Bounce Mode

 
Last Wednesday appears as if it will mark a short-term low for stocks—there were many extremes in sentiment (fewest number of bullish investors in 10 years) and breadth (the most stocks hitting new 52-week lows since 2008), which, combined with the big turnaround that day (and the big relief rally on Friday), increases the odds that we’re now in bounce mode.  

This bounce could continue for a while, so if you want to nibble on a couple of strong names (especially those that react well to earnings), that’s fine. But our bigger message remains the same: The market’s intermediate- and longer-term trends are clearly down, so it’s likely any bounce will eventually lead to a retest (or worse) of the recent lows.

The good news is that any bounce will allow us to separate the wheat from the chaff, and that process has already begun. This week’s list has a few intriguing growth stories to consider. Our Top Pick is  a small, little-known biotech firm with a very unique business model.


This is an excerpt from Cabot Top Ten Trader, which features the best trades to make every week.  Designed for experienced investors who want even more great growth stock ideas, this advisory recommends the best 10 stocks each month for short-term investment by aggressive growth investors.

Michael Cintolo is Cabot's Vice President of Investments and Chief Analyst of Cabot Growth Investor and Cabot Top Ten Trader. To read customer reviews of Cabot Top Ten Trader, click here. To read reviews of Cabot Growth Investor, click here.


Michael Cintolo can be found on Google Plus.

Headline News

Stock Picks

Loews Corp.

This undervalued stock has strong future earnings growth expectations.

Biogen

Biogen is the market-share leader in treating multiple sclerosis.

Weibo

One of Paul Godwin’s favorite stocks in his Cabot Emerging Markets Investor portfolio.

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