This week we’re trying a long idea in the IT space.
Under The Hood (09-11-2020)
From the desk of Steve Strazza @Sstrazza.
Welcome to our “Under The Hood” column for the week ended September 11, 2020.
What we do is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.
Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers… there is a lot of overlap.
The bottom line is there are a million ways to skin the cat. Relying on our entire arsenal of data makes us confident that we’re producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.
Laggards Are New Leaders: Sector Rotation
When money is coming out of one sector and going into another one, we call that sector rotation. It’s a classic characteristic of a bull market, or for that matter, a market where we are generally being rewarded for owning stocks, not for selling them.
Let’s go back to February. At that point, we were seeing laggards dragging the market lower. Things like Financials and Materials were making new relative lows and had already begun their declines. In fact, both of these sectors peaked in December, months before the overall market peaked. That’s part of why we got so bearish.
So anyone who tells you that this year’s crash “came out of nowhere”, is really just fooling themselves. This year’s stock market crash came after more warning signs than any crash in U.S. history. I’ve said it before and I’ll stand by that.
New All-Time Highs In Reliance…What’s Next?
In late July we reiterated our bullish stance on Reliance and since then prices have pushed to new all-time highs on an absolute and relative basis.
In this post, we outline what’s next for the stock.
Top/Down Take: Tata Consultancy (TCS)
The Top/Down approach to markets is at the core of what we do at All Star Charts. That means starting at the asset class level and peeling back each layer to refine our view of the smaller components that make up that asset class. With each new layer, we discover information that helps us form our weight of the evidence conclusion.
That brings us to our weekly column, The Top/Down Take, where we hope to educate readers on how we execute this process and highlight its value through the analysis of popular stocks.
Last time it was Vodafone Idea Cellular, but today the stock we’re looking at is Tata Consultancy (TCS) which made new all-time highs this week.
[Video] “What The FICC?” Episode 6
From the desk of Tom Bruni @BruniCharting
The Fixed Income, Commodity, and Currency markets are near and dear to my heart. Ever since I began learning Technical Analysis, I’ve always loved analyzing things that are “off the beaten path.” This included everything from Interest Rates to Soybeans to the Norwegian Krone. Equities are great and all, but this is the stuff that gets me up in the morning.
In addition to the blog posts we do on the site, I’ve wanted to explore new ways to share that passion with you all and show why even if you’re not investing in these markets directly, they’re worth paying attention to.
That brings us to my weekly show, “What The FICC?”
In this weekly video series, I’ll be highlighting the most important chart or theme from these three asset classes while doing my best to tie that analysis back to Equities through an intermarket signal or a trade idea.
This week’s episode is linked below, enjoy!
Taking Cues From Emerging Market Currencies
From the desk of Tom Bruni @BruniCharting
Thanks to everyone who participated in this week’s Mystery Chart.
A lot of mixed responses from this one. Some of you were buyers at support, while others were erring in the direction of the recent downtrend and looking for a resolution to the downside.
With that as our backdrop, let’s just right into it.
The Chart Doom & Gloomers Don’t Want To See
I had a great conversation yesterday with Todd Sohn of Strategas, and our very own Steve Strazza, about Sector Rotation. We talked about this rotation, in theory, and also discussed what the current environment is suggesting.
The video of that call will be up shortly on our Youtube Channel. Make sure you’re subscribed so you never miss an update! Subscribe for Free here.
The 3 of us were pretty much on the same page that we’re getting healthy rotation among sectors and this will likely lead to new all-time highs across the major US Indexes, Sectors and Market Caps. So I asked Todd, what would you tell the Doom & Gloomer out there who is watching/reading this saying to him/herself that we’re all completely full of it and the market is about to crash.
Right away he said, “Show them the Equal-weight Industrials breaking out to new highs relative to Equal-weight S&P500: [Read more…]
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