MKM's Jon Krinsky: Buy Low Volatility Stocks, Sell High Beta Stocks
After the worst opening week for the S&P 500 in history, MKM Partners analyst Jonathan Krinsky now believes that traders should be ditching high-volatility stocks in favor of safer, low-beta names. The S&P 500 dropped nearly 6.0 percent in the first week of 2016 trading, its largest weekly decline since 2011.
According to Krinsky, the market is likely now oversold in the short-term, as the S&P 500 currently has less than 4.0 percent of its components above their 10-day simple moving average.
“This should set up a bounce early this week, but with the primary trend shifting from neutral to bearish in our view, we are more interested in selling into strength than buying weakness,” he explains.
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Disclosure: the author holds no position in the stocks mentioned.
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