S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Want to Increase Your Conversion Rates? This Is the Biggest Threat to Your Success.
Can A.I. Launch You into Your Next Trading Frontier? (Ad)pixel
Russia accused of 'kidnapping' head of Ukraine nuclear plant
EU chief: New Greece-Bulgaria gas pipeline 'means freedom'
How the Wealthy Elite are Picking Stocks (Ad)pixel
Danish Energy Agency says Nord Stream 2 gas pipeline under Baltic Sea appears to have stopped leaking gas
UK train strikes and energy hikes add to a week of turmoil
How the Wealthy Elite are Picking Stocks (Ad)pixel
Russia blindfolds, detains Ukraine nuclear plant chief
NIH to fund unproven ALS drugs under patient-backed law
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Want to Increase Your Conversion Rates? This Is the Biggest Threat to Your Success.
Can A.I. Launch You into Your Next Trading Frontier? (Ad)pixel
Russia accused of 'kidnapping' head of Ukraine nuclear plant
EU chief: New Greece-Bulgaria gas pipeline 'means freedom'
How the Wealthy Elite are Picking Stocks (Ad)pixel
Danish Energy Agency says Nord Stream 2 gas pipeline under Baltic Sea appears to have stopped leaking gas
UK train strikes and energy hikes add to a week of turmoil
How the Wealthy Elite are Picking Stocks (Ad)pixel
Russia blindfolds, detains Ukraine nuclear plant chief
NIH to fund unproven ALS drugs under patient-backed law
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Want to Increase Your Conversion Rates? This Is the Biggest Threat to Your Success.
Can A.I. Launch You into Your Next Trading Frontier? (Ad)pixel
Russia accused of 'kidnapping' head of Ukraine nuclear plant
EU chief: New Greece-Bulgaria gas pipeline 'means freedom'
How the Wealthy Elite are Picking Stocks (Ad)pixel
Danish Energy Agency says Nord Stream 2 gas pipeline under Baltic Sea appears to have stopped leaking gas
UK train strikes and energy hikes add to a week of turmoil
How the Wealthy Elite are Picking Stocks (Ad)pixel
Russia blindfolds, detains Ukraine nuclear plant chief
NIH to fund unproven ALS drugs under patient-backed law
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Want to Increase Your Conversion Rates? This Is the Biggest Threat to Your Success.
Can A.I. Launch You into Your Next Trading Frontier? (Ad)pixel
Russia accused of 'kidnapping' head of Ukraine nuclear plant
EU chief: New Greece-Bulgaria gas pipeline 'means freedom'
How the Wealthy Elite are Picking Stocks (Ad)pixel
Danish Energy Agency says Nord Stream 2 gas pipeline under Baltic Sea appears to have stopped leaking gas
UK train strikes and energy hikes add to a week of turmoil
How the Wealthy Elite are Picking Stocks (Ad)pixel
Russia blindfolds, detains Ukraine nuclear plant chief
NIH to fund unproven ALS drugs under patient-backed law

How to Find and Determine Which Stocks Are Worth Holding Through a Bear Market

How to Find and Determine Which Stocks Are Worth Holding Through a Bear Market A bear market can trigger panic to a point where investors literally throw the baby out with the bath water. Bear markets always recover. The question is from what point and when. A bear market incites fear and capitulation on the way down and regret and fear of missing out (FOMO) on the way up. While professional money managers preach the stay the course mentality, the reality is that not all stocks are worth holding through a bear market. Many stocks will collapse and never recover. Bear markets are times to reassess which stocks are worth holding through the course of a bear market for a recovery afterwards. It’s also a time to go shopping for promising stocks that may have been too expensive during the bull market. Here’s how to determine which stocks are worth holdings through a bear market. The focus is on determining which stocks will participate in the recovery after the bear market passes.

Blue Chip S&P 500 Leaders and Best-of-Breed Stocks

The S&P 500 and benchmark indexes have not only recovered but surpassed prior highs from every bear market. However, keep in mind, the benchmark indexes always get adjusted to kick out the losing stocks and add winning stocks. Therefore, don’t assume your stocks will all recover based on the benchmark indexes. The best-of-breed stocks in the S&P 500 index are the most likely to lead the recovery. Always look for quality stocks with fortress balance sheets, relevant trends, leadership positions in the industry, and liquidity.


Value Stocks

A bear market can be relentless, and panic can crash stocks below their intrinsic value levels. The most basic valuation is the cash-per-share (CPS). Stocks trading at or below the CPS levels can be considered value plays. If a stock is trading below its CPS, then technically the business is free. Keep in mind, there may also be fundamental reasons for the weak valuations, so be sure these are not the anchor (IE: significantly lowered guidance, bankruptcy).

