Break Out Money Guys

Position Update: Mid-January

Crypto is surging, while the S&P 500 and Nasdaq are reaching all-time highs, seemingly unfazed by high interest rates. At the same time, investors are rushing to position themselves in the age of AI, scrambling to find value in this dynamic market.

I see two narratives dominating right now: one insists that failing to invest now means missing out on massive opportunities, while the other warns that the market is severely overvalued and at risk of unraveling. The challenge we face is finding a way to invest wisely amidst the fear and volatility.

Here are eight stocks I think are worth keeping an eye on. These could benefit if speculation broadens, while their lower valuations might help them hold up better in a selloff.

Key Positions and Outlook

1. NKE

Nike is a top consumer discretionary stock that could benefit if the consumer recovers. The company remains far ahead of competitors in revenue, but its growth is likely to get worse before getting better.

  • Facing rising competition from trendy names like On, HOKA, and New Balance, which are capitalizing on current consumer preferences.
  • Revenue is stagnating but has still grown since Covid.

2. AMD

AMD is facing pressure as NVDA continues to dominate the AI and semiconductor space. After a year long downtrend, the stock is bouncing off its 200-week moving average and appears oversold based on the weekly MFI.

  • Could benefit if capital flows from NVDA to seek value.
  • Growth potential remains strong.

3. WBA

Walgreens has been severely beaten down as other companies eat into its market share. However, there’s been unusually high volume since 2024. This is reminiscent of accumulation patterns from 2008–2012, but on a much larger scale, suggesting a potential trend change.

  • Oversold weekly MFI indicates the stock could be near a bottom.
  • Currently valued below its asset value (price-to-book ratio).

4. KRE (short position)

The regional banking ETF saw a large jump on Trump’s win back in November, but has since weakened. This makes it an appealing short position as higher interest rates and decreasing demand for mortgages may weigh on the sector.

  • Regional banks are typically more exposed to market volatility than larger, national banks.

5. BA

Boeing is currently trading near 2017 levels. With monthly support around $150/share, the stock is becoming attractive.

  • Long-term growth depends on a recovery in aviation demand and production.
  • Holds a dominant position in the aerospace industry, where competition is limited.

6. PEP

PepsiCo is a leading consumer staple and a safe-haven in volatile markets. I’m a buyer between $140–$130 per share or lower. 

  • Reliable revenue streams.
  • Offers a hedge against my bearishness if the consumer strengthens.

7. OXY

Occidental Petroleum is a major player in the energy sector, currently holding monthly support around $48/share. It recently broke out of its downtrend, making it worth a look.

  • Strong cash flow potential if energy prices stabilize or rise.
  • Berkshire Hathaway’s sixth-largest holding.
  • Needs to see a sustained uptrend after months of selling off.

8. INTC

Intel has struggled recently, facing profitability issues and a lack of good news. However, the company offers a potential value play if it can shift sentiment in its favor, even with a slight improvement.

  • Long-term business with strong infrastructure.
  • Potential to shift into manufacturing chips for other companies rather than being reliant on innovating.
  • Opportunity to accumulate while the stock stays out of the spotlight.

Other Positions

  • DVN: Similar setup to OXY, with strong monthly support.
  • TQQQ and SPY: Short positions to profit if valuations drop. Extremely cautious position.
  • PYPL: Strong market position in eCommerce despite a lack of attention recently.

The market is undeniably bullish, but it’s worth wondering if some of that optimism is running ahead of reality. There’s no way to know exactly how things will play out, but I believe that now is a time to be cautious. An unbelievable amount of growth has occurred in just the last year and it doesn’t seem like it would take much to unwind it.

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