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Analyst: Greek Crisis An 'Opportunity' To Buy Europe, Biotech & SMID-Cap Discretionary

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Technical tea leaves suggest buying European stocks, biotech and small-to mid-cap consumer discretionary companies, an analyst said Monday.

Ari H. Wald, a technical analyst at Oppenheimer, also recommended selling small-to mid-cap utilities.

Wald recommended the Euro Stoxx 50, an index of blue-chip Eurozone stocks, "because we're encouraged about the development of a long-term relative base versus the MSCI World Index."

An exchange-traded fund that tracks the index, SPDR EURO STOXX 50 ETF (NYSE: FEZ), was off 4 percent Monday.

Wald also suggested biotech stocks, because he said the sector has averaged a 9.9 percent gain in the third quarter, over the past 25 years.

"We recommend buying the iShares Biotech ETF (NASDAQ: IBB) into its $357-$368 support range," Wald said.

The fund traded recently at $364.27, down $8.51.

Small- and mid-cap consumer discretionary stocks are "breaking higher on a relative basis," according to Wald.

From the consumer group, Wald recommended Jarden Corp (NYSE: JAH), Kirkland's, Inc. (NASDAQ: KIRK) and Live Nation Entertainment, Inc. (NYSE: LYV).

Wald also recommended three restaurant companies: Jack in the Box Inc. (NASDAQ: JACK), Sonic Corporation (NASDAQ: SONC) and Wendys Co (NASDAQ: WEN).

Among utilities, which Wald said "continue to break down on a relative basis, he suggested selling Black Hills Corp (NYSE: BKH) and National Fuel Gas Co. (NYSE: NFG).

The S&P 500 is down about 2 percent in the past five trading days.

Wald said that on average when the S&P 500 ends June on a downward trend, it has traded positively during July only 41 percent of the time since 1950.

Posted-In: Ari H. Wald OppenheimerAnalyst Color Technicals Reiteration Analyst Ratings Trading Ideas

 

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