Just when things seemed to be going well, Larry Kudlow brought back panic.
Once the National Economic Council Director told Fox News there was “pretty sizable distance” in reaching an agreement with China, markets fell apart. The Dow Jones fell 220. The NASDAQ was down 86. The S&P 500 tumbled 25.
Adding to the volatility, President Trump said he would not meet with Chinese President Xi Jingping before the March 2019 deadline.
In short, if there’s no progress, markets could begin to pull back severely.
In fact, we could see the Volatility Index (VIX) spike again as it did in December 2018.
Should that happen some of the best ways to safeguard your portfolio is with trades that spike along with volatility, including:
- VelocityShares Daily 2x VIX Short-Term ETN (TVIX)
- The iPath S&P 500 VIX Short-Term Futures (VXX)
- ProShares Ultra VIX Short-Term Futures (UVXY)
Other than those opportunities, we are spotting some oversold stocks on market including:
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Opportunity No. 1 – Glu Mobile (GLUU)
The stock recently pulled back on earnings and guidance, but we believe the pullback is overdone. For one, its games continue to be big profit makers, including Design Home, Tap Sports Baseball, and Covet Fashion. And two, the company’s pipeline may be stronger than it was in 2018 with its World Wrestling Entertainment (WWE) release for example.
Opportunity No. 2 — Synaptics Inc. (SYNA)
After a big pullback in the latter part of 2018, the stock is just beginning to recover with substantial growth catalysts, including the Internet of Things (IoT). Just months ago, the company shocked the market with better than expected guidance for revenue of $410 million to $440 million, and EPS guidance of $1.25 to $1.55. If that guidance holds, the company should easily beat Street estimates calling for EPS of $1.37 on revenue of $425 million.
Opportunity No. 3 — FireEye (FEYE)
At the end of 2018, cybercrimes cost up to $1 trillion. By 2021, they could cost us nearly $6 trillion. Still, despite that fear, many companies and government agencies still are not prepared. Only 38% of global organizations are prepared for a cyberattack. What makes it worse is 54% of companies have been attacked – and still aren’t ready for another one down the road.
At the moment, FEYE customers are starting to sign longer contracts with the company. Even better, FEYE expects to earn five cents a share on revenue of $216 million. With the cyber security hotter than ever, we strongly believe FEYE could be a great long-term winner.
From last week’s 2/3/19 watchlist we had some great performers, including:
- Apple (AAPL) closed at $166.52 on Feb. 1, 2019, and currently trades at $169.93 a share.
- NIO Inc. (NIO) closed at $7.90 on Feb. 1, and currently trades at $7.50 after hitting $8.04.