The weekend announcement that certain electronic items from China would be exempt from tariffs helped get the Nasdaq 100 and other technology sectors off to a good start, but the looming dark cloud of earnings season and the economy requires that you stay cautious in picking the stocks that you add to your portfolio.

This week’s Five Stocks takes a look at several “Best in Breed” names in key industries to help you weather what is likely to be a rough summer.

Technology Stock of the Week: IBM (IBM)

The list of technology stocks that will survive the trade war is getting smaller, meaning that investors will have to focus on just a few “winners” in the industry for the next 3-6 months. IBM is one of those stocks.

Like Palantir, IBM is considered an AI services company. This means that the company doesn’t have to produce a lot of hardware or exports that help to avoid large impact of the current trade war. Instead, these companies are operating as service industries that often avoid tariffs.

Shares of IBM are trading 10% higher since the beginning of the year compared to the Nasdaq 100 returns of -10%.

IBM stock just saw a successful test of its 200-day moving average. That trendline is in bullish trend, suggesting that the stock will see higher prices over the next 4-6 months.

Growth Stock of the Week: Costco (COST)

I visited my local Costco location this weekend and I’m happy to report that the company is making money hand over fist.

Shares of Costco got a rare upgrade to their price target from Wall Street last week.

Last quarter, the company reported better-than-expected earnings results and maintained its positive outlook as consumers continue to increase spending at the warehouse retail outlets.

In Early 2024, Costco’s (COST) price temporarily weakened as questions on how resilient the consumer would remain through 2024 -and- the odds of a recession taking hold of the economy were on the rise. Those fears have declined as interest rates and inflation are on the decline.

Consumers have been losing their confidence in the economy but continued to shop at Costco as an inflation “hedge” heading into 2025.

Costco has been one of the better executors in the retail industry for the last two years as their bulk pricing has allowed consumers one means to fight inflation.

Costo stock is now preparing to break above $1,000 as the stock’s momentum is turning more positive.

Watch for Costco stock to cross $1,000 on its way to $1,200 in 2025.

Stock Under $10 of the Week: IAMGOLD (IAG)

I always say that you find the “trend” in gold and the “trade” in the miners. That’s exactly what we have this week as shares of IAMGOLD (IAG) are positioned to benefit from a bullish breakout in Gold’s trend.

Gold (GLD) started a new short- to intermediate-term rally on Friday as the ETF broke above its top Bollinger Band on heavy volume. This sets the “Yellow Metal” up for another 10-15% rally as the tariff tantrum continues.

IAMGOLD shares also broke above a critical level, the $5 price.

Shares of the miner closed above the psychologically significant $5 level for the first time since 2020, when gold prices were flying high on demand due to the Pandemic.

Today, the elections and the coming shift in interest rates are the bullish driver for gold prices, and thus driving miners like IAG higher.

I always stress that mining companies should be seen as a shorter-term trade that is driven by larger trending moves in gold, that stands true today.

Watch for the next 10-15% move higher in gold to drive IAMGOLD prices to $8.

Income Stock of the Week: iShares 0-3 Month Treasury Bond ETF (SGOV)

Weird times call for weird measures to protect your assets. This week’s Income Stock of the week is a little out of the ordinary, but very useful in times like these.

SGOV is the iShares 0-3 Month Treasury Bond ETF, an investment where “smart money” parks cash when the market’s a mess.

The ETF holds ultra-short-term Treasury bills, meaning it’s about as safe as you can get—backed by the U.S. government with almost no interest rate risk.

Right now, it’s yielding around 5%, which beats sitting in a savings account. I like it as a tactical move—whether you’re waiting for a better entry point in stocks or just looking to earn something while staying liquid. It’s a clean, simple way to play defense without going to cash.

The short-term maturity term of the 0–3-month treasury fund means that the ETF can maintain incredibly low volatility prices while offering income that sill likely climb as the bond market continues to run into potential liquidity problems.

Bearish Stock of the Week: American Airlines Group (AAL)

Let’s be honest, you can swing a dead cat at the market and have a 99.7% chance of hitting a stock that is set to drop 10% over the next week. Let’s be a little more humane and technical in how I provide these stocks to you.

I often talk about the $10 price as a trigger for bullish or bearish spike for a stock. Today, one of the larger airlines is toying with resistance at the $10 price, suggesting that the stock is preparing to see another large move lower.

American Airlines has been in a long-term bearish trend since breaking below its 20-month moving average in 2024. The stock has had some intermittent rallies, resulting in short-term buying opportunitie, but this is not one of them.

American Airline’s 50- and 200-day moving averages are both in bearish trends. This heavy technical burden suggests that the stock is likely to trade lower 4 out of every 5 days during a month.

Making matters worse, the stock’s 50-day moving average is crossing below its 200-day, forming a “Death Cross” pattern. The last Death Cross for UAL shares resulted in a 25% decline in the summer of 2024.

Add the Death Cross trigger to the fact that shares are slipping back below the psychological $10 price level and you have a catalyst for the price of AAL to trade to a target of $8.

— Chris Johnson

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Source: Money Morning