Stock Trends
Reviewing the stocks in the S&B 20 Index
Good morning,
We’ve been looking at defensive leadership through a variety of risk ratios and graphs, but none have been more prescient than our in-house S&B 20 Index ratios.
With the top-down view that investors should tread cautiously and not load up on new long positions, what better time to check in on the underlying components of the S&B 20 Index?
As a reminder, the S&B 20 Index isn’t a list of stocks I’m endorsing from the long side. Rather, it’s my own personal index of stocks to quickly gauge market health.
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
Both the Top Tech 8 and Cyclicals baskets peaked relative to the Defensives basket back in August, and if we’re going to get more bullish, we’re going to need to see that change.
Today, we’ll review all twenty stocks and highlight important macro themes, signs of a bottom in the ones that have faltered, and just how far the defensive leaders can run.
Top Tech 8
AAPL: Apple
I don’t have a strong view of Apple in absolute or relative terms, but it certainly hasn’t helped the major indexes since it peaked in early December. It deserves the benefit of the doubt above the top of this base and a rising 200-day, but isn’t showing the type of relative strength I look for in a stock to own.
AMZN: Amazon
Amazon just broke a 9-day losing streak, the longest since a major bottom in 2006. An oversold bounce is underway but anything that gets close to the gap and broken support at the 200-DMA is one I would sell.
AVGO: Broadcom
