Stocks This Week: Sell Short Altria And Cerner

The end-of-month (EOM) period of strength runs from July 30 to August 4. This is the second shortest EOM period of the 12. It has been up 65.4% of the time for an average 0.50% gain. Annualized, these numbers are above the average EOM period and represents the next period of short-term cyclical strength. However, the short-term cycle readings for each day are bearish. I think we will see a flat-to-down week.

Here are stock recommendations for a volatile week.

Altria MO ’s daily cycle peaks on the 5th. The weekly cycle tops on the 12th. Eight of the last nine weekly short signals have been effective. The stock has risen on the 4th only 37% of the time, the weakest day of the month. The $38-$39 area is a likely target. Technically, the stock is showing lower momentum highs.  

Chart 1

Chart 2

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Chart 3 shows that the daily cycle for Cerner CERN topped on the 26th. The first week of August has been the weakest in the month of August. On average, the shares have fallen 3% to 4% from the first through the 10th over the last 32 years. Both the weekly and the monthly cycles are declining. The stock is likely to fall in the coming week to the $65 area or lower. Relative strength has been falling, hitting a new low last Friday.  

Chart 3

Chart 4

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