Stock Trends

Apple says hold my beer

Good morning,

The battle for tech stock #2 continues.

In our inaugural edition of The Trade Report, we discussed the potential volatility within XLK (the SPDR Information Technology ETF) if Nvidia overtook Apple as the second-largest tech stock in the S&P 500.

And sure enough, that happened, with Nvidia eclipsing Apple’s market cap last Wednesday, ahead of this Friday’s quarterly rebalance.

But Apple said, “Hold my beer”.

Apple has exploded with a 10% gain the past 2 days and is not only back above Nvidia but is neck and neck with Microsoft for the world’s most valuable company.

And the XLK rebalance isn’t just a fascinating sideshow. It may be part of the story.

In this video, Piper Sandler’s Head of Options Danny Kirsch explains how options players who tried to front-run a potential fire sale of Apple from XLK, are now being forced to cover those trades, driving the stock higher.

But whatever order they are in, the top 3 stocks in the world, S&P 500, and technology sector all logged fresh 52-week highs yesterday.

Oh, and the 4th largest tech stock? Well, that’s Broadcom, which also closed at a record high yesterday and is set for a double-digit gain today following blowout earnings.

As long as that is happening, poor breadth isn’t going to matter.

This week, we’ll review:

• The battle of the top stocks

• Other 52-week highs in technology

• Concerns coming from financials

• Healthcare stocks

• and more!

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Apple says hold my beer

Apple breaks out to all-time high with best day since November 2022

Is it overbought now? Sure. Does it really matter? Nope. Apple is already halfway to its $230 measured target and as long as we’re above $198, pullbacks should be bought.

Nvidia still looks good

Nvidia may spend another quarter stuck at a lowly 5% position in XLK, but the world’s largest semiconductor stock closed yesterday at 52-week absolute and relative highs. Can’t bet against those.

Microsoft not giving up #1 without a fight

As shown below, Apple’s recent rise has put it right back there with Microsoft ahead of Friday’s rebalance. While the top 2 stocks get mostly the same weighting in XLK, Microsoft isn’t going down without a fight. The stock broke out from a 5-month slumber yesterday with a 1.9% gain. It’s still the weakest of the 3 in relative terms, but just made a higher low and is challenging the downtrend line.

Market Capitalizations: MSFT (blue), Apple (red), Nvidia (purple)

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Other 52-week highs in technology

Broadcom go bang today