Best Mutual Funds Bet On Apple, Berkshire And Medicals To Rise From Down Market

To paraphrase Will Rogers, if you find yourself in a market hole, stop digging. But like many best mutual funds, also keep your eye out for a follow-through day to signal a new uptrend.

Now as the market searches for a bottom, the best mutual funds are placing large bets on Apple (AAPL), Warren Buffett’s Berkshire Hathaway (BRKB) and others to weather the storm and post new gains. Tobacco giant Philip Morris (PM) also makes the list, alongside medical and Big Pharma leaders UnitedHealth (UNH), AbbVie (ABBV), Bristol Myers Squibb (BMY), Anthem (ANTM) and AstraZeneca (AZN).

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Take Apple. With the iPhone maker developing its own payment processing technology, AAPL stock topped the list. It took in a whopping $3.1 billion from the best mutual funds. Philip Morris, UnitedHealth, Berkshire Hathaway, Pioneer Natural Resources (PXD), AbbVie, T-Mobile US (TMUS), and Bristol Myers Squibb also joined Apple in the billion-dollar club.

Big Inflows From Best Mutual Funds

Others names seeing big inflows during this market correction include defense contractors L3Harris Technologies (LHX) and Lockheed Martin (LMT). Leading money managers also took large cumulative positions in Pfizer (PFE), Eli Lilly (LLY), Regeneron (REGN) and CVS Health (CVS).

The best mutual funds also went shopping for retailer sector stocks like Costco (COST), Dollar General (DG), McDonald’s (MCD), BJ’s Wholesale Club (BJ) and Kroger (KR).

With tech stocks out of favor at the moment, bellwether companies like Nvidia (NVDA), Microsoft[ticker symb=MSFT] and Alphabet (GOOGL) are conspicuously absent from the latest report.

Note: Be sure to check these Excel files, updated and published each month, to see all the stocks on the latest list of new buys and list of new sells by the best mutual funds.

Build Custom Stock Screens To Find Top Stocks For Next Uptrend

Track Resilience And Relative Strength In Buys By Best Mutual Funds

Now is not an ideal time to buy. Traditional tech and growth stocks are taking a hit. And the market correction is hampering or hammering most stocks. But as the term implies, a market correction ultimately leads to a righting of the Wall Street ship.

It’s now a waiting game for the market to find a bottom and stocks to complete their chart patterns and offer new buy points. So, continue to build your watchlist in preparation of the next uptrend. Using stock lists and a stock screener helps to generate ideas, track signs of support and resistance in potential stock picks. Also keep a close eye on the relative strength line to see how a stock stacks up against the overall market.

Looking At Apple

Apple is an example. AAPL stock has fallen off the highs it hit at the beginning of the year. As it continues its long consolidation, note that its relative strength line has hit a new 52-week high. That’s a sign of market leadership that shows Apple is outperforming the S&P 500.

As it tries to solidify a bottom, the stock has been testing support and resistance at its 50-day and 200-day moving averages. But as the stock market indexes seem to thwart any rally attempts like a game of Whac-A-Mole, Apple has fallen below both of those benchmark lines.

But note that unlike with fellow tech titans Microsoft, Nvidia and GOOGL stock, the 50-day line has remained above the longer-term 200-day moving average. That’s a sign of technical strength in this market correction.

Take a moment to review the RS lines and signs of support and resistance as you go through the stocks featured on the latest list of new buys by the best mutual funds. Be sure to also check the stock ratings for both fundamental and technical metrics as you search for ideas for your watchlist.

Follow-through days and new uptrends tend to occur while the news is still bad. And the most promising stocks tend to take off right when the stock market indexes shift from “market in correction” to “confirmed uptrend” as shown in The Big Picture and Market Pulse.

So stay protected with sound sell rules during the market correction and get ready to profit when the market rebounds.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.

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