Pullbacks create opportunity. As the new week begins stocks are broadly weaker. Here’s a trio we believe are beginning to look attractive.
Home Depot has had a great run since basing near its 200 day moving average in early April. At last week’s high the stock was up 17% from the April 2nd bottom. HD began to show signs of exhaustion two weeks ago before suffering an ugly key downside reversal on Friday. The stock is weak again today as a healthy pullback begins. A dip down to initial support near the May high($191.65)would provide a low risk entry opportunity for patient investors.
Walgreens Boots Alliance(WBA)
WBA exploded off its major base following its addition to the Dow Jones Industrial Average last week. The stock has been consolidating over the last three days, a process we expect to continue. WBA has a very solid support zone in place near the multi-week May highs. A dip down to this zone, which runs from $66.30-$65.80, would provide a entry opportunity for patient bulls.
HPQ began this month with an earnings inspired trendline breakout. After a seven day winning streak, which stretched the rally off the May lows to 15%, the stock began to lose momentum. HPQ has remained in a narrow range over the last two weeks. Just below this healthy consolidation is a solid support area near the May peak($23.10). With selling pressure rather light of late, we believe this zone represents a low risk entry opportunity.
At time of publication we are long WBA and HPQ in some managed accounts.