Over the past few weeks, we’ve fielded many questions referencing a stock market correction. The most common question was, “with the Nasdaq extended from nearly (+10%) above its 50d moving average and the top ten components stocks comprising 50% of its weight, is the market poised for a correction?” Hattip to Russell in the trading room.
Summary
We need to watch these stocks closely in the weeks leading into the election for sure, so creating a grid of these top performers for review every day is advisable. We excluded Adobe so that the grid would fit.
Top Nasdaq Weighed Stocks
With the exception of maybe AAPL, NVDA and TSLA, all ten stocks have consolidated recently setting up a better structural basis for going a bit higher into the end of the year. Look for any weakness in these leading stocks going forward.
Nasdaq Equal Weight Index
As a final check, we keep an eye on the Nasdaq Equal Weight Index where no stock is more important than any other. A quick check of many of these stocks in MarketSmith shows great earnings and sales. The 20-25% show above-average EPS growth and great IBD metrics.
In summary, if you’re getting a little edgy with these high valuations, just remember these Top 10. We’ll keep an eye on them for you, so join us today in the trading room for our LIVESTREAM broadcast during market hours, as we navigate the current environment. Watch, listen, and trade from 9:20 AM to 4:15 PM Monday through Friday.
If we have any issues with internet service we’ll do a remote session like yesterday. Just check the alerts channel if LIVESTREAM is down.
Happy Trading,
Vinny
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*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.
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