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On Wednesday, 8/16 , we update the top 5 “Super Grannies” and bottom 5 “Sleeper Grannies.“

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Today’s note will include a short video update: We unveil our top 5 and bottom 5 ideas from our Granny Shots.  We also discuss that August remains a month to be wary.

Please click below to view today’s Macro Minute. (Duration: 5:34).

• Updating 5 Super and 5 Sleeper Grannies
• Chartbook linked above

“Super Grannies” (long) and “Sleeper Grannies” are derived from our core stock list of 35 ideas called “Granny Shots”

• The rationale is many clients ask us to narrow this list of 35 names down to a list of “fresh money” ideas.
• We established a criteria of 4 factors to narrow the list to tactical buys:
  – fundamentals using DQM model managed by “tireless Ken”
  – IBD momentum rating
  – technical strength measured by Price >20 DMA, 20 DMA vs 200 DMA and combos
  – Mark Newton’s judgement on technical outlook
• We have 5 tactical buys aka “Super Grannies”
  – NVIDIA (NVDA 3.79% )
  – Meta Platforms (META 2.05% ) <– Carry-over
  – Arista Networks (ANET 3.94% ) <– Carry-over
  – W. W. Grainger (GWW 0.80% )
  – Monster Beverage (MNST -0.44% )
  
• The bottom 5 “Sleeper Grannies” are:
  – Honeywell (HON 0.91% )
  – Philip Morris (PM 0.86% ) <– Carry-over
  – Devon Energy (DVN -0.24% ) <– Carry-over
  – Garmin (GRMN 0.38% ) <– Carry-over
  – PayPal (PYPL -1.16% )
  

TECHNICALS ON 5 SUPER GRANNY SHOTS: By Mark Newton

NVIDIA (NVDA 3.79% ) – Bullish – NVDA continues to show some of the best strength within the entire Semiconductor sector.  The stock held right where it needed to on recent weakness down near $400 as this adjoins the intermediate-term uptrend from earlier this year.   While momentum has faded a bit given the minor weakening in NVDA from 480 to just above $400, this has snapped back sharply this week, and looks well positioned to push back to new all-time highs.  Specifically, the ability to have recaptured $441 is a bullish technical development that points to a rally back to new all-time highs, even if not in a direct line.  Pullbacks likely would not undercut $420 before pushing higher to test and break out above $480.  While NVDA has shown some negative momentum divergence on monthly charts, no evidence of price erosion is at hand that would make one avoid this stock.  Thus, its consolidation over the last month represents an attractive opportunity, technically speaking, to own one of the best stocks within the entire Semiconductor space.  Risk levels lie at $403, and should not be broken without postponing the rally and allowing for additional consolidation down to near $370.  At present, a move back to new highs into late September looks likely.

Meta Platforms (META 2.05% ) – Bullish – META remains quite strong and still correct to consider a Super Granny, Technically speaking.  Despite a couple weeks of lower prices, its existing uptrend from last October has not shown any evidence of technical deterioration.   Additionally, to META’s credit, the minor consolidation has helped to alleviate some of the weekly overbought conditions.  Thus, META actually is a better risk/reward at current levels than back in mid-July.   Gains should help to carry META up to near $345, and barring any technical weakness, META should be able to completely retrace its prior peaks back near $384.   Weekly DeMark counts show TD Sequential indicators displaying a 10 count, and would take at least another month before any type of meaningful upside exhaustion is in place.  This requires higher prices to register signals of the sort and Technology still looks excellent to favor for a push higher into late September.   Support lies near $288 and do not expect this level to be breached technically before a push back to new 2023 highs.  Overall, until META starts to show some evidence of trend weakness, this remains a SUPER Granny and should be able to push back to new highs.

Arista Networks (ANET 3.94% ) – Bullish – Arista Networks looks quite positive technically following its high-volume breakout back above the consolidation which had been ongoing since March.  Weekly charts still show a parabolic trend which has improved steadily in recent months with a trend of higher lows.    Momentum remains positively sloped on a weekly basis but is still not overbought given the extent of the minor consolidation since March.  Overall, ANET looks likely to push up to test and break out above recent peaks from August at $191 to reach $196-$200 which has relationships with the May rally as an alternative projection target as well as being double the lows from last October.  Until ANET starts to show evidence of slowing or breaking its uptrend,  it’s thought that further gains look likely.  Only on pullbacks under $148 would ANET violate support and postpone its rally, which is not expected in the weeks ahead.

W. W. Grainger (GWW 0.80% ) – Bullish – GWW looks appealing following its 10% decline as part of the existing intermediate-term uptrend from last Spring.  GWW has shown a consistent pattern of higher highs and higher lows as part of its existing uptrend, and weakness has caused prices to fall into a very attractive zone of support as part of this trend, with prices holding above the prior consolidation from March-June.   Rallies back to new highs look likely for GWW in the months ahead, with upside targets found near $840 which would represent the next area of resistance as part of this existing channel.  Only a break of $640 would postpone the likelihood of a rally and this looks unlikely given the recent stabilization following its pullback from early July.    Momentum looks neutral at current levels and not overbought given the pullback into its existing range.

