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Dow Sets New Record and Clears 30K for the First Time

The market was back to its record-setting ways on Tuesday, as three weeks’ worth of positive vaccine news has investors feeling pretty good about the future heading into the holiday season.

In fact, they’re feeling so good that the Dow hit one of those milestone numbers like in the pre-pandemic days.

The Dow closed above 30,000 for the first time ever. It climbed 1.54% (or nearly 455 points) to 30,046.24. That brings its two-day total to just over 780 points after slipping 0.7% last week.

The S&P is also at a new closing high by jumping 1.62% to 3635.41.

These indices were both at new highs on Monday, November 16th, before a few days of selloffs led to the market’s first negative week of the month.

However, things are looking pretty good for this week, especially since there’s only a day-and-a-half left due to Thanksgiving.

The NASDAQ isn’t at new highs yet, but it still advanced 1.31% (or around 156 points) to 12,036.79. That’s pretty good given that money is flowing into recovery names now and out of the stocks that helped this index keep everything afloat this year.

The FAANGs were all higher, especially Facebook (FB, +3.16%). Meanwhile, Apple (AAPL), Netflix (NFLX) and Alphabet (GOOG) were all up more than 1% as well.

So, we all know what’s happening right now. Yesterday was the third Monday in a row with some very encouraging vaccine news.

Most recently, AstraZeneca (AZN) and the University of Oxford said their candidate had a 70% efficacy, and more than 90% under certain conditions.

And this came after Pfizer (PFE)/BioNTech and Moderna (MRNA) released data with efficacy rates of around 95%.

Let’s see if the market can rally into the holiday tomorrow and add onto this month’s epic gains.

Today's Portfolio Highlights:

Options Trader: It was a busy session for the portfolio as Kevin added four names on Tuesday. Those new signals were:

• Snap-on (SNA) – bought to open a March 185.00 Call
• SS&C Tech (SSNC) – bought to open two April 70.00 Calls  
• Vulcan Materials (VMC) – bought to open a May 155.00 Call
• Lennar (LEN) – added a few bull call spreads

There’s too much information to breakdown right here, so make sure to read the editor’s complete commentary for all the specifics on these moves.

Stocks Under $10: The pandemic has really brought to light the need for better medical testing, which was the idea behind the addition of Quotient Ltd. (QTNT) on Tuesday. This medical instruments play is focused on transfusion diagnostics and has a fully automated platform for use in donor centers and patient testing sites. The Zacks Rank #2 (Buy) topped the Zacks Consensus Estimate in each of the last four quarters, including a surprise of 48% in the most recent report. The editor thinks QTNT will be getting more attention from the market after this solid beat, so he added it today while “others are just looking”. The complete commentary has more on this new buy. By the way, this service had a top performer today with Cross Country Healthcare (CCRN) rising 9%.

ETF Investor: Small caps are back! The deluge of positive vaccine data has the market looking toward the future, so Neena thinks this small-cap rally has legs and will continue for months. The portfolio already has some exposure to this asset class, but the editor added more on Tuesday by buying the Vanguard Small-Cap Value ETF (VBR). The fund tracks the CRSP US Small Cap Value Index, which means it focuses on stocks that are cheap right now but could move higher in a new market dynamic. Its top sectors are financials, industrials and consumer discretionary. The portfolio also sold Vanguard Health Care ETF (VHT) today, which Neena considers to be an underperformer but still brings a gain of 17.9%. Read the full write-up for more.

TAZR Trader: The consumer discretionary space is charging higher despite rising coronavirus cases and no stimulus, so Kevin thought this was a great time to add more Shopify (SHOP). He bought a small 5% position in this cloud-based e-commerce platform back on October 29 with plans to buy more moving forward. And today it happened as the stock appears to be “forming a bull flag consolidation before busting through the 50-day”. The editor thinks this Zacks Rank #2 (Buy) will see new highs around $1200 in the next three months. Perhaps most importantly though, one of Kevin’s favorite hedge fund managers made SHOP his top holding in Q3. Read the complete commentary for all the specifics on this move.

Large-Cap Trader: The portfolio swapped out three positions on Tuesday, which began by cashing in a double-digit winner and two other profitable returns. John sold Mohawk Industries (MHK) for a 41% return, while also getting out of 3M Company (MMM, +9.5%) and Whirlpool (WHR, +6.1%). All of these stocks were added on October 28. The editor took the money and split it equally into the following three names:

• Jabil (JBL) – provider of electronic manufacturing services and solutions.
• Tapestry (TPR) -- a house of modern luxury lifestyle brands
• Lab Corp. of America (LH) -- a leading global life sciences company

These new buys are all Zacks Rank #1s (Strong Buys) that reported big EPS surprises in their most recent quarters. The editor believes the Growth at a Reasonable Price (GARP) set-ups are also a “main attraction”. Learn much more about all of these additions in the complete commentary.

Insider Trader: Homebuilding insiders are starting to make moves right now, since business is just too good and the prices just too cheap to pass up. For example, Beazer Homes (BZH) saw one of its directors buy 5950 shares last week, which was just a day after being awarded 9,177 shares in stock options. Tracey considers this to be a “powerful message” and further evidence that the trend with homebuilders is real and not just a pandemic play. BZH is a Zacks Rank #1 (Strong Buy) that saw the highest level of orders in a decade in its fiscal fourth quarter. Shares are up since the coronavirus lows, but haven’t eclipsed pre-Covid levels. The editor sees a great opportunity with BZH, so she added the stock on Tuesday with a 9.8% allocation. That was all of the portfolio’s remaining cash. Read the full write-up for more. 

Counterstrike: If you have a weak stomach, you might want to stay away from Overstock (OSTK). This e-commerce service provider is known for “violent” moves. For example, the stock was trading under $3 in April and as high as $128.50 a couple months ago. It’s no wonder that Jeremy calls this a “ridiculous” stock. However, it’s also a Zacks Rank #2 (Buy) that reported a positive surprise of 317% last time. Shares plunged after the report, which put OSTK right into the editor’s wheelhouse. After getting some confirmation of support, he decided to buy the stock on Tuesday. However, Jeremy is taking a smaller, 6% allocation and will double-down on the next wild swing upward. He thinks it can get to $85 pretty quickly. The portfolio also sold Levi Strauss (LEVI) for a 22.6% return in just under six weeks as the stock nears its targets. See the complete commentary for more on today’s action.

Surprise Trader: Yep, there are still earnings reports coming out! Dave is especially interested in Autohome (ATHM), an online automotive website in China that reports before the bell on Monday, November 30. There’s an Earnings ESP of 3.81% heading into the report, while earnings growth is expected at more than 28% for the quarter. All-time highs for the stock are still about $20 away, so there’s plenty of running room moving forward. The editor added ATHM on Tuesday with an 11% allocation, while also getting out of the underperforming Purple Innovation (PRPL) position. See the complete commentary for more.  

Black Box Trader: Only one change for the portfolio in this week's adjustment, which is coming a day late due to some technical difficulties. The stock that left the service today was AECOM (ACM, +2.3%) and it was replaced by adding The Container Store (TCS). Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.

Zacks Short Sell List:
The portfolio replaced four positions in this week's adjustment. The stocks that were short-covered included:

• GDS Holdings (GDS, +3.4%)
• A-Mark Precious Metals (AMRK, +1.2%)
• StoneCo (STNE)
• ConocoPhillips (COP)

The new buys that filled these spots were:

• Elanco Animal Health (ELAN)
• Incyte (INCY)
• Nuance Communications (NUAN)
• Ulta Beauty (ULTA)     

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

Until Next Time,

Jim Giaquinto

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