TPA now has a Sell rating on 4 of the top 12 stocks in the S&P500; AAPL, MSFT, META, and UNH. MSFT’s negative rating came yesterday. (Table and charts below). Each of these stocks has convincingly broken below its long-term uptrend line. The relative performance chart shows that all of the stocks, with the exception of UNH, have greatly outperformed the S&P500 YTD.
What are the implications?
- These stocks have been the leaders all year. When the leaders turn down, others will follow.
- These are just singular events that do not have implications for the larger market,
- These breakdowns will reverse and these stocks will make new 2023 highs.
What should clients do?
Clients should monitor this situation carefully. Right now, it is just 4 stocks. If more stocks follow the breakdown pattern, clients should become more risk-averse. Either way, these 4 stocks are stocks to avoid for now until they prove themselves again.
Jeff Marcus founded Turning Point Analytics (TPA) in 2009 after 25 years on trading desks and 13 years as a head trader to provide strategic and technical research to institutional clients. Turning Point Analytics (TPA) provides a unique strategy that works as an overlay to clients’ good fundamental analysis. After 10 years of serving only large institutions, TPA now offers its research services to mid and small managers, RIA’s, and wealthy sophisticated individuals looking for a way to increase their returns and outperform their peers.