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RoboStreet – April 1, 2021
Tech Sector Back Up and Running
Following a six-week period of consolidation, the tech sector is re-emerging from its winter slump. Fueled by fresh interest in the semiconductor sector, a broad-based rally in technology is helping to propel the S&P up through the 4,000 level for the first time.
Capital spending on IT is expected to be at record levels this year and first-quarter earnings are likely to be strongly coupled with robust forward guidance. This is a timely rotation for the market in that most of the leading cyclical and value stocks are technically overbought.
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
The trading landscape shows SPY continued to trade higher and retesting the all-time high. Reflationary stocks underperformed today and the growth stocks were able to stage an impressive rally. Short term, the SPY range remains between $387 and $400. The SPY is close to the end of the sell-off and it is a matter of time for the SPY to trade above $400 level. The DXY is losing its momentum. The TLT continue to rebound.
I would be a buyer using any short-term corrections and use a dollar-cost averaging strategy to accumulate positions. If you are trading options consider selling premium with May and June expiration dates. Based on our models, the market (SPY) will trade in the range between $380 and $420 for the next 6 weeks.
A good way to play the rebound in tech is by owning the Invesco QQQ Trust (QQQ), an ETF that reflects the Nasdaq 100. Considering the low levels stocks like Amazon.com (AMZN), Apple Inc. (AAL), Alphabet Inc. (GOOGL) and a host of other big-cap tech stocks are coming off of, QQQ has a clear shot at taking out the all-time high of $338.19 over the course of the next month. Leading the way is Microsoft Inc. (MSFT) as the stock is challenging its all-time high after winning a $20 billion contract from the Pentagon this week.
Our AI platform measures the probability of forward price movement where we can determine our timeline for how long we might want to own the stock. The Seasonal Chart shows MSFT has a bullish runway for the next 20, 30, and 40-day periods.
QQQ is a fairly concentrated set of holdings, the top ten making up 51% of total assets.
Just yesterday, QQQ cleared its 50-day moving average, a key technical resistance level that opens the way higher for bullish momentum to build.
Depending on our AI indicators, we could be adding QQQ to our RoboInvestor advisory service portfolio. Our recommendations are published every other Sunday where we provide two picks for the week ahead. This weekend, we’re scheduled to release our picks for next week. Make sure not to miss out!
Another ETF that is coming off a recent low is the Direxion Work From Home ETF (WFM). As the reopening of the economy saw the market rotate out of the remote work stocks, what is apparent is that the vast majority of companies are maintaining a permanently installed base of the remote workforce.
Within the top ten holdings of WFH that make up about 35% of total assets, there are some high-powered cyber-security, networking, and communications stocks that are under fresh accumulation.
Top holding Plantronics Inc. (PLT) shows up very well when we again apply our Seasonal Chart to the stock. In this case, we get bullish probability readings for the next 20, 30, 40, and 50-day periods.
Here too, if our AI indicators flash a buy signal, I’ll be inclined to consider putting WFH into the RoboInvestor Portfolio given the rotation back into these stocks of late.
It’s important to note that RoboInvestor will recommend blue-chip stocks and ETFs that include market sectors, commodities, precious metals, interest rates, currencies, indexes and volatility. It’s an unrestricted advisory service where we work with whatever our AI platform finds to be excellent risk/reward trades that fit our parameters.
Our Winning Trades Percentage of 91.39% speaks for itself. Going back three years we’ve been building wealth for our members at a very steady rate.
Don’t let the next earnings season come upon you without the valuable AI tools provided by RoboInvestor. If you need to do some Spring cleaning with your portfolio, let us help and guide you to big gains in 2021. Make RoboInvestor your new set of market tools to profit from. I personally look forward to welcoming you aboard!
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
*Please note: RoboStreet is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services. If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, MonthlyTrader, or RoboInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.
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