The Dow just capped off its best quarter since 1987, gaining 23% between April 1 and the end of June.
While the index is still down around -10% for 2020 with around 80% of the Dow 30 stocks in negative territory for the year, one expert trader says there’s one stock in the index that’s on its way higher.
“There’s several names that we are constructive on that we hold in our portfolios, one of which we like is Home Depot (NYSE: HD),” Todd Gordon, managing director at Ascent Wealth Partners, said this week.
“The building supply stores have remained open during the shutdown. They were deemed essential services, they didn’t have the disruptions that so many other brick-and-mortar shops did. So the housing sector has stayed strong,” Gordon added. “We have low, persistently low interest rates, there’s tight supply on the low end, construction at the middle range.”
Home Depot shares are up nearly 14% so far this year, and gained 40% in the last quarter. Gordon says the stock could still see another run of nearly 41% before it hits resistance.
“Home Depot is in a beautiful kind of parallel uptrend,” Gordon said, adding that the stock is “following a nice stair-step higher and that will show that we don’t have resistance until about $350.”
But while Home Depot shares are a buy for Gordon now, there’s one stock in the index he says investors should steer away from now.
“We continue to be bearish and underweight energy, specifically… avoid Exxon (NYSE: XOM),” Gordon said. “Prices have firmed in the second quarter, [but] there’s just a ton of supply in the market… so it’s going to cap prices.”