Stocks To Buy In A Stock Pickers’ Market

This is my favorite type of market. When you get this seesaw action back and forth, it can feel like it’s impossible to make money. Indexes move in a positive direction for a few days then reverse and come back down. The trading range becomes tighter and tighter, while the market resists any breakout to the upside or breakdown below. This is the type of market that drives the guys who buy the whole market crazy.

Well I’m not one of those guys. I’m the guy that’s out here finding great stocks to buy while the index moves back and forth. I’m armed with a special kind of ammunition. The sort of heavy artillery the Zacks Rank gives me.

If you want to get out there and find great stocks in any market, you’ve got to look for the stocks that are in strong industries that have strong histories of good earnings and bullish analysts upping their estimates. While the rest of the crowd is just going along with the herd, I actively seek out the strongest stocks in any market.

Here I’m looking for Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) stocks that have a Momentum Style Score of “B” or better. That way I get exposure to stocks that have had recent earnings surprises, an uptick in volume, and have strength relative to the market. When the market is heading sideways and there are stocks that are breaking down, then there are obviously strong stocks that are breaking out as well. Using this screen I can find those breakout winners.

Cadence Design (CDNS – Snapshot Report)

Cadence Design Systems, Inc. develops, sells, leases, and licenses electronic design automation (EDA) software, emulation and prototyping hardware, verification intellectual property (VIP), and design intellectual property (design IP) for semiconductor and electronics systems industries worldwide.

The push higher since the last earnings report has evolved into an aggressive breakout. Volumes have increased recently and shares seem to have leapfrogged resistance at $22. An overbought commodity channel index (CCI) has cooled off a bit recently, coming down from nearly 300 to 88.21. Below $22 the next level of support is $21.50.