Good morning,
Leadership and relative strength aren’t just key to positioning portfolios, they’re an important part of the macro call around here.
That’s why I’m paying so much attention to the recent defensive strength (and tech weakness), even while breadth has been firming up in October.
As promised, today, we’re looking at all the stocks in the S&B 20 Index.
Remember, the S&B 20 stocks are not stocks I’m endorsing from the long side. Rather, think of it as my personal Dow Jones Industrial Average. It has the largest, most important stocks, but I created it to be diverse in its representation and provide important information on market leadership. You can read each stock’s specific reason for inclusion in the introductory report, but the stocks are divided into three baskets:
The Top Tech 8
Cyclicals
Defensives
At the end, we’ll look at a few extra charts and provide some final thoughts.
Top Tech 8
AAPL: Apple
Apple sits just a hair below all-time highs and is riding a relative uptrend after leading the tech charge in September AND holding up very well recently. It closed right on the breakout level yesterday, and if we’re above $330, the expectation should be new highs incoming.
AMZN: Amazon
Amazon has broken out from a bullish descending wedge pattern and hit a one-month high on Tuesday. If it’s above the 200-DMA ($243), I like the risk-reward with an eye toward the August all-time highs.
AVGO: Broadcom
Nothing good to say about Broadcom. The stock is at 52-week relative lows, its 200-DMA has turned into resistance, and the small pattern I called out last week resolved lower. Risk to the YTD lows just below $300.
GOOGL: Alphabet
