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Piper Jaffray senior technical analyst Craig Johnson and Alan Lancz & Associates President Alan Lancz on concerns of a market pullback and the sto...
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All right let's take a look at all listed -- -- we have our market panel Alan -- he is president valid Lance.
& Associates and Craig Johnson director piper Jefferies technical research group.
Craig I wanna go to you first because you were a big -- you're talking about S&P at 17100.
Even go out to 2014 a dark about a 2000 S&P however.
This week you you seem to air on the side of caution suggesting that we could be in the drop a phase of -- hop.
Dropping -- -- where there may be a pullback of five to 10% so when you see that pullback coming.
Well did that's good grades great observation yes we we have been bullish on this market since August -- -- we're among the earliest -- bullish on this market.
We've reached our price objective the first subject that we were looking for was 1550 on the S&P 500.
And we're not sure that we can really push through this kind of major overhead resistance -- without getting some sort of set back the drop that we talked about.
This drop we think would be in kind of the five to 10% range it would really allow the market to pull back gather some strength and probably pull back and retest.
The 200 day moving average -- the uptrend support line off of the march 2009 lows.
We think that the process perhaps is getting a little bit exuberant out there right now with how we did see in this -- rallying as strong as it has been -- Don't be mistaken we are still very bullish on this market more and we just don't think that the trees can grow to the sky and you'll have to have some pullback in consolidation -- sure.
-- you may feel the same way that that maybe it's gotten just a bit frothy and if so is there a way to play that or do you just.
Keep your money in their keep sort of dollar cost averaging and the good quality companies and and just sort of sit it out ride the wave.
When I I think there's a good strategy to use Liz right now we're doing is taking some profits.
In the high flyers have done so well for us.
And put money into companies that haven't done that well with law expectations so we're still trying to participate in riding this wave.
But where trying to do it from a standpoint of lesser risk on the table.
Craig let's get specific -- -- was all about the banks we have Richard Fisher hear from the Dallas that we have to stress -- is that are there a couple of banks insurance and of course.
BAC.
Bank of America's had this huge run up you still think it's supply or at least you're looking favorable.
Would you buy it even now after the run up or would you wait for that five to 10% pull back you're talking about in the market.
You god continue to be by the Bank of America shares in any weakness I would continue to keep buying them.
Reason being is a financial sector still putting up fabulous relative strength.
It is fundamentally the steepening yield curve is an absolute fabulous backdrop for the for the for the financial sector.
If you look at the long term chart and Bank of America.
This is a stock that we still think can move up into the twenty dollar range very easily in if not up toward the thirty dollar range but again focus on the longer term chart.
From that perspective is is there anything about its holdings those particularly its its holdings in real estate some of those distressed mortgages that concern you.
You know at this point time as a technician -- focus on the chart.
And as I look at the longer term chart has clearly been -- change in the psychology toward the Bank of America shares having reverse they have multi month price downtrend.
Alan do you know when you're deciding what to buy for your clients are figuring out what -- the best place here do you just by the market -- more selective and if so.
What would you be putting your money into at this point.
I think you have to be selective especially as the market moves off you -- -- lessen risk -- As valuations rise so.
You know a company like Mercury General MCY.
Has a six and three quarter percent dividend -- how insurance company got a.
It can you can you guarantee veteran engineer who -- a lot of these dividend payers sometimes you wonder and they keep going with battered does that even really matter 6% good enough.
Well -- like six and three quarters percent and us trade near new lows near book value.
So so at the company that that we really like for long term another one off report.
Matt -- copper and gold -- is near new lows yield near 4%.
Again you know copper is going down -- worries that China.
But you know I I think expectations.
Are are so well.
In -- -- so cheaply they you could participate in this market without taken an undue risk of of chasing companies.
Craig I noticed what are your picks his target and and let's talk about consumer first second and we've been focusing on technicals and stocks.
But the consumer has a little less money actually we found out with today's jobs report that that perhaps not alas my there was an uptick.
In the amount of pay that people are getting in that is great news however they are pay more in taxes as well so might there be a pullback in retail sector.
We're not so sure about that I think one of the offsets that does street is not really focused on quite yet is.
The fact that the energy sector's really been rolling over quite hard over the past 5060 weeks.
We think oil prices will likely continue to trend lower.
Just like we've seen coming out of the 1982.
When the stock market took off we saw energy -- over very hard.
And we suspect there will probably see that happen again.
Target looks fabulous when you look at -- long term monthly charge is made a great bottoming pattern we caught an inverted head and shoulders from a technical perspective.
And we think the stock to move up into perhaps the mid eighties from here.
By the way to look at it is like looking energy right now we can go back to target I think it's right now about 66 dollars a share what what's your target for target.
We think you move up into the mid eighties from our swap perspective.
It's a big jump.
Alan what are you predict I mean if you like materials and energy that must mean that there's going to be that kind of usage from an improving global economy.
If you were to put money and specifically a country whether it's emerging China.
US may be even is there are reaches you feel is really gonna show some muscle.
You know again -- I look at valuations China has done done nothing the expectations are very low so so you know I think China does offer some opportunity but again.
You know I'd be very selectively -- and you're right I mean the basic materials.
Some of the energies like natural gas like a DeVon.
Energy is trading almost at recessionary lows when I you know when we in our analysis think that the economy's.
Global economies we'll do quite well.
So so take advantage of these low prices and low valuations in those areas.
Rather than chasing companies that are hit new highs you know very similar to what we did call is six months ago when we recommend taking profits and apple and everybody loved it.
Hello my final yet on how do you -- -- for natural you know who that definitely get did I hear right.
As said by the way is as a as an apple stockholder I heard right your your -- -- and apple now.
Yeah I mean you know further for the -- -- we sold it 6900000070702.
I think buying it now.
We bought today you know fort fort forty fort -- -- nine I'm not saying it's on a bottom David but I I think.
That's what you wanna do when it's out of favor by good quality company might well now.
You know that take take profits when everybody loves of.
Were gonna put all both of your picks up on the FaceBook page and and again reform act weren't a perfect example of what he just talked about it's it's certainly a low right now by the way look at where the markets that I folks.
67 that's just about where the futures were showing after the unemployment.
Numbers came out a lot of people say -- Canada at least get up to the -- futures were at 8:30 this morning.
It ended up doing exactly that -- Lance Greg Johnson good to see you both guys thank you very much over the weekend it got.
