2 Stocks That Could Create a Trading Opportunity Soon

Yesterday’s Daily mused about what will untie the Gordian Knot holding back the market from either crashing or rallying.

While we wait, it feels like a great time to plan for future trades.

I have been all over the “Vanity” trade, based on the assumption the diet drugs lead to bringing in a new wave of consumers.

Let’s focus today on 2 stocks I am watching very carefully.

1. Nu Skin-(NUS)

Some stats:

Nu Skin Enterprises offers a range of popular products across skincare, wellness, and beauty.

1. Company Overview:

1. • Nu Skin Enterprises is an American multilevel marketing company.
   • It develops and sells personal care products and dietary and nutritional supplements.
   • The company operates under the Nu Skin and Pharmanex brands.
   • Its products are sold in 54 markets worldwide through approximately 1.2 million independent distributors.
   • Nu Skin aimed to create skincare and nutritional products without unnecessary fillers, following the philosophy of “all of the good, none of the bad” in their formulations.

2. Global Presence:

1. • Nu Skin operates in nearly 50 countries across Asia, the Americas, Europe, Africa, and the Pacific

2. COTY

• Founding and Overview:
  • Coty (NYSE:COTY) Inc. is an American multinational beauty company founded in 1904 by François Coty.
  • It develops, manufactures, markets, and distributes fragrances, cosmetics, skin care, nail care, and professional and retail hair care products.
  • Coty owns around 40 brands as of 2024.
• Revenue and Divisions:
  • Coty is one of the world’s largest beauty companies.
  • It generated $5.3 billion in revenue for the fiscal year 2022.
  • The company operates three divisions:
    1. Consumer Beauty: Focuses on body care, color cosmetics, fragrances, and hair coloring/styling products.
    2. Luxury: Offers luxury cosmetics, fragrances, and skin care products.
    3. Professional Beauty: Services beauty salon and nail salon professionals.

3. Brands:
   • Coty owns approximately 40 brands, including Bourjois, Calvin Klein, Gucci, Hugo Boss, and Kylie Cosmetics (51% ownership).

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Kylie Jenner and Kim Kardashian are part of Coty’s acquisitions to help Coty “celebrate and liberate the diversity of beauty.”

Now, we look at the charts.

NUS is in a Recovery Phase above the 50-DMA.

The stock is on par in Triple Play or Leadership against the benchmark.

Real Motion shows a mean reversion sell signal but in a bullish momentum divergence.

COTY is in a bearish phase.

It is well underperforming the benchmark.

The stock looks like it is having a mean reversion to the buy side.

Most compelling potential key reversal happening with any gap higher leaving a potential island bottom.

Both these stocks look promising, but like I wrote at the top, the market will have a lot to say about how we approach these investments and when.

ETF Summary

• S&P 500 (SPY) Apple helped this index stay near ATHs
• Russell 2000 (IWM) 200 broke briefly, so now that is a big pivotal point to hold
• Dow (DIA) 40k resistance
• Nasdaq (QQQ) Apple (NASDAQ:AAPL) helped this too stay near all time highs
• Regional banks (KRE) Watching the range 45-50 CAREFULLY
• Semiconductors (SMH) NVDA red so this slightly red
• Transportation (IYT) 63.80 area now important support with 66-67 the area to clear for health
• Biotechnology (IBB) 135 support 140 resistance-big eyes here this week
• Retail (XRT) 75-80 trading range to break
• iShares iBoxx Hi Yd Cor Bond ETF (HYG) Ended the week on critical support 76.85 area-so watch carefully this coming week

Written By: Michele Schneider