The short squeeze that, in part, propelled popular tech stocks higher this year is over. Thus, prudent investors should pay attention to the dichotomy that is developing now.
The dichotomy is the interesting contrast between smart money flows and momo (momentum) crowd money flows. Money flows represent the final actions based on various fundamental, technical, quantitative, macro and sentiment factors. For this reason, money flows represent an easy shortcut to start an analysis. Money flows are especially important if you own or want to buy popular tech stocks. Let’s explore with the help of a chart.
Please click here for a chart showing segmented money flows in 11 popular tech stocks. Due to the popularity of these stocks, it makes sense to look at them in addition to the Dow Jones Industrial Average DJIA and broad-based ETFs such as S&P 500 ETF SPY, Nasdaq 100 ETF QQQ and small-cap ETF IWM. Please note the following:
• The smart money prefers Intel INTC over AMD AMD. In contrast, the momo crowd prefers AMD over Intel.
• The smart money prefers Alibaba BABA over Amazon AMZN. In contrast, the momo crowd prefers Amazon over Alibaba.
• The smart money prefers Alphabet, aka Google, GOOG, GOOGL over Apple AAPL. In contrast, the momo crowd prefers Apple over Google.
• Facebook FB and Microsoft MSFT have the distinction of being admired by both the smart money and momo crowds.
• The smart money is mildly negative on Netflix NFLX, perhaps because of the upcoming streaming offerings from the likes of Disney DIS, AT&T T, and CBS CBS.
• The momo crowd is usually positive on Tesla TSLA but has now turned neutral.
• The momo crowd continues to stay positive on Nvidia NVDA but the smart money is neutral.
The chart also shows the relative rankings of the 11 popular tech stocks. The rankings are based on the six screens of the ZYX Change Method. Please click here to learn about the six screens…Read more at MarketWatch.
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