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Selected Portfolio Position Review: 01-23-19

Written by Lance Roberts | Jan, 22, 2019

Each week we produce a chart book of 10 of the current positions we have in our equity portfolio. Specifically, we are looking at the positions which warrant attention, or are providing an opportunity, or need to be sold.

While the portfolios are designed to have longer-term holding periods, we understand that things do not always go the way we plan. This monitoring process keeps us focused on capital preservation and long-term returns.

HOW TO READ THE CHARTS

There are four primary components to each chart:

  • The price chart is contained within the shaded area which represents 2-standard deviations above and below the short-term moving average.  
  • The Over Bought/Over Sold indicator is in orange at the top.
  • The Support/Resistance line (green) is the longer-term moving average which also acts as a trailing stop in many cases.
  • The Buy / Sell is triggered when the green line is above the red line (Buy) or vice-versa (Sell).

When the price of a position is at the top of the deviation range, overbought and on a buy signal it is generally a good time to take profits. When that positioning is reversed it is often a good time to look to add to a winning position or looking for an opportunity to exit a losing position.

With this basic tutorial let’s get to the sector analysis.

ABBV – AbbVie, Inc.

  • Continuing to consolidate within a “pennant” formation.
  • A breakout to the upside would bring the target of $115 into focus.
  • Healthcare has been under pressure as of late as market is currently chasing momentum.
  • Position is close to triggering a short-term BUY signal
  • Short-Term Positioning: Bullish
    • Add to position: $90
    • Stop-loss is $82.50

CHCT – Community Healthcare Trust

  • Long-term trend line intact and recently bounced off that critical level.
  • Has been consolidating over last 6-months and the previous sell signal is close to reversing.
  • Short-Term Positioning: Bullish
    • Breakout to new highs brings opportunity to add to position
    • Stop-loss moved up to $30
  • Long-Term Positioning: Bullish

ABT – Abbott Laboratories

  • Position continues to consolidate.
  • Still on a sell signal currently which keeps our sell points and stop losses tight.
  • Short-Term Positioning: Bullish
    • Will look to add to position on breakout to new highs.
    • Stop-loss is currently $67.50

AEP – American Electric Power

  • Utilities have been recovering following PG&E bankruptcy.
  • Trend remains very positive and support is near by.
  • Short-Term Positioning: Bullish
    • Looking to add to position if support holds at $76
    • Stop-loss is currently $72

CMCSA – Comcast Communications

  • Bought 1/2 position orginally. 
  • Continues to work a bullish pattern but is close to failing support $36
  • Also close to triggering a “sell signal”
  • Short-Term Positioning: Cautious
    • Looking to add to position above $39
    • Stop-loss is currently $34.50
  • Longer-Term Positioning: Neutral

MDLZ – Mondelez International, Inc.

  • Stock trades in a very defined range so trading limits are tight.
  • Long-term support is holding,
  • Lot of overhead resistance at previous highs.
  • Currently close to reversing back onto a buy signal. (bottom panel)
  • Oversold condition is being worked off.
  • Short-Term Positioning: Bullish
    • Sell Target: $44-45
    • Stop-loss moved up to $42

COST – Costco Wholesale

  • Stock has been rallying since deep oversold on Christmas.
  • Long-term trend line is currently resistance.
  • Sell signal still intact which keeps stops tight.
  • Currently coming off lower deviation band.
  • Short-Term Positioning: Neutral
    • Look to add to position on move above $220
    • Stop-loss moved up to $205

PFE – Pfizer, Inc.

  • Long-term trend line is holding and bullish.
  • Currently on a sell signal and testing and holding lower support.
  • Currently correcting overbought condition.
  • Short-Term Positioning: Bullish
    • Buy 2nd half of position at $44
    • Stop-loss is currently $42

FDX – Federal Express

  • Stock has bounced from the December plunge on global outlook. Most of that negative impact has been likely priced in.
  • Current sell signal has begun to improve. (bottom panel)
  • Short-Term Positioning: Neutral
    • Take profits at $190
    • Stop-loss moved up to $170

CVS – CVS Health Corp.

  • CVS has been under pressure following the December sell-off.
  • Currently on a sell-signal (bottom panel)
  • Very oversold and pushing lower deviation from short-term moving average. 
  • Short-Term Positioning: Neutral (Trade Only)
    • Look to sell on a rally back to $69-70
    • Stop-loss moved up to $63

Talk with an Advisor & Planner Today!

lance_sig

Lance Roberts is a Chief Portfolio Strategist/Economist for Clarity Financial. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube

2019/01/22
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