Monster Beverage (MNST -0.44% ) – Bullish – MNST remains one of the stronger stocks within Consumer Staples following its gains this year, and MNST has outperformed all but three other stocks within the 38 companies that make up the Consumer Staples space, with returns of +16.24%.  Its breakout last November of a reverse Head and Shoulders pattern provided the initial technical catalyst for outperformance, but it continues to show excellent technical strength and a very compelling ongoing uptrend.   Minor consolidation since May has served to alleviate recent overbought conditions, but yet has failed to show any evidence of technical deterioration whatsoever.  Gains back above $60 look likely in the weeks to come, which should help MNST rally up to initial technical targets near $64 with additional upside technical targets found at $72.  Overall, monthly Relative strength index (RSI) readings are not yet overbought, despite this stock’s stellar runup, and additional strength looks likely.  While Consumer Staples remains a difficult sector to embrace in the current market, the recent churning in stock indices during a seasonally tough time has brought Staples back on the radar.  MNST would be one of a few stocks to consider owning within

Key incoming data August

• 8/1 10am ET July ISM ManufacturingTame
• 8/1 10am ET JOLTS Job Openings JunTame
• 8/2 8:15am ADP National Employment ReportHot
• 8/3 10am ET July ISM ServicesTame
• 8/4 8:30am ET July Jobs reportTame
• 8/7 11am ET Manheim Used Vehicle Index July FinalTame
• 8/10 8:30am ET July CPITame
• 8/11 8:30am ET July PPITame
• 8/11 10am ET U. Mich. July prelim 1-yr inflation Tame
• 8/11 Atlanta Fed Wage Tracker JulyTame
• 8/15 8:30am ET Aug Empire Manufacturing Survey Mixed
• 8/15 10am ET Aug NAHB Housing Market Index Tame
• 8/16 8:30am ET Aug New York Fed Business Activity Survey  
• 8/16 2pm ET FOMC Minutes
• 8/17 8:30am ET Aug Philly Fed Business Outlook Survey
• 8/17 Manheim Aug Mid-Month Used Vehicle Value Index
• 8/23 9:45am ET S&P Global PMI Aug Prelim
• 8/25 10am ET Aug Final U Mich 1-yr inflation
• 8/28 10:30am ET Dallas Fed Aug Manufacturing Activity Survey
• 8/29 9am ET June S&P CoreLogic CS home price
• 8/29 10am ET Aug Conference Board Consumer Confidence
• 8/29 10 am ET Jul JOLTS
• 8/31 8:30am ET July PCE

Key incoming data July

• 7/3 10am ET June ISM ManufacturingTame
• 7/6 8:15am ADP National Employment Report Hot
• 7/6 10am ET June ISM ServicesTame
• 7/6 10 am ET May JOLTSTame
• 7/7 8:30am ET June Jobs reportMixed
• 7/10 11am ET Manheim Used Vehicle Index June FinalTame
• 7/12 8:30am ET June CPITame
• 7/13 8:30am ET June PPITame
• 7/13 Atlanta Fed Wage Tracker JuneTame
• 7/14 10am ET U. Mich. June prelim 1-yr inflationMixed
• 7/17 8:30am July Empire Manufacturing Survey
• 7/18 8:30am July New York Fed Business Activity Survey
• 7/18 10am July NAHB Housing Market Indexin-line
• 7/18 Manheim July Mid-Month Used Vehicle Value IndexTame
• 7/25 9am ET May S&P CoreLogic CS home priceTame
• 7/25 10am ET July Conference Board Consumer ConfidenceTame
• 7/26 2pm ET July FOMC rates decisionTame
• 7/28 8:30am ET June PCE Tame
• 7/28 8:30am ET 2Q ECI Employment Cost Index Tame
• 7/28 10am ET July Final U Mich 1-yr inflation Tame

Key data from June

• 6/1 10am ET May ISM ManufacturingTame
• 6/2 8:30am ET May Jobs reportTame
• 6/5 10am ET May ISM ServicesTame
• 6/7 Manheim Used Vehicle Value Index MayTame
• 6/9 Atlanta Fed Wage Tracker AprilTame
• 6/13 8:30am ET May CPITame
• 6/14 8:30am ET May PPITame
• 6/14 2pm ET April FOMC rates decisionTame
• 6/16 10am ET U. Mich. May prelim 1-yr inflationTame
• 6/27 9am ET April S&P CoreLogic CS home priceTame
• 6/27 10am ET June Conference Board Consumer ConfidenceTame
• 6/30 8:30am ET May PCETame
• 6/30 10am ET June Final U Mich 1-yr inflationTame

Key data from May

• 5/1 10am ET April ISM Manufacturing (PMIs turn up)Positive inflection
• 5/2 10am ET Mar JOLTSSofter than consensus
• 5/3 10am ET April ISM ServicesTame
• 5/3 2pm Fed May FOMC rates decisionDovish
• 5/5 8:30am ET April Jobs reportTame
• 5/5 Manheim Used Vehicle Value Index AprilTame
• 5/8 2pm ET April 2023 Senior Loan Officer Opinion SurveyBetter than feared
• 5/10 8:30am ET April CPITame
• 5/11 8:30am ET April PPITame
• 5/12 10am ET U. Mich. April prelim 1-yr inflation Tame
• 5/12 Atlanta Fed Wage Tracker April Tame
• 5/24 2pm ET May FOMC minutesDovish
• 5/26 8:30am ET PCE April Tame
• 5/26 10am ET U. Mich. April final 1-yr inflation Tame
• 5/31 10am ET JOLTS April job openings

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35 Granny Shot Ideas: We performed our quarterly rebalance on 7/18. Full stock list here –> Click here

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