It seems odd to be recommending selling stocks right now. U.S. equities have been on a tech-fueled tear to new highs since August — completely ignoring the seasonal headwinds normally present in September and October.
But I’m going to do it anyway. Even though, historically, November marks the beginning of the best six-month stretch for stocks.
Why? Because the market is in an extreme level of overconfidence. It’s badly overbought and is navigating a narrow breadth, leaving it prone to a downside reversal on any number of catalysts.
These include President Trump’s tax plan, his pick for Federal Reserve Board Chair and the specter of a bout of wage-push inflation that could force the Fed to tighten policy much more aggressively.
In response, here are seven stocks to consider selling as we approach Thanksgiving:
Blue-Chip Stocks to Sell in November: Chevron (CVX)
Chevron Corporation (NYSE:CVX) shares are struggling to reclaim their 50-day moving average after breaking down on Friday, falling out of a two-month consolidation range and ending a four-month uptrend.
The catalyst was the reporting of quarterly results, which drove a sell-the-news dynamic: Earnings of $1.03 per share beat estimates by six cents on a 20.1% rise in revenues.
On a seasonal basis, energy stocks tend to underperform between the end of September and the end of January — putting us right smack in the middle of a period of weakness.
The company will next report results on Jan. 26 before the bell. Analysts are looking for earnings of $1.23 per share on revenues of $36.45 billion.
Blue-Chip Stocks to Sell in November: General Electric (GE)
General Electric Company (NYSE:GE) shares remain in full meltdown mode, extending a downtrend that started in April to return to levels not seen since 2013.
This caps a total decline of more than 33% from the highs set in the summer of 2016. Speculation is swirling that the company has hired Morgan Stanley to sell assets ahead of the November 13 Investors Day.
The company will next report results on January 19 before the bell. Analysts are looking for earnings of 28 cents per share on revenues of $34.12 billion.
When the company last reported on Oct. 20, earnings of 29 cents per share missed estimates by 20 cents despite an 11.5% rise in revenues.
Blue-Chip Stocks to Sell in November: Merck (MRK)
Merck & Co., Inc. (NYSE:MRK) shares are falling out of the sky, down some 16% from their September high on a number of headwinds including regulatory uncertainty, political impetus to do something about high drug prices, and the threat of competition from Amazon.com, Inc. (NASDAQ:AMZN) moving into the drug delivery space.
MRK also has some idiosyncratic issues in play, with shares slammed last week on news it withdrew its application for KEYTRUDA from European markets.
The company will next report results on February 2 before the bell. Analysts are looking for earnings of 96 cents per share on revenues of $10.5 billion.
When the company last reported on Oct. 27, earnings of $1.11 beat estimates by eight cents on a 2% decline in revenues.
Blue-Chip Stocks to Sell in November: Pfizer (PFE)
Pfizer Inc. (NYSE:PFE) shares are dropping out of their recent consolidation, losing their 50-day moving average for the first time since August and jeopardizing the 16% rally off of its June low.
Biotech stocks suffer a period of historic seasonal weakness between the beginning of October and the middle of December, contributing to the nervousness investors are demonstrating.
The company will next report results on Oct. 31 before the bell. Analysts are looking for earnings of 65 cents per share on revenues of $13.2 billion.
When the company last reported on Aug. 1, earnings of 67 cents beat estimates by a penny on a 1.9% drop in revenues.
Blue-Chip Stocks to Sell in November: Verizon (VZ)
Verizon Communications Inc. (NYSE:VZ) shares are under pressure, threatening to fall below its 50-day moving average and lose its four-month consolidation range, on worries regarding persistent competitive pressures in the wake of reports a possible tie-up between T-Mobile US Inc (NASDAQ:TMUS) and Sprint Corp (NYSE:S) could be off the table.
The company will next report results on Jan. 23 before the bell.
Analysts are looking for earnings of 88 cents per share on revenues of $33.2 billion. When the company last reported on Oct. 19, earnings of 98 cents beat estimates by a penny on a 2.5% rise in revenues.
Blue-Chip Stocks to Sell in November: AMD (AMD)
Advanced Micro Devices, Inc. (NASDAQ:AMD) shares are dropping out of a year-to-date trading range near highs around $15 as some of the wind is sucked out of the narrative surrounding cryptocurrencies and AI/self-driving vehicles.
That is, AMD stock enjoyed a massive rally out of its early 2016 lows, gaining nearly 800%, but a recent downgrade from Morgan Stanley is dampening sentiment.
The company will next report results on Jan. 31. Analysts are looking for earnings of five cents per share on revenues of $1.4 billion.
When it last reported on Oct. 24, earnings of 10 cents per share beat estimates by two cents on a 25.7% rise in revenues. Management guided for a decline in revenue in the fourth quarter.
Blue-Chip Stocks to Sell in November: Amazon (AMZN)
Amazon shares are going vertical — making it an odd choice for this list — as investors foam at the mouth over its recent earnings report and an air of invincibility for the e-commerce giant.
Shares have gained more than 15% over the past few days cutting through the $1,000-a-share level that’s provided resistance for months.
But it looks like too-far, too-fast for my eyes amid a steady decline in operating margins as the company’s AWS cash cow feels the impact of competition from the likes of Microsoft Corporation (NASDAQ:MSFT) and others.
The company will next report results on Feb. 1 after the close. Analysts are looking for earnings of $1.78 per share on revenues of nearly $60 billion.
Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
