The post-election euphoria might have taken a breather on Tuesday, because the US inventory market indexes closed decrease. The tech-heavy Nasdaq Composite ($COMPQ) was solely decrease by 0.09%, whereas the S&P 600 Small Cap Index ($SML) was down essentially the most—it closed decrease by 1.54%.

A MarketCarpets Journey

On a day when the fairness indexes closed decrease, Tuesday’s StockCharts’ MarketCarpets reveals that the downward transfer was largely from a handful of sectors. Supplies, Well being Care, Actual Property, Utilities, Industrials, and Power have been the worst hit. Client Discretionary was additionally hit onerous, aside from Amazon.com, Inc. (AMZN), the very best cap-weighted inventory within the sector.

FIGURE 1. MARKETCARPET FOR TUESDAY. Though a number of sectors have been a sea of crimson, the Magazine 7 shares closed larger.Picture supply: StockCharts.com. For instructional functions.

What stands out within the MarketCarpet is that the closely weighted Magazine 7 shares, NVDA, MSFT, GOOGL, AMZN, META, and NFLX, closed larger for the day. AAPL was the exception—it closed unchanged. So, it is unsurprising that Communication Providers and Know-how have been Tuesday’s prime performers.

As a result of a lot of the largest cap-weighted shares closed larger, pulling up the Nasdaq 100 Equal-Weighted Index ($NDXE) chart made sense. The every day chart under reveals that the index continues to be bullish regardless of Tuesday’s pullback, a decline of -0.41%. $NDXE broke above its July excessive post-election and is buying and selling comparatively near its all-time excessive.

FIGURE 2. DAILY CHART OF NASDAQ 100 EQUAL WEIGHTED INDEX ($NDXE). Although the massive cap-weighted shares carried out properly, the equal-weighted index can also be bullish regardless of underperforming the Nasdaq 100 Index ($NDX).Chart supply: StockCharts.com. For instructional functions solely.

The final bar on the chart hit the November 7 (the final massive physique day) low and bounced again. Because the lengthy physique of November 7, there at the moment are three quick our bodies, suggesting that market contributors aren’t decisive in a method or one other (see the candlestick bars inside the inexperienced rectangle).

Word that $NDXE is underperforming relative to the Nasdaq 100 Index ($NDX), which is not uncommon. What’s attention-grabbing to see is that the relative efficiency is declining. This will likely imply that we may see a rotation into Know-how and Communication Providers because the 12 months performs out.

Discovering Shares Utilizing MarketCarpets

With many mega-cap tech shares buying and selling at elevated costs, does this imply the much less sought-after smaller-cap tech shares will not see a lot upside motion? Not essentially. One method to establish among the smaller-weighted tech shares is to search for technically sturdy shares inside the top-performing sector which are decrease priced.

For instance, increase the Know-how sector within the MarketCarpet (click on Know-how header) and observe the trail under:

Choose SCTR from Measurements > 1M Change from Shade By > Equal Weight from Measurement By.

I exploit the equal weight as a result of it makes it simpler to establish the totally different shares. Word that that is simply an instance; you need to use any parameters that meet your investing wants.

The screenshot under is the results of the above-mentioned choice standards.

FIGURE 3. DIVING DEEPER INTO THE TECHNOLOGY SECTOR. Organizing the MarketCarpets by SCTR and equal weight makes it simpler to establish the technically sturdy shares.Picture supply: StockCharts.com. For instructional functions.

The desk on the correct shows the highest performers primarily based in your chosen standards. Mouse over the squares of these prime performers and, from the thumbnail chart, establish the shares that meet your price-per-share threshold. Then, double-click on the tile within the MarketCarpet to see the Image Abstract web page for your chosen inventory. From right here, you are able to do a deeper evaluation; if the inventory has upside potential, add it to an applicable ChartList. Set a value alert so that you’re notified when the alert is met.

The underside line: The inventory market affords many alternatives. The important thing to profiting from these alternatives lies in your market evaluation. The StockCharts MarketCarpets enable you to do a top-down evaluation of the market to establish shares or ETFs to commerce.

Disclaimer: This weblog is for instructional functions solely and shouldn’t be construed as monetary recommendation. The concepts and techniques ought to by no means be used with out first assessing your personal private and monetary scenario, or with out consulting a monetary skilled.