Shares went on a tear the final seven weeks with Nasdaq 100 shares main the cost. The S&P MidCap 400 SPDR (MDY) and Russell 2000 ETF (IWM) gained greater than QQQ during the last seven weeks, however QQQ remains to be the one main index ETF to exceed its 2021 excessive and report a brand new all time excessive. Chartists on the lookout for momentum leaders ought to nonetheless deal with the Nasdaq 100.
The chart above exhibits QQQ with two main uptrends (inexperienced arrows) and IWM with two buying and selling ranges (blue arrows). IWM seems to be poised to interrupt out of its 18 month buying and selling vary, however it stays properly beneath the November 2021 excessive. In brief, QQQ exhibits rather more “trendiness” than IWM and I might stick with QQQ.
Choosing a spotlight index is necessary for momentum methods. I’ve examined many methods utilizing large-caps, mid-caps, small-caps and Nasdaq 100 shares. S&P 500 and Nasdaq 100 shares outperformed on a risk-adjusted foundation as a result of small-caps and mid-caps methods generated extreme drawdowns. Small-caps are merely not definitely worth the trouble, IMHO.
TrendInvestorPro runs momentum rotation methods that commerce shares within the S&P 500 and Nasdaq 100. These methods use pattern indicators to search out uptrends and a rating indicator to establish the leaders. The thought is to purchase the highest ten and promote after they drop out of the highest twenty. A few of this week’s leaders embody META, NVDA, CRWD, ADBE, MSFT and AVGO. See CandleGlance chart above.
Take a look at TrendInvestorPro to be taught extra about our momentum-rotation methods and the efficiency metrics. We even have a chart buying and selling technique with setups featured each Tuesday and Thursday. Click on right here to realize quick entry.
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Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic method of figuring out pattern, discovering indicators inside the pattern, and setting key value ranges has made him an esteemed market technician. Arthur has written articles for quite a few monetary publications together with Barrons and Shares & Commodities Journal. Along with his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Enterprise College at Metropolis College in London.
