GRANNY SHOTS: November Super Granny update. High potential names to own for YE rally.

SLIDE DECK NOW AVAILABLE: To view the slide deck for today’s webinar, please CLICK HERE.

Today, 11/15, we update the top 5 “Super Grannies” and bottom 5 “Sleeper Grannies.” We also provide a Macro Update.

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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 our Macro Minute (Duration: 3:38).

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• Updating 5 Super and 5 Sleeper Grannies

“Super Grannies” (long) and “Sleeper Grannies” are derived from our core stock list of 36 ideas called “Granny Shots”

• The rationale is many clients ask us to narrow this list of 36 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 2.47% ) <– Carry Over
  – Arista Networks (ANET 3.47% ) <– Carry Over
  – Meta Platforms (META 0.85% ) <– Carry Over
  – Salesforce (CRM 0.91% )
  – Everest Group (EG 0.71% ) <– Carry Over
  
• The bottom 5 “Sleeper Grannies” are:
  – CF Industries (CF 0.04% )
  – Brown Forman (BF/B) <– Carry Over
  – PayPal Holdings (PYPL -0.55% ) <– Carry Over
  – Phillip Morris International (PM 1.51% ) <– Carry Over
  – Fortive Corp (FTV 2.77% )
  

TECHNICALS ON 5 SUPER GRANNY SHOTS: By Mark Newton

Nvidia (NVDA 2.47% ) – NVDA has gained nearly 20% over the last three weeks to push back to new weekly closing highs since bottoming in late October. This has helped to partially improve its short-term momentum, and the ability to make new all-time highs on a weekly close likely will drive NVDA higher to resistance between $550-$575.  Thus, technically the stock remains in stellar technical shape in the near-term. However, it should be mentioned that NVDA still lies below former peaks from mid-August, despite an above-average rally in recent weeks, and negative momentum divergence will increase on a push to new highs into December.  However, its resilience and ability to hold up quite well during 2023’s market pullback proved impressive.  Given the rally of over 300% from last October’s lows, its pullback attempt from August peaks managed to retrace right near a Fibonacci 23.6% retracement of the prior rally in the last year before pushing back up rapidly in recent weeks.   Key support lies at October lows at $392, and October’s month-end close proved to be within $3.00 of the prior support target of $410 listed last month.  Overall, while the waning intermediate-term momentum will have to eventually show more consolidation, it hasn’t yet shown much evidence of peaking out at this time.   Many investors incorrectly viewed its consolidation in recent months as a Head and Shoulders reversal pattern, and NVDA got down to, but not below, key levels that would have resulted in downside follow-through and technical deterioration.   Overall, provided that $392 holds, NVDA remains bullish and is thought to have an excellent chance of pushing higher.  Under $392, if this occurs in the months ahead, would lead down to $353, which represents strong Fibonacci support near prior peaks from 2021.  At present, this remains one of the strongest intermediate-term names within Technology, and is right to still consider quite attractive technically speaking.

Arista Networks (ANET 3.47% ) – Arista Networks’ trend has gotten increasingly more parabolic with its ongoing trend of higher highs and higher lows. It’s recent high-volume breakout back to new all-time highs occurred just two weeks ago, back in late October.  While the broader stock market bottomed out near 10/27, it’s a testament to ANET’s strength that it took a mere three days before this was able to successfully move back above $200 to new all-time high territory.  Momentum remains positively sloped on a weekly basis, but is still not overbought given the extent of the minor consolidation in recent weeks.  ANET has short-term resistance from $223-$225, and then $238. Only on pullbacks under $165 would ANET violate trendline support for 2023, which would result in weakness down to $148.50.  As discussed last month, ANET’s idiosyncratic stair-stepping pattern has allowed for stock market gains without carrying momentum to overbought levels on weekly charts.  Overall, while DeMark counter-trend indicators might line up on weekly and monthly basis as of December 2023, these are currently not complete based on my analysis and there has been no confirmation of any TD “13 Countdown” exhaustion.  Thus, ANET remains quite attractive technically, and further gains look likely.

