You simply cannot count out tech stocks these days!
Looking at the markets a week ago and then again today would give you two completely different stories.
Last week, tech was experiencing heavy sell-off as investors were rotating into “reopen” plays.
This week, it looks like the buyers are stepping back in to scoop up all these beaten down tech stocks!
This action is boosting the tech-heavy Nasdaq which posted a gain of about 2.5% yesterday!
Now, the Nasdaq still has some ground to cover before reaching it’s February highs, but it’s definitely on the right path.
A profit-taking pull back followed by a strong rally is a healthy sign that an index is ready to assume leadership once more!
Another important factor is that these rallies are sticking and building on eachother… If they kept getting sold off then investors would most likely lose confidence in the long term.
Lastly, we can look forward to the potential of more money flowing into the markets now that another round of stimulus checks are going out.
Bottom line: I’m remaining bullish until proven otherwise!
Keep it In the Money,
Trading Tip of the Day: Don’t Chase a Stock That’s Out of Reach
It’s easy to get some fear of missing out when the market is hot like this, but we have to remember not to chase stocks that are out of reach.
Yes, stocks have been going up for a few days now. That doesn’t mean they always will be, especially considering how volatile the market is nowadays!
Be sure to keep in mind that there will always be opportunity in the market. Regardless of how things look on any given day, the opposite can happen just as quickly.
Just in 2020 alone, there were countless flips between sell-off periods and rallies.
It can definitely be frustrating watching stocks fly out of reach when you don’t own them, but it’s even worse to buy a stock at its peak and watch it retreat.
So don’t worry if you didn’t buy in ahead of this rally…
Just give it time and you’ll certainly find new entry points, these are simply the ebbs and flows of the market.
Staying disciplined at times like this is what separates great traders from lucky ones!
— Greg Guenthner