here’s a list of them.
Palantir shares posted their worst day trading since May 7th, 2024, on Friday as the stock dropped 11.5%. The move puts Palantir in negative territory on a year-to-date basis, but Palantir remains one of the strongest performers in the Nasdaq 100.
The stock’s 50-day moving average is in the process of turning neutral-to-bearish following last week’s decline. That shift in the stock’s technical trend will result in a lower price target for Palantir over the next 4-6 weeks as overall market weakness drags lower.
As an AI services company, Palantir is likely to weather the tariff and trade wars will less exposure than other technology companies that manufacture and import/export like AI semiconductor and hardware producers.
Palantir’s break below $80 - one of the “buy the dip” prices identified weeks ago – puts its $70 and $60 prices on investor’s next price targets and buying opportunities.
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Kroger shares were a standout in the market last week as the stocks closed almost one percent higher on Friday following a 7% rally earlier in the week.
Investors are moving into consumer staple and select retail stocks as volatility and uncertainty have turned technology stocks and other high beta sectors.
Kroger is in a unique position as the second largest grocer in the country. The largest is Walmart, a company that most investors should fit the bill for an inflation fighting stock, but there’s a problem.
Walmart’s products go well beyond groceries to include household, electronic, sporting goods, clothing and other “discretionary retail” items. Thos non-grocery items will put pressure on Walmart’s bottom line and performance as inflation becomes a larger concern and shoppers return to buying just the basics.
Kroger traded briefly to new all-time highs last week as investors flooded to its shares as one of the few that offer lower volatility and risk exposure along with a dividend yield for income.
Kroger shares remain in a bull market trend with a price target of $80.
Healthcare, Staple and Utilities… these are the first three industries that investors migrate to when the market starts seeing uncertainty at the level experienced last week.
Agilon Health Care (AGL) saw their stock move to what is likely to be strong support at $4 last week while the rest of the market was enduring the worst selling in years.
This healthcare company is focused on transforming healthcare for seniors by empowering primary care physicians through a partnership model. The company offers a platform for managing total healthcare needs and connecting payors, physicians, and patients.
Agilon has two drivers behind it’s current strength. First, investors see healthcare stocks as an industry of lower volatility during bear markets and recessions as it represents a staple in the economy.
Agilon is also in the position to possibly benefit from recent conversation and debate on the Medicare system. This hot button subject has consumers looking to ensure their health benefits survive any changes that the Trump administration may engage.
Shares are preparing to see a bullish Golden Cross patter form as AGL’s 50-day moving average moves above its 200-day moving average. This bullish pattern forecasts higher prices for a stock over the next 3-6 months.
Utility stocks, including Verizon (VZ) and AT&T (T) are attracting capital as investors continue to lower their exposure to high beta technology stocks and others that will be directly affected by the new trade wars.
Verizon’s 6.3% dividend yield puts it high on the list for dividend paying companies in the S&P 500 which averages 2.1% for the index.
Verizon shares dropped 5.7% on Friday, almost testing the stock’s 50-day moving average. That trendline remains in a bullish trend which forecasts that the stock’s price should be higher over the next 4-6-weeks.
Both Verizon and AT&T have seen improvements to their revenue and earnings per share results over the last two years as the companies have continued to invest in their network and infrastructure. That fundamental improvement to the company’s operations will help to increase margins and profitability for the company as we emerge from the current bear market.
Let’s be honest, to fid a bearish stock in these conditions is much easier. Stocks are now trading more than 12% lower over the last week, which means we are likely to see a short-term bounce in stocks at some point this week.
For that reason, it is important to look for a bearish stocks that has a long-term outlook that will put the stock on a tradable path to 10-20% lower prices over the next 3-4 months
That stock is Amazon.
Amazon’s exposure to several economic and consumer-related business lines indicates that the stock is likely to struggle more than its other Magnificent Seven counterparts.
From retail products through is shopping platform to AI computing power available via the company’s data centers, Amazon is looking at a decline in it’s broad and diversified business.
Shares are trading more than 5% lower on Monday as retail investors are clearly moving out of Amazon and the other Mag Seven names following a weekend that had to have had the average investors reading their latest quarterly account statements exclaiming “What the hell!”.
Amazon’s move below $175 puts the stock in a technical bear market with $150 lined-up as the next round of support. Investors that own Amazon may want to use any opportunity to sell into strength as Amazon’s current bear market target price is $125.
