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Friday, June 07, 2024 4:40:00 PM
Recent Tech Selling Signals Big Future Upside
By: Lucas Downey | June 7, 2024
• Many tech-focused growth stocks were dumped by Big Money investors last week.
In fact, MAPsignals data noted the most risk-off action in technology shares since the market lows in October. Using the quality-laden Technology Select Sector SPDR ETF (XLK) as a proxy, you can see the recent decline:
Tech selling of this magnitude is uncommon.
A big catalyst this time around was the earnings miss by software company Salesforce.com, Inc. (CRM), which had investors hitting the exits and driving the share price down.
The selling hit other tech firms too – 44 tech stocks were sold on May 30 (roughly 20% of our tech universe), the most since Oct. 26.
This might seem like a downer. But it’s actually good news because recent tech selling signals big future upside.
Let me show you what I mean.
Recent Tech Selling Signals Big Future Upside
Since 2013, when 44 or more stocks are sold, the XLK ETF soars afterward:
Even better, MAPsignals data can help pinpoint the downtrodden names. For example, CRM is a top-15 holding in XLK and it was slammed:
But its fundamental story is solid, especially sales and earnings growth:
• 3-year sales growth rate (+18.1%)
• 3-year EPS growth rate (+590.9%)
• Profit margin (+11.9%)
Source: FactSet
Similarly, software firm ServiceNow, Inc. (NOW), which is also an XLK top-15 holding, has been sold heavily lately:
But it too is a financial powerhouse:
• 3-year sales growth rate (+25.7%)
• 3-year EPS growth rate (+184.6%)
• Profit margin (+19.3%)
Source: FactSet
A Map to Spot Top Stocks on Sale
Understanding that, it’s clear this could be a “buy the dip” opportunity. That was a wise move in the past for tech stocks in general.
If you bought CRM when red signals showed up in 2022-23, you’d be doing well:
The same is true for NOW. Buying the red-barred dips in 2022-23 was a winning move:
The bottom line is these tech liquidations are uncommon. When they happen, jump in with both hands.
A great way to do that is by tracking institutional money flows – it reveals tomorrow’s winners. It helps to have a map to spot top stocks on sale.
Read Full Story »»»
DiscoverGold
By: Lucas Downey | June 7, 2024
• Many tech-focused growth stocks were dumped by Big Money investors last week.
In fact, MAPsignals data noted the most risk-off action in technology shares since the market lows in October. Using the quality-laden Technology Select Sector SPDR ETF (XLK) as a proxy, you can see the recent decline:
Tech selling of this magnitude is uncommon.
A big catalyst this time around was the earnings miss by software company Salesforce.com, Inc. (CRM), which had investors hitting the exits and driving the share price down.
The selling hit other tech firms too – 44 tech stocks were sold on May 30 (roughly 20% of our tech universe), the most since Oct. 26.
This might seem like a downer. But it’s actually good news because recent tech selling signals big future upside.
Let me show you what I mean.
Recent Tech Selling Signals Big Future Upside
Since 2013, when 44 or more stocks are sold, the XLK ETF soars afterward:
Even better, MAPsignals data can help pinpoint the downtrodden names. For example, CRM is a top-15 holding in XLK and it was slammed:
But its fundamental story is solid, especially sales and earnings growth:
• 3-year sales growth rate (+18.1%)
• 3-year EPS growth rate (+590.9%)
• Profit margin (+11.9%)
Source: FactSet
Similarly, software firm ServiceNow, Inc. (NOW), which is also an XLK top-15 holding, has been sold heavily lately:
But it too is a financial powerhouse:
• 3-year sales growth rate (+25.7%)
• 3-year EPS growth rate (+184.6%)
• Profit margin (+19.3%)
Source: FactSet
A Map to Spot Top Stocks on Sale
Understanding that, it’s clear this could be a “buy the dip” opportunity. That was a wise move in the past for tech stocks in general.
If you bought CRM when red signals showed up in 2022-23, you’d be doing well:
The same is true for NOW. Buying the red-barred dips in 2022-23 was a winning move:
The bottom line is these tech liquidations are uncommon. When they happen, jump in with both hands.
A great way to do that is by tracking institutional money flows – it reveals tomorrow’s winners. It helps to have a map to spot top stocks on sale.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
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