Meta Platforms (META 0.85% ) – META’s breakout back above July peaks to new 2023 highs likely can allow for additional upside follow-through to strong resistance near August 2021 peaks at $384.31.  The stock continues to exhibit excellent technical structure, and little resistance lies between current levels  ($329.19-11/13/23 close) and  $384, which lies over 16% higher.   Despite the unraveling in Equal-weight Technology and Communication Services ETF’s since July, META failed to show much deterioration that would have caused technical concern.  Furthermore, its recent breakout comes on the heels of a giant consolidation pattern that’s been ongoing for 3.5 months.  Thus, the breakout from this pattern makes it highly likely that META can continue to show upside from current levels.  Weekly momentum has diverged a bit given the slowdown since July, but this past week’s upside acceleration is a clear short-term technical positive. Structurally, META will be attractive barring a break of $300 which would allow for a pullback to late October lows near $279.  However, unless October lows are broken, it’s still difficult to find much fault with META and any larger peaking out following this past week’s breakout will take time.  

Salesforce (CRM 0.91% ) – This week’s technical breakout of CRM’s four-month downtrend is quite constructive technically and should allow for additional upside progress to targets near $228 and eventually to $238 near July 2023 peaks.  CRM’s recovery from late 2022 has been a work in progress and its peak this past July occurred right near a key 61.8% Fibonacci area of resistance.  However, CRM remains one of the strongest names within Software and this week’s technical improvement looks likely to help CRM show a pickup in relative strength in the weeks to come. Neither weekly nor monthly momentum are overbought given the consolidation of recent months, and it’s expected that this week’s technical progress should result in upward progress back to new 2023 highs sometime in the months ahead.  Minor pullbacks likely should represent buying opportunities and only on a decline under $193 would rallies be postponed and give way to additional consolidation.  Software has been one of the strongest areas within Technology this year, and this outperformance likely can continue in the months to come.

Everest Group (EG 0.71% ) – Everest Group remains short-term bullish following October, having pushed back to new all-time high territory.  While it’s struggled a bit to keep up with the SPX in recent weeks, EG maintains a very positive technical pattern, and I expect a rally back up to $425, and eventual targets near $480.  The entire Insurance sector has exhibited superior relative strength over the past year as rates have pushed higher, and this might not last more than another few months.  Therefore, I’m unsure that EG represents anything more than a tactical Super Granny candidate.  However, given that rates have not sufficiently broken down and might bounce sharply after Thanksgiving, there stands to be a good likelihood that this can reassert its strength and press back above October highs.   Unless $368 is broken, it’s right that EG can continue to show strength on an absolute and also relative basis, and pullbacks likely find strong support near $394 before pressing back higher.   It’s structural improvement in recent weeks following EG exceeding the broader base that resembles a reverse Head and Shoulders pattern remains quite positive technically.  DeMark-based monthly exhaustion on the Insurance ETF, KIE 0.79%  relative to SPY 1.11%  and also XLF 1.51%  remains premature to signal any concern by roughly three months, and this would require an immediate bottoming out in the near-term weakness and turning higher into early next year.  Overall, it looks technically likely that EG’s strength last month is purely consolidating in the near-term before pushing back to new highs.    

Key incoming data November

• 11/01 9:45am ET S&P Global PMI October Final Tame 
• 11/01 10am ET JOLTS Job Openings September Mixed
• 11/01 10am ET October ISM Manufacturing Tame
• 11/01 10am ET Treasury 4Q23 Quarterly Refunding Press Conference Tame
• 11/01 2pm ET FOMC Rate Decision Dovish
• 11/02 8:30am ET: 3Q23 Nonfarm Productivity Tame
• 11/03 8:30am ET October Jobs Report Tame
• 11/03 10am ET October ISM Services Mixed
• 11/07 9am ET Manheim Used Vehicle Index October Final Tame
• 11/10 10am ET U. Mich. November prelim Sentiment and Inflation Expectation Hot
• 11/14 8:30am ET October CPI Tame
• 11/15 8:30am ET October PPI
• 11/15 8:30am ET November Empire Manufacturing Survey 
• 11/15 8:30am ET October Retail Sales Data
• 11/16 8:30am ET November New York Fed Business Activity Survey
• 11/16 8:30am ET November Philly Fed Business Outlook Survey 
• 11/16 10am ET November NAHB Housing Market Index 
• 11/17 9am ET Manheim Used Vehicle Index November Mid-Month
• 11/21 2pm ET Nov FOMC Meeting Minutes
• 11/22 10am ET: U. Mich. November final Sentiment and Inflation Expectation
• 11/24 9:45am ET S&P Global PMI November Prelim 
• 11/27 10:30am ET Dallas Fed November Manufacturing Activity Survey
• 11/28 9am ET November S&P CoreLogic CS home price 
• 11/28 10am ET November Conference Board Consumer Confidence
• 11/29 8:30am ET 3QS 2023 GDP
• 11/29 2pm ET Fed Releases Beige Book
• 11/30 8:30am ET October PCE

