After last week’s election updates, stock market bulls seem reinvigorated with President-elect Trump. And why shouldn’t they be?
The indices are pushing to new highs, and a number of the indicators we looked at last week have notably improved: The VIX is back below 20, the NYSE Advance Decline Line is turning up, and small cap stocks have improved over 10% in the last week.
With this positive backdrop in mind, it’s time for trend following traders and investors to start paying attention and looking for opportunity to capitalize and profit in the week ahead. So let’s cut to the chase.
Trend Following Stock Picks for November 2016 (Part 2):
Using one of my favourite FinViz stock screens, here are some of the ideas I’m paying attention to.heading into the second complete trading week of November 2016. Given all the breakouts that are happening this week, I encourage you to run your own screens too.
But hopefully these ideas can get you started on the right foot.
The first stock I want to share with you is Rockwell Automation (NYSE:ROK). After a couple years of going nowhere, this stock has finally broken out to new all-time highs. While this could be a volatile opportunity, the company has a strong track record of success and the recent buying volume speaks to the strong degree of interest from market participants.
One of the reasons I like this trade is because it’s relatively easy to manage. There is lots of wiggle room. And if the stock reverses off the highs in a meaningful way you know it’s time to take your stop-loss and move on.
Another idea worth a closer look is LeMaitre Vascular Inc (NASDAQ:LMAT). This smaller-cap stock has been in a strong uptrend, and once more you can note the strong buy volume helping to push the stock higher. Take a look at how I’m managing my LMAT position:
In addition to the stocks above, there are a number of other strong breakouts; stocks like NVDA, CR and MSM. But instead of jumping in head first, I’m more interested in watching how these stocks consolidate given how far they’ve come.
Finally, I’d be remiss if I didn’t mention Berkshire Hathaway. Buffett’s stodgy company could really be in the sweet spot if last week’s performance is any indication. BRK would likely benefit from a rising rate environment, as well as ongoing domestic economic strength. I initially entered shares of BRK/B in earlier 2016. Given the recent strength, I’ve raised my stop loss to around $148.
So there you have it! Those are some of the stock picks I’m watching as November 2016 unfolds. While anything is possible in the stock market, as a trend follower I must trust my investing strategy and take these signals.
I know it can be uncomfortable to buy stocks at all time highs. But it can also be immensely rewarding.
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