General Stock Ideas

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2 of 3 Trillion Dollar Mega Caps Just Signaled Sell!

There are now three $1+ Trillion-Dollar mega caps publicly traded in the stock market. They are Alphabet Inc (GOOGL), Apple Inc (AAPL) and Microsoft Corp (MSFT). These three companies make up a total of approximately $4 trillion in market cap and are over 10% of the S&P 500 alone. These stocks are all up huge in the last year, with Apple adding over a 100% gain since early 2019. Investors are running into these stocks as the hype is growing daily. However, there is a major bearish signal that investors should pay close attention to.

The bearish signal is showing up on two of the three trillion dollar mega caps and could signal a major stock market top. On both Microsoft and Alphabet there is a daily topping tail that just formed. Yesterday, Microsoft put in a topping tail and today Alphabet put in a topping tail. For those that are not aware, topping tails signal a major top in a stock or market as institutional selling sell into the smaller investors buying, creating a long tail on the candlestick chart.

The reason this is worth taking note of is these mega cap stocks are the leaders in the market. Two of three signaling a sell and making up 10%+ of the S&P is definitely something smart investors should be fully aware of. In addition, these stocks have surged in value and are extremely overbought on both fundamental and technical analysis. Essentially, everyone knows a correction will come, but the timing has been in question…until now.

Based on the recent run in these stocks, a 10-20% correction is likely. This could easily equate to a 10%+ correction in the stock market.

See the chart here: https://inthemoneystocks.com/2-of-3-trillion-dollar-mega-caps-just-signaled-sell/

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com