“A global infrastructure for the information society, enabling advanced services by interconnecting (physical and virtual) things based on existing and evolving interoperable information and communication technologies” and for these purposes a “thing” is “an object of the physical world (physical things) or the information world (virtual things), which is capable of being identified and integrated into communication networks”.
Last week, FDN “the Dow Jones Internet ETF” produced a 4th week of gains, with the “FANG” stocks leading the charge. Technology is outperforming all sectors.
An analysis of the Top 10 holdings in this ETF is below – courtesy MorningStar. Considering AMZN is number one by percent weight, it’s interesting to note BABA doesn’t make the cut. More on BABA later, as we note EBAY is on the list.
Below is EBAY’s current chart. Note the PE ratio above is pretty low, indicating investors are less interested in trading EBAY versus AMZN. Put another way, the company reported a beat of 7.5% in April and the stock moved lower. Presently we see RSI rising, as price recovers post-EPS. If EBAY emerges above VBP resistance 34.50 is the short term target.
BABA by contrast, isn’t even on the FDN list of “Internet” related stocks. I find that remarkable, considering Alibaba’s dominance in China and the chart performance. Investors Business Daily does rank BABA #1 ahead of AMZN and rightly so, as IBD ranks by performance not weighting.
BABA appeared on the IBD50 List February 04. Since then, the stock completed a handle and broke out a month later, gaining 14.75% by the close on Tuesday. SOTEMA or the “slope of the ema’s” continues to support price action. STO MACD and RSI muscle suggest higher prices.
That said, BABA reports Thursday, a week from tomorrow. With prices rising, it makes sense to take some profits off the table if you managed to hold on during this bullish run.
“The internet of things” continues to propel technology related stocks higher, so we will continue to focus on Nasdaq’s potential for additional gains going into the summer months.
If you traded NVDA into earnings (really more of a gamble) congratulations. There is literally no competition in AI chips at the present time; so it is our view that this company will continue to kick “buttocks” into the foreseeable future.
Happy Wednesday – Vinny