A couple of Dow stocks made the naughty and nice list this year.
Big Tech led the indictments, with Apple, Microsoft and Salesforce citing the Dow as Best Achiever in 2020. Chevron, Boeing and Walgreens scored the worst performers on the index.
Craig Johnson, Chief Market Technician at Piper Sandler, and Danielle Shay, Director of Options at Simpler Trading, checked this list – not just once, but twice – and picked their favorites for the New Year.
“Stay here with the winners,” Johnson told CNBC’s “Trading Nation” on Wednesday. “Apple definitely made Santa’s lovely list this year.”
Apple is by far the best Dow performer of 2020. Its stocks are up 78%, almost twice as much as Microsoft. The share is around 5% above the record from early September.
“If you look at the graph, you’re still in a very well-defined uptrend. You can see that we’ve come back, successfully retested it, and are testing those old highs again,” said Johnson. “So from my point of view, I’m sticking with Apple. I think it’s a gift that just won’t be returned this year.”
Shay said in the same interview that he is backing Microsoft for more profits in 2021.
“Microsoft has seen consistent earnings growth, and they also had a very consistent earnings decline two to four weeks prior to this report. Personally, I love buying long calls on earnings streak to take advantage of the surge [implied volatility]In addition to selling put credit spreads that are included in the earnings report, “she said.
Microsoft is expected to show profits in early February.
As for the worst performers, Shay is very optimistic about a turnaround.
“We might see a little Boeing rally, but unfortunately not the other two,” said Shay.
Boeing and Walgreens fell 32% and Chevron 29% in 2020.
Disclosure: Shay holds MSFT.
Disclaimer of liability