Riding the Stock Market Wave: How to Maximize Your Profits | chart watcher

Post-election euphoria may have been temporarily dampened as US stock market indices closed lower on Tuesday. The tech-heavy Nasdaq Composite Index ($COMPQ) fell only 0.09%, while the S&P 600 Small Cap Index ($SML) fell the most, closing down 1.54%.

A MarketCarpets Ride

MarketCarpets on StockCharts on Tuesday, a day when stock indices were down. This shows that most of the downward movement has occurred in a few sectors. Materials, healthcare, real estate, utilities, industrials, and energy sectors were hardest hit. Consumer discretionary goods were also hit hard, but Amazon.com, Inc. (AMZN) is the highest capital-weighted stock in its sector.

Figure 1. Tuesday market carpet. Although many sectors were red, Mag 7 stock closed high.Image source: StockCharts.com. For educational purposes.

What stands out on MarketCarpet is that the heavily weighted Mag 7 stocks NVDA, MSFT, GOOGL, AMZN, META, and NFLX closed higher on the day. AAPL was an exception. Closed without changes. So it’s no surprise that communications services and technology were the best performers on Tuesday.

Because most large-cap weighted stocks closed higher. Nasdaq 100 Equal Weighted Index ($NDXE) The chart makes sense. Daily chart below This shows that the index remains strong despite Tuesday’s decline (-0.41%). $NDXE hit a new post-election July high and is trading relatively close to all-time highs.

Figure 2. Nasdaq 100 Equal-Weighted Index ($NDXE) daily chart. Even though large-cap weighted stocks have performed well, equal-weighted stocks have been strong despite underperforming the Nasdaq 100 Index ($NDX).Chart source: StockCharts.com. For educational purposes only.

The last bar on the chart is a rebound from the low on November 7 (the last large chart). After the long price on November 7, there are now three short shares, indicating that market participants are indecisive one way or another (see the candle bars within the green rectangle).

$NDXE has underperformed the Nasdaq 100 Index ($NDX), which is not unusual. What’s interesting is that relative performance is decreasing. This could mean that we could see a shift towards technology and telecommunications services after this year.

Find stocks using MarketCarpets

With so many large-cap tech stocks trading at such high prices, does that mean less popular small-cap tech stocks won’t see gains? Not necessarily. One way to identify underweight technology stocks is to look for technically strong stocks within the best-performing sectors that are underpriced.

For example, in MarketCarpet, expand the Technology sector (click on the Technology header) and follow the path below.

Select SCTR from: measurement > 1M change: By color > Equal weight size standard.

I use equal weighting because it makes it easier to identify different stocks. Please note that this is just an example. All parameters are available to meet your investment requirements.

The screenshot below shows the results based on the selection criteria mentioned above.

Figure 3. In-depth analysis of the technology sector. Organizing MarketCarpets to be equally weighted with SCTR makes it easier to identify technically strong stocks.Image source: StockCharts.com. For educational purposes.

The table on the right displays the top performers based on the criteria you selected. Hover over the top-performing stock squares and identify stocks that meet your price-per-share criteria in the thumbnail chart. Then double-click MarketCarpet’s tile to see the symbol summary page for: Stocks of your choice. You can do a more in-depth analysis here. If a stock has upside potential, add it to the appropriate ChartList.. setting price alert So, you will be notified when an alert is met.

conclusion: The stock market offers many opportunities. The key to taking advantage of these opportunities lies in market analysis. StockCharts MarketCarpets performs a top-down analysis of the market to help you identify stocks or ETFs to trade.

disclaimer: This blog is for educational purposes only and should not be construed as financial advice. You should not use any of our ideas and strategies without first evaluating your personal and financial situation or consulting a financial professional.