There seem to be few places to hide in this sell-off.
The broad stock market fell sharply on Thursday as worries around the spread of the coronavirus continued to mount, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite entering correction territory, which is measured by a 10% or more decline from 52-week highs. The Dow dropped over 1,100 points, its biggest one-day point drop in history.
With investors potentially looking for corners of the market where they can wait out the pain, Todd Gordon of Ascent Wealth Partners and John Petrides of Tocqueville Asset Management offered up their best hideout plays on CNBC's "Trading Nation."
"I think a lot of people, coronavirus or not, are sitting at home watching Netflix," Gordon, who is a managing director at his firm, said on Thursday. "[It's] amazing: In a down tape today, Netflix was actually strong and we're actually working towards new highs."
Gordon pointed to the stock chart's "really strong technical picture," saying Netflix was "acting well" and appeared to be heading for a breakout around the $400 level, not far from its 2018 all-time high of $418.97.
"We're above a 200-week rising moving average we haven't been able to even come back and test," he said. "We're coming back. We're trying to break up through 400."
Netflix shares ended trading at $371.71 on Thursday, down about 2%. The stock is still up nearly 15% year to date.
Gordon's other hideout play was the stock of pharmaceutical giant Merck, which hasn't had as easy a run in 2020. Shares are down over 14% year to date and fell more than 2% in Thursday's session.
"I do like the dividend plays. I think interest rates are low and they're going to stay low," Gordon said. "Merck will get you done at an about 2, 2.5% yield."
Still, with the stock declining, Gordon suggested building a position by layering as it fell, with the 200-week moving average at $68.53 serving as a possible floor of support.
"If you're looking to get some exposure, health care has shown good relative strength for obvious reasons and Merck, technically speaking, is best in breed right now," Gordon said.
Merck closed at $78.08 on Thursday.
John Petrides, who is a portfolio manager in Tocqueville's wealth management branch, also recommended hiding out in high-dividend plays.
"High-dividend plays is really a no-brainer here," Petrides said in the same Thursday interview, citing their low volatility profiles, solid earnings reports, healthy cash flows and strong incomes relative to the bond market with the U.S. 10-year Treasury yield near an all-time low.
"We like a company like Verizon where you're getting a 4.3% dividend yield, and, listen, if we're all quarantined in our house or in our apartments because of coronavirus, guess what we're going to be using? A lot of data," Petrides said. "That's going to fall back into a company like Verizon [that is] going to be able to hold serve in a time when most companies are going to be bringing their earnings down. So, we like Verizon in this environment."
"Wells Fargo's [a] name that, relative to other financials, has gotten beaten up," he said. "It was the gold standard for so long. Over the last three years, it's been put in a penalty box ... literally and figuratively by the Federal Reserve."
But with a new management team at the helm, Wells Fargo could soon come back into investors' good grades, Petrides said.
"[The] dividend yield is 4.5%. We think [the] valuation is really compelling relative to other large-cap peers and ... assuming the Fed gets them out of the penalty box pretty soon, we think investors will bid up the stock from a [perspective of] multiple expansion," he said.
Verizon and Wells Fargo both closed down nearly 4% on Thursday.
Disclosure: Petrides and certain Tocqueville clients own shares of Verizon.