The “Core” Of The Nasdaq:
Old tech names still dominate the Nasdaq, as the top 7 most represented in the tech rich benchmark are MSFT AAPL AMZN GOOGL FB CSCO and INTC. AAPL is close to retaking the worlds most valuable company from Mister Softee, as it has advanced 9 of the last 10 weeks, and this week rose a stellar 7.6%, its best weekly gain since the week ending 8/3/18. The stock has risen more than 30% since 1/3, which slumped 10% in gigantic trade, seemingly flushing out the last of the weak remaining shareholders. AAPL has been essentially a “proxy”for the Nasdaq, and its strength or weakness from here will have a big say in the direction of the benchmark and overall markets.
Chips Acting Chipper:
In the not to distant past, genuine leaders within the semiconductors was sparse at best. The only name I would be able to classify as a general was XLNX. How things change. The software arena still has better quality and quantity of rulers, but the semis are not lying down anymore. Much has been made that they were one of the first groups to show weakness early last year, and were never able to really recover much of the damage that was done. This week the SMH rose a powerful 5.2%, its second best weekly gain of 2019, and intraday it was above a cup with handle pivot of 106.37, but CLOSED just below it. Last Friday the ETF demonstrated a lot of courage bouncing off the very round par number. Look for the semis to flex their muscles even more going forward.
Software still is the place to be. The space has not really gone anywhere. Other subsectors within technology may have caught up, but software is the gold standard. Below is the chart of ZS and how it was profiled in our 3/11 Technology Report. The name has acted well POST breakout from a 7 month cup base pivot of 48.34. It recently burst above a bull flag, and although Friday recorded a bearish gravestone doji candle, PRICE action remains supreme. The week ending 3/1 screamed higher by 21.7%, followed by and UNCH finish the week ending 3/8 (that week registered a doji as well), and this week tacked on another 11%. The current 8 session winning streak needs a rest, but any weakness in this name should be bought.