Trader: Stick With These 6 Stocks With Relative Strength

Gary Kaltbaum was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. Tune in to the daily broadcast live Monday-Friday at 8 a.m. ET here.

• Stocks like Google Inc GOOG and Under Armour Inc UA have advanced 8 and 23 percent since August 25..
• Kaltbaum Capital Management President Gary Kaltbaum said that in this market, he prefers growth-stock names that have "recovered the best" from the late-August sell off.
• Kaltbaum said he favors relative strength, but conceded that if the market take a hit, these names will also move lower.

Gary Kaltbaum said he is looking to relative strength at the moment for the right places to invest. And that means names like Google, Under Armour, AutoZone, Inc. AZO, O'Reilly Automotive Inc ORLY, and Nike Inc NKE that have recovered well since the August 24 flash crash.

Since then, Under Armour has gained 23 percent, Nike is higher by 11 percent and AutoZone, Google, and O'Reilly Automotive have gained 8 to 9.5 percent – all of which outpaces the 5.4 percent gain in the S&P 500. Kaltbaum said that traders could even add in Skechers USA Inc SKX, which is up 10.5 percent during the same time period.

Kaltbaum noted that these names got hit "very hard" when the market slumped, but have "recovered the best." They are in "bullish mode," he argued.

Comparatively, the same could not be said of many other sectors or names, according to Kaltbaum. Everywhere else he looks is in "a little bit of recovery mode."

Kaltbaum said that Thursday's FOMC decision will dictate where the market turns from here. If it goes lower, he said that these same names that are performing well will likely get hit again.