Stocks: The Good, The Bad and The Ugly

Technicals for the big 7, more high-flyers and checking back in on REITs

Good morning,

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

• and more

---

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.

AAPL: Apple

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.

MSFT: Microsoft

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.

AMZN: Amazon