Secular Trend Stocks

Be aware of major secular trends in place like digital transformation, cloud computing, data warehousing and analytics, artificial intelligence, electric vehicles, clean energy, and so forth. Look for the best-of-breed or top tier stocks in these trends. If the top tiers are too expensive, then worth your way down. A key way is to find exchange-traded-funds (ETFs) specializing in these themes and then look at the weightings of its holdings. Make sure the ETFs have liquidity and volume since you might even consider taking the ETF rather than a single stock. For example, the First Trust Cloud Computing ETF (NASDAQ: SKYY) with 420,000 shares volume a day is preferrable over the Wedbush ETFMG Global Cloud Technology ETF (NASDAQ: IVES) with on 2,500 shares volume a day. From there, you can look up the holdings of the First Trust Cloud Computing ETF to get ideas on which stocks to consider taking a position in. The heaviest weighted holding is Pure Storage (NYSE: PSTG) with a 3.83% weighting trading around $26.82. As it turns out, the Company had an outstanding fiscal Q1 2023 earnings report on June 1, 2022. The Company grew top line revenues 50% to $630.4 million, with a record operating profits of EPS of $0.25 beating analyst estimates for $0.05 by $0.20. They also raised its forward guidance to $2.66 billion versus $2.59 consensus analyst estimates. The Company has $1.4 billion in remaining performance obligation (RPO) up 26%, subscription services revenues were up 29%,  non-GAAP gross margin of 70.6%, and total cash of $1.3 billion.

Turnaround Beaten Up Speculation Stocks

As you go about your research, you will inevitably find stocks in secular trending sectors that are frankly cheap. Many of these stocks are under $10 or $5 for a reason and most will likely not recover. However, there will be many that are worth a speculative position as the percentage gains are easier to rack up with cheaper stocks . It’s also easier for a $5 stock jump 60% to $8, than a $100 stocks jumping to $160. The largest position size in the SKYY ETF turns out to be Rackspace Technology (NASDAQ: RTX) with a 12.7 million share position.

How to Find and Determine Which Stocks Are Worth Holding Through a Bear Market

PSTG Chart Analysis and Entry Levels

Once you find stocks worth holding or taking a position in during a bear market. It’s time to analyze them technically on a chart. In this example, PSTG looks solid fundamentally now let’s look at PSTG using the rifle charts on a weekly and daily time frame provides for a precision view of the price action and determine entry levels. The weekly rifle chart downtrend stalled with a flat 5-period moving average (MA) at $25.94 followed by the 15-period MA at $26.75 and 50-period MA at $27.75. The weekly 200-period MA support sits at $20.68. The weekly lower Bollinger Bands (BBs) sit at $19.18. The downtrend bottomed of the $21.58 Fibonacci (fib) level. The weekly market structure low (MSL) buy triggers on a breakout through the $29.17 level. The weekly stochastic is trying to bounce up through the 30-band, which is still nearly oversold. The daily rifle chart has been uptrending with a rising 5-period MA support testing at $26.78 followed by the 15-period MA support at $26.05. The daily stochastic has risen to the overbought 80-band level and nearing the daily upper BBs at $27.87. The daily 200-period MA resistance sits at $28.46. Prudent investors can patiently wait for pullbacks on the daily stochs and look for opportunistic pullback entry levels near the $25.94 fib, $24.17 fib, $23.40 fib, $22.13 fib, $20.68 fib, 19.27 fib, and the $17.97 fib level. Upside trajectories range from the $34.21 fib level up towards the $43.76 fib level.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
First Trust Cloud Computing ETF (SKYY)N/A$60.41-1.2%1.34%N/AN/AN/A
Wedbush ETFMG Global Cloud Technology ETF (IVES)N/A$28.61+0.3%N/AN/AN/AN/A
Rackspace Technology (RXT)
2.317 of 5 stars
$4.08-6.4%N/A-4.39Hold$9.20
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Pure Storage right now?

Before you consider Pure Storage, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Pure Storage wasn't on the list.

While Pure Storage currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Jea Yu

About Jea Yu

Contributing Author: Trading Strategies

With over 20 years of active participation and analysis of the US equities, options and futures markets, Mr. Yu brings fresh insights into the workings of the financial markets. He has published four books by esteemed publishers McGraw-Hill, John Wiley & Sons, Marketplace Books and Bloomberg Press. His brainchild, the Underground Trader, was voted Forbes Best of the Web for four consecutive years under the active trader category. He has been a featured speaker all over the country at various expos and seminars who enjoys a standing-room-only reception in the largest convention halls from New York to Las Vegas. He has been quoted and featured in USA Today, Wall Street Journal, Traders Magazine and the Financial Times and various trade publications like Stocks & Commodities, Active Trader and Online Investor. Mr. Yu has a B.A. in Liberal Arts and minor in Business Administration from the University of Maryland.
Contact Jea Yu via email at JeaYu21@gmail.com.
Free Email Newsletter

Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:

Most Read This Week

Recent Articles

Search Headlines:

Latest PodcastFed Raises Rates: 3 Stocks to Watch Newmont Mining, Walmart, AMC

Axel Merk, President and CIO of Merk Investments has three very different stocks he frames within the current market and economic conditions.

MarketBeat Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | contact@marketbeat.com | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Privacy Policy | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart's disclaimer.