S&P 500 Biotech Giant Vertex Leads 5 Stocks Showing Strength

Your stocks to watch for the week ahead are Cheniere Energy (LNG), S&P 500 biotech giant Vertex Pharmaceuticals (VRTX), Cardinal Health (CAH), Steel Dynamics (STLD) and Genuine Parts (GPC).

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While the market remains in correction, with analysts and investors wary of an economic downturn, these five stocks are worth adding to watchlists. S&P 500 medical giants Vertex and Cardinal Health have been holding up, as health-care related plays tend to do well in down markets.

Steel Dynamics and Genuine Parts are both coming off strong earnings as both the steel and auto parts industries report optimistic outlooks. Meanwhile, Cheniere Energy saw sales boom in the second quarter as demand in Europe for natural gas continues to grow.

Major indexes have been making rally attempts with the Dow Jones and S&P 500 testing weekly support on Friday. With market uncertainty, investors should be ready for follow-through day breakouts and keep an eye on these stocks.

Cheniere Energy, Cardinal Health and VRTX stock are all on IBD Leaderboard.

Cheniere Energy Stock
LNG shares rose 1.1% to 175.79 during Friday’s market trading. On the week, the stock advanced 3.1%, not from highs, bouncing from its 21-day and 10-week lines earlier in the week.

Cheniere Energy has been consolidating since mid-September, but needs another week to forge a proper base, with a potential 182.72 buy point formed on Aug. 10.

Houston-based Cheniere Energy was IBD Stock Of The Day on Thursday, as the largest U.S. producer of liquefied natural gas eyes strong demand in Europe.

Even though natural gas prices are plunging in the U.S. and Europe, investors still see strong LNG demand for Cheniere and others.

The U.K. government confirmed last week that it is in talks for an LNG purchase agreement with a number of companies, including Cheniere.

In the first half of 2021, less than 40% of Cheniere’s cargoes of LNG landed in Europe. That jumped to more than 70% through this year’s second quarter, even as the company ramped up new export capacity. The urgency of Europe’s natural gas shortage only intensified last month. That is when an explosion disabled the Nord Stream 1 pipeline from Russia that had once supplied 40% of the European Union’s natural gas.

In Q2, sales increased 165% to $8 billion and LNG earned $2.90 per share, up from a net loss of $1.30 per share in Q2 2021. The company will report Q3 earnings Nov. 3, with investors seeing booming profits for the next few quarters.

Cheniere Energy has a Composite Rating of 84. It has a 98 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement with a 1 to 99 score. The rating shows how a stock’s performance over the last 52 weeks holds up against all the other stocks in IBD’s database. The EPS rating is 41.

Vertex Stock
VRTX stock jumped 3.4% to 300 on Friday, rebounding from a test of its 50-day moving average. Shares climbed 2.2% for the week. Vertex stock has formed a tight flat base with an official buy point of 306.05, according to MarketSmith analysis.

The stock has remained consistent over recent weeks, while the relative strength line has trended higher. The RS line tracks a stock’s performance vs. the S&P 500 index.

Vertex Q3 earnings are on due Oct. 27. Analysts see EPS edging up 1% to $3.61 per share with sales increasing 16% to $2.2 billion, according to FactSet.

The Boston-based global biotech company dominates the cystic fibrosis treatment market. Vertex also has other products in late-stage clinical development that target sickle cell disease, Type 1 diabetes and certain genetically caused kidney diseases. That includes a gene-editing partnership with Crispr Therapeutics (CRSP).

In early August, Vertex reported better-than-expected second-quarter results and raised full-year sales targets.

S&P 500 stock Vertex ranks second in the Medical-Biomed/Biotech industry group. VRTX has a 99 Composite Rating. Its Relative Strength Rating is 94 and its EPS Rating is 99.

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Cardinal Health Stock
CAH stock advanced 3.2% to 73.03 Friday, clearing a 71.22 buy point from a shallow cup-with-handle base and hitting a record high. But volume was light on the breakout. CAH stock leapt 7.3% for the week.

Cardinal Health stock’s relative strength line has also been trending up for months.

The cup-with-handle base is part of a base-on-base pattern, forming just above a cup base cleared on Aug. 11.

Cardinal Health, based in Dublin, Ohio, offers a wide assortment of health care services and medical supplies to hospitals, labs, pharmacies and long-term care facilities. The company reports that it serves around 90% of hospitals and 60,000 pharmacies in the U.S.

S&P 500 stock Cardinal Health will report Q1 2023 earnings on Nov. 4. Analysts forecast earnings falling 26% to 96 cents per share. Sales are expected to increase 10% to $48.3 billion, according to FactSet.

