logo

These are the best places to hide out as uncertainty rises, traders say

VIDEO4:2404:24
These are the best places to hide out as uncertainty rises

Escalating tensions in the Middle East kept Wall Street on the back foot Monday.

But, as uncertainty rises, one trader sees a chance to pick up some deals.

"It's very important to be opportunistic when volatility picks up. Don't panic, stick to your game plan and look for those stocks that you've always wanted to get," Bill Baruch, president of Blue Line Capital, said Friday on CNBC's "Trading Nation."

Baruch said that software and cloud companies are a good place to seek shelter.

For example, "Salesforce is something that looks like it's breaking out," said Baruch. "The 50-day crossed out above the 200- for the golden cross mid-December, and now it's up just below $170 and it's about to set a record high. It could make its way to the upper end of that channel, near $200 on a breakout." Salesforce on Monday hit a record of $171.69 before giving up some of those gains. The stock was up 2.2% to $169.90 in midday trading.

"Another one if you're looking for a pullback, Oracle is a very interesting chart. Now, I don't like the fact that it's below the 50- and 200-day moving averages … but there is a bit of an inflection point that it broke out above and it's holding that right now."

Chad Morganlander, portfolio manager at Washington Crossing Advisors, is getting more defensive this year on the expectation of weaker growth.

"We think that the market is fully valued," Morganlander said during the same segment. "Our long-term expectations are roughly about 5% total return on the S&P 500. Our recommendation, though, is to be overweight health-care companies, staples as well as industrials, believe it or not. We see that there's a seam of opportunity there."

He added that markets could see further weakness as 2020 marches on.

"For 2020, [investors] have lofty expectations for S&P earnings and revenue growth. So yes, you can get a pullback. On those pullbacks though, we would be adding to these real solid positions. Companies that are consistently grown, consistently profitable and don't have a lot of debt on their balance sheet. That's the critical thing here is to buy value or quality companies in 2020," said Morganlander.

Disclaimer