The communications services sector (XLC) is breaking higher, after 10 days of consolidating its recent gains. Stocks in the group were active on Monday despite the financial media’s dire drumbeat. This morning they are at it again, whipping up concern over everything they think we should be afraid of while ignoring price action. We noted yesterday, institutions were buying the lows, as TICK cumulative kept rising during the evening session.
My two cents? Turn the news off.
Communications Services Sector
When institutions start selling it will be obvious. Until then, relative strength is obvious. Price action is rising, with the 21/50d moving averages bullish and supportive.
Netflix (NFLX), Alphabet/Google (GOOGL), and Facebook (FB) closed in the upper half of their respective daily ranges. We’ll look for more upside today and sell some into strength on any signs of profit-taking. Day trades are still in effect, as we navigate geopolitical tensions.
| SYMBOL | NAME | SECTOR | CHG | % CHG | VOLUME |
|---|---|---|---|---|---|
| ATVI | ATVI – Activision Blizzard Inc. | Communication Services | 1.07 | 1.82 | 4566287 |
| EA | EA – Electronic Arts, Inc. | Communication Services | 1.58 | 1.47 | 2933535 |
| FB | FB – Facebook, Inc. | Communication Services | 3.93 | 1.88 | 16303699 |
| GOOG | GOOG – Alphabet Inc. – Class C | Communication Services | 33.55 | 2.47 | 1597188 |
| GOOGL | GOOGL – Alphabet Inc. | Communication Services | 36.29 | 2.67 | 2260651 |
| NFLX | NFLX – Netflix, Inc. | Communication Services | 9.93 | 3.05 | 5658980 |
| VIAC | VIAC – ViacomCBS Inc | Communication Services | 0.61 | 1.47 | 5699121 |
The computer gaming/software stocks were very active Monday as well. Look for this group to remain active today as Take-Two (TTWO) and Activision (ATVI) closed near the highs of the day.
Sector Strength
Healthcare stocks found buyers on the pullback at the 21d. Cyclical stocks in the financials (XLF) and industrials (XLI) sectors also bounced, while the materials sector (XLB) experienced more profit-taking. We’ll steer clear of the latter for the time being.
S&P futures are higher. Nasdaq futures outperformed on Monday, thanks to the big cap “FAANNG “stocks. Look for that performance to continue. Gold is higher, while bond yields and crude are flat.
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Happy Trading,
Vinny
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