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These 4 stocks showed strength on a day when most other stocks showed weakness. As equity markets plummeted to lower levels than all of 2022 so far, they found buying power and closed on positive territory. Whether they can lead further up is another question, but at the moment it looked like it.
First, here’s how extreme things got on Friday. Put buyers (betting on further down) outnumbered call buyers (betting on backup) at a rate not seen since the pandemic lows of March 2020. The CBOE Stock Put/Call Ratio is so high that it can signal sales exhaustion. Emphasis on “can”.
This is what it looked like:
CBOE Equity Put/Call Ratio, 9 25 22.
This is the type of extreme reading seen when markets tend to skew too far in one direction.
Here are 4 stocks that have found buyers amid the intense selling pressure:
Domino’s Pizza Group (NYSE:DPZ) closed up 3.08%.
Domino’s Pizza Group Daily Price Chart, 9 25 22.
Just as the price touched the mid-May lows, buying returned. This isn’t always the case with other stocks that made lows earlier in the year. For some reason, Domino’s Pizza stock looked good to buyers – check out the strong positive volume.
Home Depot Inc (NYSE:HD) added 0.67% on Friday.
Daily chart from Home Depot, 9 25 22.
The selling brought the stock back to the June lows, and here the buyer jumped in again — similar to Domino’s pizza deal. Whether the purchase will continue, of course, cannot be said. The only thing worth noting here is that the price fought its way into the positive while almost all other stocks ended in the red.
Johnson&Johnson
JNJ
(NYSE:JNJ) is up 0.32%.
Daily chart by Johnson & Johnson, 9 25 22.
This isn’t too surprising as the name tends to be a favorite for mutual funds and ETFs, which are required to own a certain percentage of shares no matter what. In this sense, the drug manufacturer is synonymous with cash for some. Note that the price closed well above the late February low.
Shervin Williams (NYSE:SHW) added 1.52%.
Sherwin Williams daily chart, 9 25 22.
The stock had already fallen below its previous low of 2022 in June and has yet to surpass that low. Nonetheless, a close of 1.52% is a sign that some buyers are poised to re-enter. The specialty chemicals company was downgraded by Bank of America in June
BAK
There are a few other recognizable names that ended the day on a positive note, but these 4 tend to paint a good picture of pockets of resilience amid the stock market’s major pulldown. If this put/call ratio is a decent measure of extreme, then buying here may make sense later.
No investment advice. For educational purposes only.
