Large-cap tech stocks in the Nasdaq have breached their 50-day moving average. If the movement continues downward, we could see other stocks in the market cool off as well.
When the market pulls back, weak stocks are the first to fall and make the biggest moves. I’ve identified three weak stocks to take advantage of this market cycle — and more in today’s stock market recap.
But first…
Stock Market Recap
In today’s stock market recap, global markets are mixed with Wall Street opening lower in premarket trading.
It could be that liquidity and big orders are coming in from institutional investors that are having a late start to the holiday-shortened trading week. Take today’s opening into account, but don’t make any big plays solely on premarket trading.
This morning’s jobless claims broke 400,000 for a new pandemic low. Jobless claims came in at 385,000 compared to last week’s 406,000. This data will be an even better figure if we see a significant increase in jobs created in Friday’s employment report.
The Invesco QQQ Trust Series 1 (Nasdaq: QQQ), which tracks the Nasdaq, has 77% of its stocks trading above the 50-day moving average, and that figure could drop down to around 60%. I want to see two full sessions of trading above the 50-day MA in the QQQ before I consider bullish trades in large-cap tech stocks again.
The S&P 500 remains bullish, with 90% of its stocks trading above the 200-day MA. I expect the S&P 500 could get choppy because of overstretched levels and the recent bullish run.
Roger’s Radar: 3 Strong Plays for the Current Weak Cycle
U.S. Ecology Inc. (Nasdaq: ECOL) provides specialty waste management services to commercial and governmental customers throughout the U.S.
ECOL has a one-year return of only 12.04%, meaning it hasn’t rebounded from the pandemic lows as well as other stocks in the Nasdaq. Dividends are a strong sign of growth and ECOL is losing ground there with a five-year dividend shrinkage, down 75%. Earnings per share versus previous quarter is down 158.33%. ECOL is currently trading around $38 and it could drop to $32.
Another bearish opportunity is on a computer programming and IT services company with a one-year return of -7.13%. The third short play is on a financial services company in the healthcare industry. This stock looks like it’s peaked technically, and it could break down further.
In today’s video, I’ll go over why the market is volatile pre-open today… why Federal Reserve data is slightly counterintuitive… how to determine if the QQQ is prime for buying or selling… and three stocks to sell right now.
P.S. If people stick to trading bonds, safe ETFs and other mind-numbingly boring trades…
They could see tiny 5% to7% gains on their portfolio at the end of the year.
But that’s barely enough to beat inflation!
This leaves traders with only one realistic option with the potential for major profits…
To capitalize on today’s unprecedented market shift — which has been minting Gamestop and AMC millionaires left and right!
This phenomenon has already pulled in triple-digit returns, and riding these capital floods could lead to even bigger gains…
