It was not a week for the faint of heart as the markets posted daily roller coaster type swings that had one day's action wiping out the prior day. The S&P 500 was down as much as 17% at one point before Friday's relief rally helped stem losses.
These chaotic swings are typical of the beginning stages of a bear market – particularly one that's being driven by fear due to a deadly viral outbreak that has no cure in place. While most investors may be better suited to sit out the current volatility, I've uncovered two stocks that a) have stable growth prospects, b) are in defensive areas of the market and c) have attractive charts.
DAILY CHART OF REPLIGEN CORP. (RGEN)
This first stock is a well-known Biotech company that develops products required to manufacture certain drugs, including monoclonal antibodies, which are currently used to fight cancer. Given their properties, these antibodies are now being explored as a possible defense against the COVID-19 virus as well.
The company is Repligen (REGN) and they posted strong Q1 earnings last month while also providing guidance for continued growth into 2020 and beyond. REGN has made several strategic acquisitions over the past several years that have set them up for success even absent any virus-related income possibilities.
In the chart above, we can see that REGN has held in a tight trading range while the broader markets have suffered from heavy distribution over the last 2 weeks. Even more bullish has been today's price break back above its key 50 day moving average on above average volume. This move back above key resistance points to further near term upside for Repligen Corp. in an otherwise difficult environment for many stocks.
WEEKLY CHART OF DIGITAL REALTY TRUST, INC. (DLR)
The continued spread of the COVID-19 virus over the past several weeks has many businesses rushing to cloud computing, particularly as more companies are shuttering their offices and having workers remain at home while continuing to work remotely. This shift of more companies adapting to cloud computing has increased the demand for digital centers that house data in climate-controlled buildings, with servers that help keep them safe.
Most of these facilities are part of Data Center REITS, such as Digital Realty Trust, Inc. (DLR), which operates 210 data centers globally. This 3.1% yielder spiked to a new high last week following a pre-announced merger with cloud data center InterXion. The acquisition will help DLR grow beyond their portfolio of 210 data centers and expand their footprint in Europe. All of this has analysts raising estimates for both this year and next.
The currently difficult market environment has been tough for many investors, as each new headline pulls the market in a different direction. While there are bright spots, such as the stocks highlighted above, the price action of the past 3 weeks points to a highly unsettled market that will require time to stabilize before resuming its recent uptrend.
The good news is the period after a bear market reversal is one of the most profitable cycles, and you'll want to cultivate a watch list of stocks in preparation. For those who'd like to be alerted to when this shift takes place and what the best candidates are, I urge you to trial my bi-weekly MEM Edge Report for 4 weeks at a nominal fee.
My work uses a proven system that's I've shared with professional fund managers for years, as it has successfully identified every bear market reversal. In addition to sharing that system with you, the MEM Edge Report provides insights into what phase of the market's recovery period we're currently in by using historical precedent models.
I hope you'll take advantage of my special offer and join the hundreds of other subscribers who've been receiving regular alerts during this unsettling period for the markets. Click Here to trial the MEM Edge Report!
Mary Ellen McGonagle