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Boeing Keeps Dow from Joining Rally

Jim Giaquinto

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If it weren’t for Boeing, we would’ve had an even better Tuesday session. But even with the aerospace company pressuring the Dow, the other major indices still managed a second straight day on positive ground.

The FAANGs didn’t have as good a day as yesterday, but Alphabet still jumped approximately 1.5% and Apple advanced about 1.1%. In the end, the NASDAQ rose 0.44% to 7591.03.

It’ll be really interesting to see how close the market allows the S&P to get to 2800 before blocking the path. That milestone has proven to be elusive in the post-correction market. The index briefly closed above that mark on Friday, March 1, but then quickly gave it back. On Tuesday, the S&P inched even closer with a gain of 0.30% to 2791.52.

“As expected, we are finding some resistance at the 2800 level. This will be a hard area to crack without any positive news and the bulls couldn’t do it today,” said Jeremy Mullin in Counterstrike.

These indices have now put together two consecutive days in the green after failing to close positively even once last week.

The Dow probably would’ve joined the indices on the plus side if it weren’t for Boeing. The aerospace giant had an even worse session on Tuesday than on Monday, dropping by 6.1% compared to yesterday’s 5.3%. The company is still dealing with the second crash of a 737 Max 8 jet in less than 6 months. Several countries, including the U.K. and China, have suspended operations of those models pending investigations, though the FAA has not grounded the planes in the U.S.

Boeing’s pullback led the Dow lower by 0.38% (or about 96 points) to 25,554.66.

Today's Portfolio Highlights:

Stocks Under $10: The recent NVDA/MLNX deal refreshed Brian Bolan’s bullishness and has him looking for a chip name to add. The editor picked up Emcore (EMKR), which offers a broad portfolio of compound semiconductor-based products for the broadband, fiber optic, satellite and terrestrial solar power markets. The editor thinks the deal – in which NVDA paid A LOT for MLNX – sends a signal that “bigger is better” and provides a tailwind for chips. The portfolio held EMKR a couple years ago when it was approximately $9. But these days it’s hanging right around its 52-week low of just under $4, leaving a great risk/reward profile for this investment. In other words, this is a case of "buying the big dip”. Read a lot more in the full write-up.

Counterstrike: The portfolio added Palo Alto (PANW) and Splunk (SPLK) on Tuesday in a couple classic Counterstrike moves. Both companies reported positive earnings surprises in their most recent quarters (11% for PANW and 22% for SPLK) along with increases in their guidance. However, they also both dipped after a short spike higher. PANW offers a network security platform and Jeremy thinks it could eventually move as high as $284, while SPLK offers a software platform that organizes data that could be on its way to $150. The editor added each with a small, 5% allocation due to the ongoing trade uncertainty. Read the full write-up for specifics on each of these buys.

Zacks Short List:
The portfolio short-covered Shutterfly (SFLY) on Tuesday for a 12.1% return in exactly one month. It also got out of Murphy Oil (MUR) and Tesla (TSLA) in this week's adjustment. The new buys that replaced these names are:

• BioMarin Pharmaceutical (BMRN)
• Agnico Eagle Mines (AEM)
• Cheniere Energy (LNG)

Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

All the Best,
Jim Giaquinto

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