May 9, 2022, 11:07 am EDT
Few Survivors In the Tough Markets
While Nasdaq and S&P 500 made a new 52-week today with Nasdaq entering into the bear market mode (-25% down), it would be easier to identify the survivors and strongest stocks now.
By checking out the sector map in the consumer staples sector we can see many green color stocks.
Food (KHC), household items (CLX), and packaged foods (CPB), are breaking out to begin their uptrend rally.
Obviously, many investors dumped Tesla (TSLA) -7%, Uber (UBER) -6%, Palantir Technologies (PLTR) -20%, and Nvidia (NVDA) -6% into defensive stocks. We believe this process is going to continue for the most part of the bear cycle. In fact, many fancy companies that cannot make profits are going to disappear in this process.
Similarly, cryptocurrencies are likely to tumble to the basement level. For example, Coinbase (COIN) dropped -by 15% today to 88. It is about -77% off from its high point of 370 made 6 months ago. Bitcoin is currently traded at around 32538. We think it could go much lower together with other virtual currencies. Reality is solid and hard. The virtual world will not be able to fight with it.
However, the food and household products are most likely to become survivors and winners in this battle, in our opinion.