Earnings season has started. Wall Street is bullish on the first phase of President Trump’s trade deal with China. The stock market is near highs after rising for a decade. At a time like this, it’s important to pay attention to the other side of the story.

Here’s the key question for technology investors: “Should you buy, add, sell, trim or even short-sell specific technology stocks now?”

The best tool to answer the question is to look at segmented money flows. Let’s explore with the help of a chart.

The chart

Please click here for a chart showing segmented money flows in 11 popular tech stocks.

Note the following:

• Momentum crowd money flows are extremely positive in Apple’s AAPL  shares. This is a big turn. Momentum crowd money flows have not been consistently extremely positive in Apple for a long time. (The momentum crowd consists of individual investors chasing growth stocks.)

• There is also a big turn in momentum crowd money flows in shares of Amazon AMZN, Netflix NFLX  and Nvidia NVDA  to very positive.

• Of special interest is Netflix. The momentum crowd was buying Netflix near its highs. When Netflix initially fell, that crowd kept on buying it, perhaps on hopes of a rebound. Such hopes were justified to some extent because in the past Netflix had typically rebounded. When Netflix kept falling and a rebound did not occur, the momentum crowd started selling Netflix near its low. Now the momentum crowd is again buying Netflix.

• Among semiconductor stocks, momentum crowd money flows are extremely positive in Advanced Micro Devices AMD,   but negative in Intel INTC.

• Smart money flows are mildly positive in Intel and Facebook FB. (The smart money represents professional investors.)

• Smart money flows are positive in Alphabet GOOG GOOGL.

• Alibaba BABA has been a battleground stock. Momentum crowd money flows are positive but smart money flows are neutral.

• Microsoft MSFT  is now considered a “safe” stock in many portfolios. A review of analysts’ reports shows the prevailing wisdom about Microsoft stock is “heads you win, tails you win.” Momentum crowd money flows are very positive in Microsoft. Prudent investors ought to note that smart money flows are neutral.

• The momentum crowd has not lost faith in Tesla’s TSLA  stock. Momentum crowd money flows are mildly positive in Tesla.

Short squeezes

The chart shows the potential for short squeezes in 11 popular tech stocks….Read more at MarketWatch.

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