By Ryan Gorman, CFA, CMT, BFA
1/ The King as Far as Weighting is Concerned, MSFT
2/ The Long-Term Leader, AAPL
3/ The New Kid on the Block, NVDA
4/ Not a Leader, but Certainly Interesting, BA
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1/
The King as Far as Weighting is Concerned, MSFT
I am interested in the top stocks by index weighting for a few reasons. The first is, they have been the clear leaders for some time. As such, their strength had a large bearing on how the indexes perform.
According to Morningstar’s report on SPY’s portfolio, the biggest weight goes to Microsoft. This giant makes up 7.41% of the index.
Courtesy of StockCharts.com
This chart strikes the closest resemblance to our weekly S&P chart of yesterday. A clear strong uptrend. Momentum as measured by RSI is diverging. The elder bars are green year the start to the week was a slow one.
There is a decent distance to the 30-week moving average. On the one hand, a correction in this stock would weigh on the index. Further, with so much money in ETF’s, a lot of selling of the ETF could weigh on the stock.
2/
The Long-Term Leader, AAPL
Apple is a long-time leader and maintains a spot as one of the largest companies in the world. This stock was largely dormant for most of the year, until the recent developers conference kicked it into gear.
Courtesy of StockCharts.com
Here again, there is a large distance to the now rising 30 week moving average. The MACD is far from stalling and the elder bars are green. It has moved a great distance in a short time but looks good overall. The previous range was from about $165 to $195. It remained in that range for almost a year. One trading tip is to take that range and add it to the breakout point to reach a first target. $30 is the price range, added to $195 and $225 would be the target. It has hit this, perhaps it triggers a rest for now.
3/
The New Kid on the Block, NVDA
NVDA is the new kid on the block. Blasting to massive highs and joining the $3 trillion market cap club. The stock is up 154% this year and contributes around half the index’s returns.
We can see a pullback has begun, of the major leaders it is the furthest away from its all-time high. Near term, the price has gone up again this week, but the elder bar is blue. This is a sign of indecision.
Courtesy of StockCharts.com
The 30-week moving average is under $100, which was the last major breakout point as well as a round number. It is possible this area is tested again, though the moving average would still be sloping up and indicating the uptrend was intact.
4/
Not a Leader, but Certainly Interesting, BA
Boeing has not, indeed, been a winner. In fact, it has hardly gone anywhere in 3 years!
I wanted to include it as an interesting bonus chart however, because the news is constantly bad. Yet, since April, the stock has been trending higher, putting in higher lows. In fact, just yesterday, they pleaded guilty to 2 felony’s and though it was well off the high of the day, it was positive. Also, the elder bar is green, though the price has not really moved up. This has the potential to be bullish foreshadowing. Could be too aggressive below a declining 30 week moving average, but it seems the tides may be turning for this name!
Courtesy of StockCharts.com
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Originally posted 9th July 2024
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I can’t understand why Taiwan Semiconductor has not climbed to the top in value since it has a virtual monopoly. Everybody in the world uses their chips. They have incredible financial fundamentals & they are drowning in money. It’s a phenomenal business.
I don’t understand why anybody would want to invest in BA. I’m regularly reading about another one of their disasters. They don’t have acceptable fundamentals. I think their management is incompetent. It’s almost like they are being sabotaged.