Despite an unexpected banking crisis that had reverberations across markets and the broader global economy, equities ended the first quarter of the year on a positive note last Friday. But the first week of trading of the second quarter got off to a rocky start, forcing us to recalibrate our approach to the market. For starters, the S & P 500 Short Range Oscillator flipped to overbought territory for the start of the quarter, giving us an opportunity to scale back some of our positions and raise cash. But as the week progressed, stocks came under pressure amid signs the labor market is softening, fueling fresh investor fears of a recession. That prompted many investors to dump technology stocks in favor of defensive sectors like health care and consumer staples. Consistent with our discipline, we followed through on what Jim Cramer outlined on Sunday and used this week’s volatility to opportunistically sell, along with a couple of buys. This week of trading comes on the heels of a buying spree in the second half of March, when the market was oversold and uncertainty over the financial sector dominated. Here’s a wrap-up that explains how our broader view of the market influenced our trading decisions this week: Monday Guided by the Oscillator, we decided to trim shares of our networking holding at the start of the week. We sold 160 shares of Cisco Systems (CSCO) into strength Monday, with the stock having rallied roughly 10% since the company’s fiscal second-quarter report in February. In that quarter, Cisco delivered a beat on revenue and profit, while raising its guidance. However, investors like us are still questioning whether Cisco’s orders can continue to grow on par with 2022. Earlier this year, we started to get concerned over Cisco’s order-growth prospects amid a slowdown in IT spending. As a result, we remain cautious on Cisco until we get a better idea of growth expectations for next year. Tuesday Tuesday was our busiest day of trades . We had a mix of selling and opportunistic buying across our energy, consumer staples, infrastructure and health-care holdings. We decided to exit our position in Devon Energy (DVN), selling 500 shares of the energy company after an unexpected production cut from OPEC+ boosted oil stocks. We had been planning to part with Devon since it delivered a disappointing fourth quarter , leading to a lower fixed-plus-variable dividend. This trade also gave us a chance to scale back our weighting in the oil-and-gas sector. But we’re continuing to hold Coterra Energy (CTRA), which has exposure to natural gas. We have a stake in Halliburton (HAL) for its strong pricing power and expect it to benefit from years of underinvestment in the industry. Pioneer Natural Resources (PXD) is another one of our energy names we hold for its solid capital efficiency and a 10.5% dividend yield. We plan to stick with these three oil stocks, given energy prices are likely to move even higher amid ongoing geopolitical turmoil. We…
Read More: Here are the 6 stocks we traded at the start of the second quarter