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Tuesday, April 2, 2024

NASDAQ Breaks Out Once more; 2 Shares To Take into account NOW | Buying and selling Locations with Tom Bowley

U.S. equities are wrapping up the primary quarter in grand model. The QQQ, which tracks the NASDAQ 100, is zeroing in on a 20% acquire for the quarter, as I write this. We noticed an enormous rally in January 2023 and robust Januarys often recommend a robust yr forward. Based mostly on our Q1 efficiency, it might be exhausting to argue at this level. There’s extra technical work forward, which is to be anticipated after the completion of a cyclical bear market. In case you observe the “20% rule”, then the QQQ is now in a bull market, having moved up greater than 20% from its low of 253.26 on October 13, 2022. That confirms the tip of the 2022 bear marketplace for the NASDAQ.

So, for now, let’s assume the worst is behind us and we’ll be greater costs forward. What shares would possibly we contemplate shopping for and why? Listed below are two that I like:

Amazon.com (AMZN)

If the inventory market does effectively this yr, it will probably be because of the Fed hitting the brakes on rate of interest hikes, promptly a decrease 10-year treasury yield ($TNX) within the course of. In that sort of surroundings, I consider development shares will probably be the place a lot of the management resides. Amazon.com (AMZN) definitely matches the invoice. Technically, AMZN simply broke out of a bullish inverse head & shoulders continuation sample and broadline retailers ($DJUSRB) are lastly displaying relative power:

There are plenty of positives right here. Nothing has been confirmed but, when it comes to relative power, however the enchancment in 2023 is fairly apparent. The February absolute and relative highs are key goal ranges. Strikes above the February excessive could be extraordinarily bullish.

ServiceNow (NOW)

NOW is breaking out of an analogous bullish sample, clearing key overhead value resistance. However does it maintain the transfer by immediately’s shut? That’ll be what I am watching, as a result of if it does, I may see a pleasant run again to that February excessive. To the draw back, NOW held up within the help zone between value and hole help and is “NOW” poised to run:

Common quantity on NOW is 1.58 million over the previous 50 buying and selling days. In the present day’s quantity is over 800,000 within the first 90 minutes, so we’re seeing confirming quantity. It is pretty easy – both immediately goes to be a significant breakout or it will be a false breakout. It simply is determined by the place we shut. NOW was main the software program group ($DJUSSW) greater in January. It is lagged badly throughout its latest consolidation, however the NOW relative power line has begun turning greater once more (blue circle) and a breakout may set off a lot additional relative power forward.

I will be internet hosting our newest market outlook on Saturday, April fifteenth at 10:00am ET. In case you’re not sure of the bull vs. bear market debate and the place we at present stand, mark your calendar for our occasion. It’s going to be very instructional and open to the general public. We will probably be sending out invitations to our complete FREE EB Digest neighborhood, together with our EarningsBeats.com members. Merely CLICK HERE and join together with your identify and electronic mail to save lots of your spot!

Blissful buying and selling!


Tom Bowley

In regards to the creator:
is the Chief Market Strategist of EarningsBeats.com, an organization offering a analysis and academic platform for each funding professionals and particular person traders. Tom writes a complete Each day Market Report (DMR), offering steering to EB.com members daily that the inventory market is open. Tom has contributed technical experience right here at StockCharts.com since 2006 and has a basic background in public accounting as effectively, mixing a novel ability set to strategy the U.S. inventory market.

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