Key incoming data October

•  10/2 10am ET September ISM Manufacturing Tame
•  10/3 10am ET JOLTS Job Openings August Hot
•  10/4 10am ET September ISM Services Tame
•  10/6 8:30am ET September Jobs Report Mixed
•  10/6 9am ET Manheim Used Vehicle Index September Final Tame
• 10/10 11am NY Fed Inflation Expectations Mixed
•  10/11 8:30am ET September PPI Mixed
•  10/11 2pm ET Sep FOMC Meeting Minutes Tame
•  10/12 8:30am ET September CPI Mixed
•  10/13 10am ET U. Mich. September prelim 1-yr inflation Mixed
•  10/16 8:30am ET October Empire Manufacturing Survey Tame
•  10/17 8:30am ET October New York Fed Business Activity Survey Tame
• 10/17 8:30am ET September Retail Sales Data Hot
•  10/17 9am ET Manheim October Mid-Month Used Vehicle Value Index Tame
•  10/17 10am ET October NAHB Housing Market Index Tame
• 10/18 8:30am ET September Housing Starts Tame
• 10/18 2pm ET Fed releases Beige Book Tame
•  10/19 8:30am ET October Philly Fed Business Outlook Survey Tame
• 10/19 10am ET Existing Home Sales Tame
• 10/19 12pm ET Fed (including Powell) at Economic Club of New York
•  10/24 9:45am ET S&P Global PMI October Prelim Tame
•  10/26 8:30am ET 3Q 2023 GDP Advance Strong
•  10/27 8:30am ET September PCE Tame
•  10/27 10am ET Oct F UMich Sentiment and Inflation expectation Tame
•  10/30 10:30am ET Dallas Fed September Manufacturing Activity Survey Tame
• 10/31 8:30am ET 3Q23 Employment Cost Index Mixed
•  10/31 9am ET August S&P CoreLogic CS home price Mixed
•  10/31 10am ET October Conference Board Consumer Confidence Tame

Key incoming data September

•  9/1 8:30am ET August Jobs Report Tame
•  9/1 10am ET August ISM Manufacturing Tame
•  9/6 10am ET August ISM Services Mixed
•  9/6 2pm ET Fed releases Beige Book Tame
•  9/8 9am ET Manheim Used Vehicle Index August Final Tame
•  9/8 2Q23 Fed Flow of Funds Report Tame
•   9/13 8:30am ET August CPI Mixed
•  9/14 8:30am ET August PPI Tame
•  9/15 8:30am ET September Empire Manufacturing Survey Tame
•  9/15 10am ET U. Mich. September prelim 1-yr inflation Tame
•  9/18 8:30am ET September New York Fed Business Activity Survey Tame
•  9/18 10am ET September NAHB Housing Market Index Tame
•  9/19 9am ET Manheim September Mid-Month Used Vehicle Value Index Mixed
•  9/20 2pm ET September FOMC rates decision Market saw Hawkish
•  9/21 8:30am ET September Philly Fed Business Outlook Survey Mixed
•  9/22 9:45am ET S&P Global PMI September Prelim
•  9/25 10:30am ET Dallas Fed September Manufacturing Activity Survey
•  9/26 9am ET July S&P CoreLogic CS home price
•  9/26 10am ET September Conference Board Consumer Confidence

