The rotation away from large cap stocks in July and the growth scare of early August have proved to be short-lived, and the previous market leaders still have room to run, according to Oppenheimer. Ari Wald, a technical analyst at the firm, said in a note to clients that the large-cap growth stocks which had all the market momentum earlier this year still appear to be in good shape. “In July, we argued signs of a momentum unwind were largely exaggerated. We’re encouraged the factor has since ticked higher on a market-neutral basis following the early-August VIX surge. Overall, we believe 1) the rate breakdown supports large-cap growth, 2) Fed policy supports the momentum factor, and 3) we’re seeing evidence of both large-cap growth and high-momentum inflecting positively again,” the note said. The exact group of Big Tech stocks leading the way has changed a bit during this bull market, as some of the stocks in the so-called “Magnificent 7” have struggled to keep pace. However, a broader way to look at large cap growth is the Nasdaq 100, tracked by the Invesco QQQ Trust . And the QQQ is still above its 200-day moving average — a key technical indicator watched by Wall Street pros. “The tech-heavy index is also inflecting positively from the bullish slope of its 200-day average on both an absolute and a relative basis. We see this as a resumption of the ETF’s uptrend and its structural trend of leadership,” the Oppenheimer note said. Beyond the technical details, the Nasdaq 100’s rebound is now turning into a serious winning streak. The index has risen for seven straight sessions and it’s coming off its best week of the year with a gain of 5.38%. The top holdings in the QQQ are Apple , Microsoft and Nvidia , which combined make up about 25% of the fund, according to FactSet.
https://image.cnbcfm.com/api/v1/image/108016382-1722880800528-gettyimages-2164969993-GLOBAL_MARKETS_SELLOFF.jpeg?v=1722880847&w=1920&h=1080
Source link
