Boeing and other Dow stocks look attractive but ‘that’s really the problem,’ warns trader

The Dow is suffering its worst month since 1931, and a handful of stocks are leading the decline.

Industrial names such as Boeing and United Technologies, oil companies Exxon Mobil and Chevron, and financials stocks American Express and Goldman Sachs are all sharply lower in March.

After such a steep drop, Joule Financial President Quint Tatro warns against bargain hunting.

“They all look attractive, that’s really the problem. We’ve tried to dabble in a couple names here and there and we get our heads handed to us. It’s been very, very difficult,” Tatro said on CNBC’s “Trading Nation” on Monday. “I think valuations are really out the window.”

United Technologies, for instance, trades at 9 times forward earnings, its lowest valuation since 2009.

“I would caution investors that if they’re looking at the Dow and saying, ‘Well, the Dow has seen such a terrible decline.’ Be very careful of trying to handpick the investments that that might find a bottom first. Rather than do that, look at just generally the ETF. The Dow at some point will recover; all 30 stocks may not be the same,” said Tatro.

During the same interview, Ari Wald, head of technical analysis at Oppenheimer, said the Dow’s outperformers could still offer safety as the blue-chip index tumbles.

“It’s too early to bottom fish in the hardest hit stocks. Looking at the constituents within the Dow, this means high momentum names like Microsoft could continue to outperform versus low momentum names like Exxon Mobil,” Wald said. “You can see a real stark difference in their trend where you have Microsoft really just correcting back into summertime lows of last year while Exxon is at its lowest point since 2002.”

Microsoft has fallen more than 13% this year; Exxon Mobil is down 55%. 

“In terms of sectors as well, we expect tech to outperform versus energy. So overall, I think that’s an important point. The weak has gotten weaker. And I think we expect this to continue for now,” Wald said.


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