We are removing SoFi Technology (SOFI) from our long ideas because it logged two closes below our stop-loss, although it looks poised for a short-term oversold bounce, so sellers may want to wait a week or two.
Given the weak tape this week, we are adding a more defensive consumer staples stock, Pilgrim’s Pride (PPC), to our long ideas:
PPC made a higher low earlier this month, relative to June, which is suggestive of a long-term turnaround. PPC has seen improvement in our long-term indicators, as well, and the stock has cleared major resistance in its ratio versus the S&P 500 Index (SPX) supporting outperformance.
PPC reacted positively to earnings yesterday, helping to preserve a bullish upturn in its weekly stochastics and positive short-term momentum despite the weak tape. The weekly MACD has also whipsawed higher, supporting intermediate-term upside follow-through.
The next major resistance for PPC is at the weekly cloud model (shaded area on the chart below) near $27.60. Given the skittish market of late, we would make sure to use a stop-loss, which can be placed under short-term support at ~$23.20.
Pilgrim’s Pride (PPC, $24.46)
Target: $27.60
Stop-Loss: $23.20