Key incoming data August

• 8/1 10am ET July ISM Manufacturing Tame
• 8/1 10am ET JOLTS Job Openings Jun Tame
• 8/2 8:15am ADP National Employment Report Hot
• 8/3 10am ET July ISM Services Tame
• 8/4 8:30am ET July Jobs report Tame
• 8/7 11am ET Manheim Used Vehicle Index July Final Tame
• 8/10 8:30am ET July CPI Tame
• 8/11 8:30am ET July PPI Tame
• 8/11 10am ET U. Mich. July prelim 1-yr inflation Tame
• 8/11 Atlanta Fed Wage Tracker July Tame
• 8/15 8:30am ET Aug Empire Manufacturing SurveyMixed 
• 8/15 10am ET Aug NAHB Housing Market IndexTame
• 8/16 8:30am ET Aug New York Fed Business Activity SurveyNeutral
• 8/16 2pm ET FOMC MinutesMixed 
• 8/17 8:30am ET Aug Philly Fed Business Outlook Survey Positive
• 8/17 Manheim Aug Mid-Month Used Vehicle Value IndexTame
• 8/23 9:45am ET S&P Global PMI Aug PrelimWeak
• 8/25 10am ET Aug Final U Mich 1-yr inflationMixed
• 8/28 10:30am ET Dallas Fed Aug Manufacturing Activity Survey Tame
• 8/29 9am ET June S&P CoreLogic CS home price Tame
• 8/29 10am ET Aug Conference Board Consumer Confidence Tame
• 8/29 10 am ET Jul JOLTS Tame
• 8/31 8:30am ET July PCE Tame

Key incoming data July

• 7/3 10am ET June ISM Manufacturing Tame
• 7/6 8:15am ADP National Employment Report Hot
• 7/6 10am ET June ISM Services Tame
• 7/6 10 am ET May JOLTS Tame
• 7/7 8:30am ET June Jobs report Mixed
• 7/10 11am ET Manheim Used Vehicle Index June Final Tame
• 7/12 8:30am ET June CPI Tame
• 7/13 8:30am ET June PPI Tame
• 7/13 Atlanta Fed Wage Tracker June Tame
• 7/14 10am ET U. Mich. June prelim 1-yr inflation Mixed
• 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 Index in-line
• 7/18 Manheim July Mid-Month Used Vehicle Value Index Tame
• 7/25 9am ET May S&P CoreLogic CS home price Tame
• 7/25 10am ET July Conference Board Consumer Confidence Tame
• 7/26 2pm ET July FOMC rates decision Tame
• 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 Manufacturing Tame
• 6/2 8:30am ET May Jobs report Tame
• 6/5 10am ET May ISM Services Tame
• 6/7 Manheim Used Vehicle Value Index May Tame
• 6/9 Atlanta Fed Wage Tracker April Tame
• 6/13 8:30am ET May CPI Tame
• 6/14 8:30am ET May PPI Tame
• 6/14 2pm ET April FOMC rates decision Tame
• 6/16 10am ET U. Mich. May prelim 1-yr inflation Tame
• 6/27 9am ET April S&P CoreLogic CS home price Tame
• 6/27 10am ET June Conference Board Consumer Confidence Tame
• 6/30 8:30am ET May PCE Tame
• 6/30 10am ET June Final U Mich 1-yr inflation Tame

Key data from May

• 5/1 10am ET April ISM Manufacturing (PMIs turn up) Positive inflection
• 5/2 10am ET Mar JOLTS Softer than consensus
• 5/3 10am ET April ISM Services Tame
• 5/3 2pm Fed May FOMC rates decision Dovish
• 5/5 8:30am ET April Jobs report Tame
• 5/5 Manheim Used Vehicle Value Index April Tame
• 5/8 2pm ET April 2023 Senior Loan Officer Opinion Survey Better than feared
• 5/10 8:30am ET April CPI Tame
• 5/11 8:30am ET April PPI Tame
• 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 minutes Dovish
• 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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36 Granny Shot Ideas: We performed our quarterly rebalance on 10/18. Full stock list here -> Click here

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