Stock Trends

Are momentum plays stalling?

Good morning,

At Monday’s close, high-momentum stocks had suffered their worst five-day run relative to low-momentum stocks since mid-December. Now, the Brown Technical Insights base case remains that this is absolutely healthy. Monday’s Playbook called out recent breakouts in lagging sectors such as healthcare, materials, real estate, and most recently, energy.

But what about the technicals for this cycle’s biggest winners? Are these pauses or something more?

This week we’ll review the technicals for high-momentum stocks as well as:

• 5 long ideas in real estate

• Refiners’ leadership within energy

• Key charts in the tech sector

• and more!

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Leadership check

Nvidia surges back on Tuesday

Nvidia roared back with a 7% gain on Tuesday and is trying to form a short-term uptrend this week. Still, as laid out on Monday, $974 is resistance until proven otherwise.

Worst day for META in nearly a year on Monday

Meta Platforms fell 4.4% on Monday, good for its worst day since March 17 of last year. The move may have been accelerated by former President Trump calling the platform “the enemy of the people” but the stock had shown little sign of weakness before the move. 52-week high as recently as Friday and found support at the 21—DMA. Stay long.

LLY bounces back after hitting first 1-month low since December

Eli Lilly has found some sellers at $800 and shows a bearish momentum divergence on its second attempt last week. The stock hit its first one-month low since December and is below its 21-DMA for the first time this year. A close below $733 sets up more potential downside.

Few industrials have been better than Ingersoll-Rand

IR is up more than 50% from its October lows but finally showing some short-term signs of exhaustion. $92.32 is tactical resistance but the stock is in a strong uptrend and (like many of these high-momentum plays) finding some support at the 21-DMA.

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5 long ideas in real estate