To some investors, picking stocks often seems a bit like inside baseball.
But in honor of Major League Baseball’s opening day over the weekend, Jonathan Krinsky at MKM Partners has simplified things a bit, providing an “all-star lineup” of what he views as the strongest stocks from each of the S&P 500’s
“For each of these names, there were many others we could have substituted, but felt these were the most timely and offered the best opportunity to outperform their respective sector, and hopefully the overall market over the next couple months,” wrote MKM’s chief market technician in a note dated Sunday.
These stocks could be helped by seasonality, he suggested. April has been an up month for stocks in ten of the last eleven years, with an average gain of 2.4%, Krinsky said.
Here is the all-star roster:
As for those picks, the all-star pitcher is e-commerce behemoth Amazon.com Inc.
. Krinsky said: “Perhaps a consensus long, but the absolute and relative trend of AMZN warrant that this should continue to be a core holding until evidence suggests otherwise.”
is the consumer staples pick, though an underperformer year-to-date. Krinsky said the famed drinks maker is a core holding based on the fact that shares have been moving sideways for 20 years, and that situation still needs to be resolved. “Getting back to its 2016 highs would provide around 10% upside,” the technical analyst said. Here’s his Coke chart:
makes the cut due to the fact that it’s in a strong uptrend, not so common among telecoms. Data-center operator Equinix Inc.
is Krinksy’s pick in the real-estate investment trust space (REIT), as he said it’s breaking out of nine months of sideways action.
In the utilities sector, NRG Energy Inc.
gets the nod. The strategist said the stock looks ready to begin moving higher, in step with a move up for its 200-day moving average, a key chart level. Here’s a chart for NRG from MKM:
Others in the lineup include Vivavi Solutions Inc.
from the tech sector. The company makes fiber-optics products, and Krinsky said look for shares to rise toward $13, and if that succeeds, onto the 2011 highs of around $16.
is the financials pick. Krinsky said the bank’s shares have been consolidating — neither continuing nor reversing a bigger trend in prices — under the 2015 high of $63 for the past few months, and a break above that level would suggest a “very powerful” move higher is ahead.
His pick for health care is Agilent Technologies Inc.
, which possesses a “great absolute and relative trend,” Krinsky said. Shares recently busted out of a three-year consolidating trend, and he sees the stock climbing toward the high $50s.
For industrials, Ingersoll-Rand PLC
has been going nowhere for the past few months, after a jump higher following the U.S. election. Watch for a move above $83 to get the stock cranking again, he said.
Finally, for the materials sector, Scotts Miracle-Gro Co.
gets into the all-star lineup. The seller of lawn and garden products, which was a big winner in 2016, should outperform again soon after four months of consolidating above its 200-day moving average, said Krinsky.