Awards Season: Which Stocks Take Home Hardware?

Subscribers to Chart of the Week received this commentary on Sunday, March 8.

Every single stock market sentiment indicator out there right now is saying the same thing, and it’s no secret the culprit behind it all. Social media has made us prisoners of the moment, and the echo chambers they produce forces us to become experts on whatever is holding our attention week to week.

So no, there won’t be any geopolitical exposes that connect the Strait of Hormuz to the stock market. There won’t be in-depth analyses of the Shia/Sunni dynamic in Iran, or what each Ayatollah successor could mean for markets. I was only a minor in International Relations, and that degree is gathering dust.

Given everything going on in the world, instead of adding another heavy-handed analysis, as a contrarian through and through I think we need a little lightheartedness. The Oscars and Selection Sunday are in eight days, so I want to spend the next two weeks turning something fun into actionable information to inform your stock trading strategy going forward.

This week, I’m going nominate six stocks for Schaeffies, Wall Street’s version of the Oscars.

Eleven straight months in the black is what you get when you’re an optical networking platform that benefits from generative AI reaching critical mass. It’s been said numerous times before, but AI isn’t your golden ticket — AI infrastructure is.

Notice what kind of stocks have kept climbing even as the AI bubble showed signs of bursting.

March may halt that streak, after Ciena gapped lower by 13% despite a top-line beat for the fourth quarter. The only reason the stock went lower though was the lofty valuation didn’t match with the accelerated growth. That’s life.

I didn’t pick Ciena out of a hat. CIEN showed up on top Senior Quantitative Analyst Rocky White’s Trending Stocks list over the last six month. Max drawdown means much you would lose if you bought at the worst possible time and sold at the worst possible time within the time period. So while even CIEN is read hot, your max drawdown pales in comparison to other names on the list. Just like it takes forever for the best movies to hit streaming, you’d have to pay up for options right now, with that SVI elevated.

But even after the bear gap, four analysts hiked their price target and BofA Global Research upgraded CIEN to “buy” from “neutral.” Chart support is stepping up at the 50-day moving average. Short interest is up 40% in the most recent reporting period.

Ciena is your One Battle After Another; it gets better the more you think about it.

Take a bow, Michael Fiddelke. Target is in the midst of a massive makeover, and while it’s not all on him (he took the reins officially in February), you have to be intrigued by the vision.

A beat-and-raise for Q4 prompted a 6.7% post-earnings pop on Wednesday, and the massive shift in analyst price targets could be just the beginning. Currently, 26 of the 38 brokerages in coverage rate the stock a “hold” or worse.

TGT has turned in only three weekly losses since Thanksgiving. The 40-day moving average has stepped up for those dips. Is Fiddelke a young Villeneuve?

This one is tough to translate directly to stock speak, so let’s go with performance. Which stock has delivered the strongest performance?

LNG ran away with this one. Liquefied natural gas is having its moment due to the conflict in the Middle East. As a result, LNG is headed for eight straight weekly wins and hit a record high of $256.86 on Friday.

A virtuosic performance. But note that the 14-day Relative Strength Index (RSI) has climbed comfortably around 80.

When filming wraps, what happens to LNG? Back to the quiet life — a la Daniel Day-Lewis.

Best Supporting Actor/Actress: United Airlines (NYSE:UAL)

I’m going to really let the word ‘supporting’ do the heavy lifting here. UAL is within 3% of its 12-month moving average, after closing above this trendline for the past five months. Per Schaeffer's Senior Quantitative Analyst Rocky White, this signal has occurred 12 times during the last 20 years, after which the stock was higher three month later 75% of the time with an average 17.1% gain.

Click Here to view the rest on Schaeffer’s Substack!