Stocks: The Good, The Bad and The Ugly
Technicals for the big 7, more high-flyers and checking back in on REITs
Markets rallied hard coming into CPI, potentially making the bar higher for stocks post-report. However, investors saw what they wanted to see and the S&P 500 rallied an additional 0.7% yesterday, hitting another 52-week high in the process.
The most important story continues to be a widening out in breadth, as participation has extended out to laggards including energy, real estate, and small-caps.
That’s great to see from a top-down perspective, but the top stocks still drive the index. For that reason, today’s report will check in on the Big 7 growth stocks to see what the rotation could mean for them.
We’ll also review:
High-flying stocks breaking out
REITs featured in last month’s Deep Dive
Technicals for the Big 7
Monday was an interesting day for the markets, as six of the 7 largest growth stocks declined on the day, but the S&P 500 finished slightly higher, small-caps gained more than 1.6% and advancers outnumbered decliners by better than 2:1 on the NYSE. Part of this was due to the announcement of a special rebalance for the Nasdaq 100 Index, but at a combined 28% of the index, it never hurts to check in on how they look.
If AAPL is above $183 the big-picture breakout is intact. More tactically, the stock is clinging to its sharp uptrend line that stretches back to March 1. A break wouldn’t be a sell signal but could signal the beginning of a pause.
Microsoft has pulled back at all-time high resistance, but yesterday’s acceleration off the 50-DMA should give it a chance to retest those highs. Stay long with this pick from the Concentrated Equity Buy List.
GOOGL & GOOG: Alphabet
Alphabet remains one of the weaker of the Big 7, losing its relative breakout point and trying to regain momentum after a short-term head and shoulders top completed. Still a risk to $108 and not an attractive long until it gets there or reclaims $125.
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