Cardinal Health stock ranks first in the Medical-Wholesale Drug/Supplies industry group, ahead of McKesson (MCK), which is also showing positive action. CAH stock has a 94 Composite Rating out of 99. It has a 97 Relative Strength Rating and an EPS rating of 73.

Steel Dynamics Stock
STLD shares shot up 8.5% to 92.92 on Friday and soared 19% on the week, coming off a Steel Dynamics earnings beat Wednesday night.

Shares blasted above an 88.72 consolidation buy point Friday after clearing a trendline Thursday. STLD stock is 17% above its 50-day line, definitely extended from that key average.

Steel Dynamics’ latest consolidation could be seen as part of a larger base going back six months.

Steel Dynamics topped Q3 earnings views with EPS rising 10% to $5.46 while revenue grew 11% to $5.65 billion. The steel producer’s outlook is optimistic despite weaker flat rolled steel pricing. STLD reports its order activity and backlogs remain solid.

The Fort Wayne, Indiana-based company is among the largest producers of carbon steel products in the U.S. It engages in metal recycling operations along with steel fabrication and produces myriad steel products.

How Millett Grew Steel Dynamics From A Three Employee Business

STLD stock ranks first in the Steel-Producers industry group. STLD stock has a 96 Composite Rating out of 99. It has a 90 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement that tops at 99. The rating shows how a stock’s performance over the last 52 weeks holds up against all the other stocks in IBD’s database. The EPS rating is 98.

Genuine Parts Stock
GPC stock gained 2.8% to 162.35 Friday after the company topped earnings views with its Q3 results on Thursday. For the week GPC advanced 5.1% as the stock held its 50-day line and is in a flat base.

GPC has an official 165.09 flat-base buy point after a three-week rally, according to MarketSmith analysis.

The relative strength line for Genuine Parts stock has rallied sharply to highs over the past several months.

On Thursday, the Atlanta-based auto parts company raised its full-year guidance on growth across its automotive and industrial sales.

Genuine Parts earnings per share advanced 19% to $2.23 and revenue grew 18% to $5.675 billion in Q3. GPC’s full-year guidance is now calling for EPS of $8.05-$8.15, up from $7.80-$7.95. The company now forecasts revenue growth of 15%-16%, up from the earlier 12%-14%.

During the Covid pandemic, supply chain constraints caused a major upheaval in the auto industry, sending prices for new and used cars to record levels. This has made consumers more likely to hang on to their existing vehicles for longer, driving mileage higher and boosting demand for auto replacement parts.

Fellow auto stocks O’Reilly Auto Parts (ORLY) and AutoZone (AZO) have also rallied near buy points amid the struggling market. O’Reilly reports on Oct. 26.

IBD ranks Genuine Parts first in the Retail/Wholesale-Auto Parts industry group. GPC stock has a 96 Composite Rating. Its Relative Strength Rating is 94 and it has an EPS Rating of 89.

