We’ve just released this quarter’s Ultimate Four report, which includes four stocks our team believes have the greatest upside potential over the upcoming quarter. This latest report features favorite stocks from Kevin Cook, Neena Mishra, CFA, FRM, Ryan McQueeney and Brian Hamilton. Log on to Zacks.com to see these stocks today.

If you’re feeling a little queasy after the market’s late-day plunge, you’re not alone. The major indices were poised for another strong session to start the week; in fact, the Dow crossed above 26,000 for a time. Then the bottom dropped out in one of the sharpest single-day reversals in recent years. 

The NASDAQ saw the sharpest slide of the Big 3 with a slump of 0.51% to 7223.7, while the S&P was off 0.35% to 2776.4. The Dow almost moved back into positive territory before the closing bell, but finished with a slight loss of 0.04% to 25,792.9. The Russell 2000, which had been making new highs along with its larger counterparts of late, plunged 1.19% to 1573. 

Today’s drop marks only the second down day for the three major indices in 2018. While fears over a possible government shutdown is a popular reason for today’s pullback, the bottom line is that this market has been running hot for a while and could probably benefit from a cooling off period. Given this environment, the editors aren’t overly concerned about the reversal.

“We have just come too far too fast and could use some healthy digestion,” said Jeremy in Counterstrike.

In portfolio action on Tuesday, Technology Innovators added a tech company that has beaten quarterly earnings estimates for more than 3 years now. Black Box Trader swapped out 6 positions this week…and five of them were positive with a double-digit winner. Also, Short List replaced one name. Learn more below: 

Today’s Portfolio Highlights:

Technology Innovators: Brian Bolan expects technology to “kill it” this earnings season…and he found a company that will help the portfolio to capitalize. Analog Devices (ADI) has beaten the Zacks Consensus Estimate for the last 13 quarters, so the editor is feeling pretty good about the company’s next report in mid-February. He thinks there’s a good chance that ADI will make the $105 – $110 range in the coming weeks. Plus, the stock has good value and rising earnings estimates, which is underscored by its status as a Zacks Rank #1 (Strong Buy). Learn more about this new addition. 

Black Box Trader: The portfolio replaced six names in this week’s adjustment, which comes a day later than usual due to the MLK holiday on Monday. Five of the sells were positive, including a double-digit winner. Here is what left the portfolio today:

• Delek Holdings (DK, +17.4%)
• Tailored Brands (TLRD, +9.4%)
• Sprouts Farmers Market (SFM, +4.6%)
• XPO Logistics (XPO, +1.9%)
• Allstate Corp. (ALL, +0.6%)
• Tri Pointe Group (TPH)

The new buys that replaced these names are:

• Leucadia National (LUK)
• Crocs Inc. (CROX)
• Nordstrom Inc. (JWN)
• Macy’s Inc. (M)
• Sysco Corp. (SYY)
• Tyson Foods (TSN)

Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.

Zacks Short List: Only one change in this week’s adjustment. The portfolio short-covered GoDaddy (GDDY) and replaced it with Murphy Oil (MUR). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Zacks Counterstrike: Fibonacci. If you’re a fan of technical analysis or a regular reader of Jeremy Mullin’s Counterstrike service, you’ve probably heard of this technical indicator. But do you really understand it? More importantly, do you know how to use it to find profit potential? In this week’s Zacks Confidential, Kevin Matras has asked Jeremy to provide a crash course on Fibonacci. Learn what this method is all about and get three recommendations that were picked from it: Fibonacci Trading 101.

All the Best,
Jim Giaquinto

Recommendations from Zacks’ Private Portfolios:

Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks’ private recommendation services. If you would like to follow our Buy and Sell signals in real time, we’ve made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks’ portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we’ve predicted with an astonishing 80%+ accuracy). Click here to “test drive” Zacks Ultimate for FREE >>

Zacks Investment Research