Riding the Wave: Short-Term Strategies in a Tech-Led Market
Riding the Wave: Short-Term Strategies in a Tech-Led Market
January 21st, Update
The S&P 500 is currently on an upward trend, reaching all-time highs.
In contrast, the NASDAQ hasn’t reached its all-time high but is still performing better than the S&P 500.
The Equal-weight S&P 500 is moving sideways. It's trying to break out but is still not doing as well as the S&P 500.
This suggests that the market rise is largely driven by a few large companies, especially in the Technology sector.
This is mainly due to the artificial intelligence (AI) mega-trend. This trend supports investments in companies like Nvidia, Microsoft, Google, Broadcom, etc.
Interest rates have likely peaked, and financial conditions should become more favorable in 2024. This could mean continued growth for the tech sector.
For the broader market to rise, we need ongoing signs of avoiding a recession. Currently, this seems to be the case, although some experts warn of an upcoming recession.
Regarding the 10-year treasury yield, it didn’t move favorably last week. However, I expect it to stabilize around 4% and gradually decrease in the next few months, if inflation remains low.
Therefore, it’s time to invest cautiously. Focusing on thriving sectors could lead to successful investments.
Here's a table of the top-performing sectors right now.
Excluding sectors that had a negative performance last month, the ones to watch are Semiconductors, Technology, Software, Internet, and Growth within the Tech space. Additionally, Communication Services, Financial, Medical Devices, Home Construction, and Alternative Harvest (Marijuana stocks) are promising.
These are the key sectors to consider at the moment.
BOOKS / RESOURCES
A friend of mine who read the newsletter asked me for advice when it comes to technical analysis.
Here I go:
Secrets For Profiting in Bull and Bear Markets by Stan Weinstein
How I Made $2,000,000 In The Stock Market by Nicolas Darvas
How to Make Money in Stocks by William O'Neil
These are the ones I have found more useful.
YouTube channels:
CiovaccoCapital (link)
for a weekly overview of the markets (technical analysis)
Richard Moglen (link)
Great interviews with great traders, can give you a sense of trading strategies.
Financial Wisdom (link)
Plenty of good books and strategies that are very well explained.
MOMENTUM PORTFOLIOS
10X LARGE CAP MOMENTUM PORTFOLIO
My SMCI 0.00%↑ order was triggered perfectly before the stock popped up on better-than-expected earnings and sales. At the same time, my Stop Loss on PDD 0.00%↑ was triggered for a 28% gain. Here is what the Portfolio looks like today:
I am up 41% on my combined SMCI 0.00%↑ position and the overall ROI is now at 16%, almost in line with the SP500 performance.
I have 5258 USD in the account and here is what I am doing:
Creating a BUY STOP order for 38 shares of Block SQ 0.00%↑ at 66.5 USD - if triggered, initial Stop Loss at 59.7 USD
Creating a BUY STOP order for 66 shares of DraftKings DKNG 0.00%↑ at 37.9 USD - if triggered, initial Stop Loss at 34.5 USD
10X SMALL CAP MOMENTUM PORTFOLIO
I was stopped out from ESPR 0.00%↑ for a 9% loss. On the other hand, my ACMR 0.00%↑ buy-stop order was triggered, and below is what the Portfolio looks like today:
Here I have 11k USD in cash and next week I’ll be:
Creating a BUY STOP order for 21 shares of Axcelis Technologies, Inc. ACLS 0.00%↑at 133 USD - if triggered, initial Stop Loss at 119 USD
Creating a BUY STOP order for 19 shares of Nova Ltd. NVMI 0.00%↑at 144.5 USD - if triggered, initial Stop Loss at 129.7 USD
Creating a BUY STOP order for 84 shares of Xometry, Inc. XMTR 0.00%↑ at 33.5 USD - if triggered, initial Stop Loss at 29.5 USD
Please leave your questions in the comment section below.
have a great week ahead!
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Important: This is not investment advice. Consult a licensed financial advisor before making any investment decision.