Momentum Monday – The Large Cap Technology Stocks Woke Up Led By Amazon
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Welcome back to Momentum Monday!
In today’s episode of Momentum Monday, Ivanhoff and I discuss the following:
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Market Overview: All-Time Highs and Trends
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Mega Caps Bounce Back
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Nvidia and the AI Market
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Crypto and Semiconductor Stocks Shine
Reminder: Riley on my team created the ‘Trends With No Friends’ email which is my go to list every day to track what is working and what is not. You can get it for free here.
In This Episode, We Cover:
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Market Overview: All-Time Highs and Trends (0:00)
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Mega Caps Bounce Back (1:00)
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Nvidia and the AI Market (4:00)
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Crypto and Semiconductor Stocks Shine (7:00)
Here are Ivanhoff’s thoughts:
We have been talking about crypto being the undisputed leader since the election results. Another trend until recently was the underperformance of mega-cap tech companies. This changed last week. META, AMZN, and AAPL erupted to new all-time highs. TSLA and MSFT are almost there. GOOGL and NVDA are still lagging but at least they stopped pulling back.
Interestingly, this pullback coincided with a decline in interest rates. Small caps were supposed to outperform in such an environment. We saw a rotation back into Big Tech instead.
Anything related to crypto remains in play – COIN, MSTR, HOOD, MARA, BITX, etc. It shouldn’t be otherwise with BTC reaching 100k for the first time in its history. Will this historic round number lead to a rug pull that will shake many out or the underlying demand will keep any dips tepid? No one knows. The latter is more likely as of now but the situation could change quickly. Imagine this – Bitcoin was 0.10 in 2010. That same year, a developer spent 10,000 BTC (then worth $40) to buy two Papa Jones pizzas. The opportunity cost of this transaction is $1Billion as of today. I wonder how many Bitcoin the guy had at the time?
Some say that MSTR has peaked and it’s now on the way down because it is underperforming Bitcoin. I say, not so fast. It is still trading above its rising 20 and 50dma and until this is the case and Bitcoin remains north of 100k, the dips are likely to get bought. Crypto miners like IREN and MARA are setting up for a potential breakout. While it is true that each halving makes mining less lucrative, the increase in the underlying crypto price can more than make up for it. Besides, what matters in the short-term is sentiment. There’s no hotter industry than crypto right now which means the outcome can be both wild and unpredictable.
In the meantime, other high-momentum stocks continue to rise – RDDT, PLTR, APP are just a few examples of the fact that in a bull market, stocks can go to levels no one can imagine.
The semiconductor sector has been showing relative weakness in the past few months. NVDA has stalled for now which is impacting the entire space. There are exceptions. CRDO and MRVL gapped up after much better-than-expected earnings. AVGO is also setting up for another push higher.
And here are the charts discussed:
PS – Here is the latest ‘Trends With No Friends’ which covers ‘new highs and new lows’ and measures the followers (friends) on Stocktwits versus the prices. Subscribe here.