Increase Fat Loss by Nutritional Journaling

Fat loss continues to be one of the most popular topics in health and fitness and people are always looking for new ways to lose weight and improve the way they look. Companies are always promoting new and often untested products such as pills, powders, creams, exercise equipment, and diets to promote fat loss, but the vast majority of these things are marketing gimmicks that are rarely as effective as previously established methods for losing fat. One such proven method for increasing fat loss that often goes overlooked is nutritional journaling.If you are unfamiliar with the concept of nutritional journaling, it is basically just writing down what you eat and drink throughout the day, although there are many different ways to go about keeping a nutrition journal. A journal can be very thorough or much more simplistic, but keeping virtually any type of nutrition journal should increase the amount of fat you lose.It may not seem as though keeping track of what you eat and drink would significantly affect fat loss, but you can see how powerful nutritional journals are by taking a closer look at the most popular and enduring weight loss businesses. Most popular programs do not necessarily use a journal, but they generally use something to help you keep track of what you eat. This typically involves things like following a point system or eating pre-made meals that have specific calorie contents.Regardless of what system is used, the real benefits come from making you keep track of what you eat and drink and not from some special characteristic of one particular system. Some people will certainly prefer one system over another, but the specific system is not really all that important. By tracking your eating and drinking habits, you become more aware of everything that you put into your body. As a result, your unconscious eating habits start becoming more conscious eating choices.In other words, by keeping track of foods, calories, points, etc., you are actually increasing your awareness about how and what you eat. Many people have poor eating habits and they often don’t realize how much or how frequently they eat. By following this type of system, you can stop being a slave to poor eating habits and start making more conscious decisions about what you put into your body.Fortunately, you don’t have to sign up for one of those programs, because you can get almost all the same benefits from keeping a nutritional journal on your own. A personal nutrition journal doesn’t have to contain every little detail about what you eat and drink, although a journal with more useful information generally results in greater fat loss over time. However, even a simple journal with very basic information may significantly improve your fat loss.Just the act of writing down the items you eat and drink, along with the time you had them, will make you think more seriously about your nutritional choices. For instance, if you are supposed to be eating healthy and you find yourself writing down a lot of junk food or other empty calories, you will see how much you are straying from the way you are supposed to eat. Then the next time you start to have chips or cookies, you will probably think about having to write it down, which by itself may make you stop and choose something healthier or have a smaller portion instead.Keeping this type of basic journal is very quick and easy and you do not need any special equipment. You can use a pen and paper, computer, iPhone, or whatever else works for you. The only thing is that you should write down what you eat/drink fairly soon afterwards, because if you wait too long, you may forget some things or the information will otherwise not be as accurate. The more accurate your information, the more it will help you.If you are willing to put forth a little more effort with your nutritional journal, you can also use it to fine tune your nutrition program and further improve your overall health and fat loss over time. To get more out of your nutritional journal, I still recommend keeping track of what and when you eat and drink, but you will also have to look at more specific components of your food. At the minimum, you should keep track of total calories, calories from fat, calories from protein, calories from carbohydrates, and grams of fiber.You can go further and break things down even more to include variables such as calories from sugar, calories from trans-fats, calories from saturated fat, etc. In these cases, the important thing is to have the information be in numerical form and have almost every category use the same type of measurement. For example, in the above categories, everything is broken down into number of calories per item/ingredient. You don’t have to use calories, but it is probably the easiest.The issue is that much of this information will not originally be listed in terms of calories, but rather grams. The problem with grams is that all grams are not equal in terms of calories. For instance, one gram of carbohydrate or protein is about 4 calories, alcohol is 7 calories, and fat is 9 calories, so simply writing down everything in terms of grams does not really provide a clear picture of your overall nutritional intake. By converting everything into calories, you can easily compare your intake of each type of ingredient to find out what you need to add or what you should consume less.On the other hand, fiber does not have any calories, so you should still record it in grams, because you want to eat at least 25 grams per day. Your fiber should ideally come from both soluble and insoluble sources, but most of it will probably be insoluble. In any case, if you see that you are not getting close to the minimum 25 grams of fiber, you should make it a priority to eat more foods that are high in fiber. However, without keeping track of your fiber intake, you may not even realize that you need more fiber. These types of changes are important, because improving fiber intake can cause significant your long-term health and fat loss.Some people choose to track their nutrition in even greater detail and additionally record their intake of vitamins, minerals, and other micronutrients. However, I would not recommend nutritional journaling for anything this involved as it would take way too much time and effort. If you want stats on everything, there are numerous computer programs available to help you keep track of all this information. For most people, a more basic nutritional journal will work just as well.If you have never tried keeping a nutritional journal, it may sound like more effort than it is worth, but this is certainly not the case. The most basic journals are easy to keep and take very little time and keeping a nutritional journal really does increase your awareness and makes you more accountable for your eating habits. This can be very empowering, but it also makes you take responsibility for how and what you eat, which is probably one of the big reasons why many people are unwilling to try nutritional journaling.It is certainly easier to follow your regular eating habits without giving them much thought and if you have good nutritional habits, this approach may be fine. Unfortunately, many people do not have the best eating habits and this is problematic, because so much of long-term health and fat loss success is dependent developing good habits. Keeping a nutritional journal will let you identify the problems in your current eating program and help motivate you to replace bad eating habits with good ones over time.There really are many different ways that keeping a nutritional journal can help improve your nutritional habits and ultimately your fat loss, so I hope you at least give a simple journal a try. Keeping a nutrition journal often results in more significant improvement than people first expect, but it works best when you are honest, accurate, and consistent with your journal. In any case, a nutritional journal will certainly give you better results than the next new miracle pill or similarly gimmicky health and fitness product that promises great results with minimal effort.

SPDN: An Inexpensive Way To Profit When The S&P 500 Falls

Summary
SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).
Birdlkportfolio

By Rob Isbitts

Summary
The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.

The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.

SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.

Strategy
SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.

Proprietary ETF Grades
Offense/Defense: Defense

Segment: Inverse Equity

Sub-Segment: Inverse S&P 500

Correlation (vs. S&P 500): Very High (inverse)

Expected Volatility (vs. S&P 500): Similar (but opposite)

Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.

Strengths
SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.

Weaknesses
The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.

Opportunities
While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.

Threats
SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.

Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy

Long-Term Rating (next 12 months): Buy

Conclusions
ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.

ETF Investment Opinion

SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.