September 4, 2020, 1:25 pm EDT
Technology Down but Industrial, Financial and Cruises Up
Breakdown is confirmed after yesterday and today’s sell-off. Technology was down significantly led by AAPL, ZM, AMZN, MSFT, GOOGL, FB, TSLA, NVDA all these high flyers. In fact, there should be no surprise that pull back is expected for profit taking and setting up a base. The other possibility also exists where bubbles burst after parabolic run-up. We do not know which scenario applies to these stocks at this moment. Following points are to be observed to judge if these stocks are gone and no longer bullish.
- Keep falling in high volume
- Fail to make a base
- Perform behind others consistently
These stocks may become candidates for shorting or put options if above scenarios hold.
On the other hand, we can see industrial (CAT +1.2%), financial (JPM +1.3%) and Cruises (CCL +3%, NCLH +2.4%) keep moving up during tough times. It means stock markets are still strong with rotation.
So, staying away from technology and pay attention to these sectors and industries are the way to go.