Daily Rundown: August 17

BOB LANG: Good morning Action Alerts Plus members. It's Wednesday, August 17, 2022, and it's time for our Daily Rundown. We have a lot to cover today, so let's get to it. Markets are soft a bit this morning. Maybe off about 1% or a little bit less than that across the board as the overbought conditions continue.

We know markets are going to make the most obvious move in the most un-obvious way. So as price oscillators are overbought, put call ratios very, very low, portraying an even-- a very extreme condition of too much bullishness. The 200 day moving average was tagged at yesterday's highs.

So reaching those overbought levels and the important 200 day moving average, we were not surprised yesterday and even today to see the markets peeling off a little bit and becoming a little bit weaker at the moment. That was the first time visiting that important moving average since falling below it in early April.

Now we should be prepared for markets to come in a little bit further, right? Because the stock market has had an enormous run, up over 18% since the middle of June. We continue to hold a lot of cash. We hold some protective positions with the PSQ and the SH, and some defensive names as well too.

So we'll continue to look to add some of those names as we go forward. Now we've been making some moves in the portfolio. Yesterday, we trimmed some Morgan Stanley and we added to Amazon. Yesterday, we-- in the Morgan Stanley reduction, we took some profits off the board. The stock has been on a great run, from the high 70s all the way up to the low 90s yesterday.

And we thought that this is a good time, its stock is up over the 200 day moving average. It's overbought and the MACD is overbought as well, too. Conditions were just ripe to take some money off the table if the market was higher. We funneled those funds into more Amazon shares, which are on the verge of a breakout according to the chart.

After a nice run post earnings, the stock has been consolidating in a nice range between about 139 and 145. And we think it's poised for a run quite a bit higher. Volume trends are positive, price action is bullish. And with higher highs and higher lows on the chart, we do see a gap up way-- all the way as far as 164 that needs to eventually get filled.

So a nice run higher from where the current price is, about 143, up to 164 would be a good profit on these shares. We could certainly see the stock perform well into the end of the year. Now today, we initiated a new name and we took some money off the table in the United Rentals.

So United Rentals has been on a massive run since the middle of June. It's up more than 40% since those lows and are within striking distance of all time highs. July 14, we added some shares at 242. It's made a stunning move since then. We took some prudent action and trimmed profits off the table. It's just what you do in this type of a market.

When you have gains, you take some money off the table and you move it around. In this case, we're moving some money into a new name called Vulcan Materials. This is a name that Chris and I have been watching for quite some time. It hits right at the heart of the infrastructure law, which was passed in 2021.

They-- the company is responsible for producing and distributing construction materials across the globe. Last year, they made a strategic move in buying US Concrete, fortifying their position as a leader in that category. We have had our eye on the name for quite some time and we've thought that this is as good a time as any to put the name in the portfolio as a starter position.

The chart is constructive here, with positive trends and strong technicals. And while we see the stock is overbought, we could be inclined to add if the name comes in a little bit over the next coming few weeks to lower our basis. So that's a wrap for today. Have a great day everyone, and we'll see you tomorrow.