As stocks were pulling back 10 days ago, I wrote an article call “Stock Market Pullback or Correction: Eyes on Large Cap Tech Stocks“
Today I will provide an update and why it’s important that investors continue to watch technology stocks, and in particular, the Nasdaq 100 Index.
As you all are aware, the selling we saw in late January turned into a pullback (3-5 percent) and not a correction (+10%). At that time, I posted charts of the Nasdaq 100 and Alphabet (GOOGL) and highlighted why it was important to follow large cap tech stocks.
The reason was (and still is) simple: Large cap tech stocks are a major market leader. Investors want to be a part of the market (and leading stocks) when leaders are in bullish formations. When they begin to stumble, we need to pay attention and monitor our technical price indicators (and follow our plan).
Note that the following MarketSmith charts are built with Investors Business Daily’s product suite.
I am an Investors Business Daily (IBD) partner and promote the use of their products. The entire platform offers a good mix of technical and fundamental data and education.
NASDAQ 100 Index Chart
Pictures are worth a 1000 words so I’ll be brief.
Clearly, price recovered and carried the broader stock market higher. Pay attention to the Nasdaq 100 and its band of large cap tech stocks. If / When they begin to stumble, it will be a warning worth heeding.
Alphabet (GOOGL) Stock Chart
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.