This text represents an train I wish to name the “Single Inventory Portfolio”. On this state of affairs, you possibly can solely personal one inventory in your portfolio for the subsequent three months, and you’ll decide any one of many following eight shares. Which one would you choose, and why?
The great thing about this train is that it forces you to contemplate eight completely different charts, some with related traits, but some displaying dramatic variations. Ultimately, you need to determine whether or not to stay with a top-performing identify like NVDA, recent off new all-time highs in March however displaying the dreaded bearish momentum divergence, or you possibly can go for AAPL, testing worth and Fibonacci help after failing to make new all-time highs.
Let’s overview every of those charts in flip and lay out technical framework for our determination.
Nvidia Corp. (NVDA)
Nvidia is the top-ranked of the group utilizing the StockCharts Technical Score (SCTR), with its pattern scoring within the high 2% of all massive cap shares. NVDA additionally incorporates a bearish momentum divergence, with greater closing costs in March however decrease highs in momentum primarily based on the RSI indicator. This inventory presently sits round 69% above its 200-day shifting common, suggesting it may very well be fairly overextended right here.
Meta Platforms, Inc. (META)
META is that includes weakening momentum traits as effectively, with RSI dipping under 50 this week for the primary time since December 2023. Each of those shares nonetheless stay above two upward-sloping shifting averages, suggesting the long-term uptrend may be very a lot intact.
Netflix, Inc. (NFLX)
Our third chart once more demonstrates a basic bearish momentum divergence, with highs in January, February, and March all marked by decrease peaks within the RSI. This implies much less and fewer upward momentum behind these successive new highs. The relative power, nevertheless, stays fairly robust, as NFLX has persistently outperformed the S&P 500.
Amazon.com, Inc. (AMZN)
Right here, we’ve the primary chart that really made a brand new 52-week excessive to complete this shortened vacation week. AMZN has maybe essentially the most constant uptrend, with a stepwise movement of upper highs and better lows because the October 2023 low. The RSI stays robust however not extreme, indicating that additional upside potential may be very a lot a risk.
Microsoft Corp. (MSFT)
We’re now at 5 straight charts with a bearish momentum divergence. Are you able to see why I have been skeptical of additional upside for the Nasdaq 100, given these persistent indicators of weakening momentum? Regardless of the downward-sloping RSI, MSFT stays firmly trending up above an upward-sloping 50-day shifting common, which served as short-term help in January and March.
Alphabet Inc. (GOOGL)
Right here is the place we begin to see some differentiation between these main development names. Alphabet gapped greater in mid-March, and has seen further upside since that worth hole. Now we’re observing a retest of all-time highs round $154. Will this second try to breakout above the $155 really succeed? GOOGL has damaged its 50-day shifting common in 2024, and truly examined the 200-day in early March earlier than bouncing greater.
Apple, Inc. (AAPL)
With AAPL, we’re now attending to the weakest of the group when it comes to their 2024 efficiency. Apple scores a 9.1 within the massive cap SCTR rankings, that means it is within the backside 10% of US massive cap shares as ranked by their tendencies. This chart is presently testing worth and Fibonacci help, and a break under this key help may open the door to additional draw back for AAPL.
Tesla Inc. (TSLA)
If you happen to’re on the lookout for basic instance of a inventory in a confirmed downtrend, look no additional than TSLA. Right here we will observe decrease highs and decrease lows, worth under two downward-sloping shifting averages, and RSI persistently under the 50 stage. TSLA even broke under Fibonacci help earlier in March. A vote for Tesla could be an optimistic leap of religion on a reputation that definitely has not impressed in Q1.
There are your eight shares, with a quick technical evaluation abstract of every chart. Which inventory do you see as the perfect alternative in Q2, and why? Watch the video under, then drop a remark together with your vote and your reasoning!
RR#6,
Dave
P.S. Able to improve your funding course of? Take a look at my free behavioral investing course!
David Keller, CMT
Chief Market Strategist
StockCharts.com
Disclaimer: This weblog is for academic functions solely and shouldn’t be construed as monetary recommendation. The concepts and methods ought to by no means be used with out first assessing your individual private and monetary state of affairs, or with out consulting a monetary skilled.
The creator doesn’t have a place in talked about securities on the time of publication. Any opinions expressed herein are solely these of the creator and don’t in any manner characterize the views or opinions of every other individual or entity.
David Keller, CMT is Chief Market Strategist at StockCharts.com, the place he helps buyers decrease behavioral biases by way of technical evaluation. He’s a frequent host on StockCharts TV, and he relates mindfulness methods to investor determination making in his weblog, The Conscious Investor.
David can be President and Chief Strategist at Sierra Alpha Analysis LLC, a boutique funding analysis agency centered on managing danger by way of market consciousness. He combines the strengths of technical evaluation, behavioral finance, and knowledge visualization to determine funding alternatives and enrich relationships between advisors and shoppers.
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