Is the Nasdaq Starting to Run Out of Gas?

Enjoy this post? Share the love.

Press the chart to view full-sized image

The Nasdaq 100 Index is still trading near its all-time high, but relative weakness in leading stocks may be hinting at a possible tech correction around the corner. Here’s our simple and quick analysis to help you prepare for the market’s next move.

Editor’s Note: The commentary below appeared in the July 15, 2021 issue of The Wagner Daily stock trading report. The Watchlist and Model Portfolio section of the report is restricted to paid subscribers.

The Nasdaq Composite, Nasdaq 100, and S&P 500 indices remain near their highs, but recent price action “under the hood” may be cause for concern.

Out of the roughly 120 leadership stocks on our daily watchlist, 41 stocks were down 3% or more yesterday (July 14).

Leadership has narrowed to just a few big cap tech stocks pushing higher, which is not a positive sign for the current rally.

The daily chart below shows the Nasdaq Composite on top,  and the percentage of stocks trading above their 40-day moving averages on the bottom section:

Press the chart to view full-sized image

The percentage of stocks trading above their 40-day moving averages (~35%) is near a level that we normally associate with a significant pullback in the market–BUT the Nasdaq is at its high.

That’s quite a bit of (bearish) divergence!

In the July 14 trading report, we tightened stops to reduce risk, and even proactively sold a few stocks ahead of their stops per intraday alert on Wednesday morning.

Currently, we have closed most of our open positions for a scratch or small loss, while locking in a +20% gain on $NVDA.

Our subscribers are always happy that The Wagner Daily trading strategy continues to protect profits–even if it means sitting on the sidelines for a short period.

Being prepared and informed on a daily basis is the key to success in a dynamic, volatile market.

That’s why we constantly provide valuable information, powerful lessons, and timely trade alerts via our flagship daily stock trading report and new Wagner Daily PRO service.

As always, we will promptly notify subscribers of our exact entry, stop, and target prices for the next explosive trade setup we buy.

Sign up now to stay one step ahead of the market, protect profits, and receive real time trade alerts!


Enjoy this post? Share the love.
Deron Wagner

Deron Wagner is a professional trader, author of several ETF trading books, and the Founder of Morpheus Trading Group. Since 2002, he has been sharing his proven swing trading strategy with thousands of traders around the world. He has appeared on CNBC, ABC, and Yahoo! Finance Vision television networks, and is a frequent guest speaker at various global investing conferences.

Recent Posts

Unlocking Explosive Gains: Mastering the 20-Day EMA Pullback After a Strong Thrust

Missed the initial breakout? Don't worry - there's still a chance to catch that rocket! Today, we're diving deep into…

3 weeks ago

Nasdaq Flashes 3 Powerful Buy Signals: Your Ticket to Serious Profits

Discover the three powerful buy signals flashing in the Nasdaq and learn how to profit from the surprising shift in…

1 month ago

Tesla Stock Analysis: 5 Bullish Signals for Swing Trading $TSLA [Sept 2024]

Could Tesla (TSLA) be gearing up for a major bullish run? Veteran analyst Rick Pedicelli breaks down five critical technical…

2 months ago

NASDAQ’s Bloodbath: Navigating the QQQ Plunge and Uncovering Hidden Opportunities

The tech sector has recently experienced a significant downturn, with the NASDAQ index plummeting, but for astute traders, such market…

2 months ago

Decoding Nvidia’s 35% Tumble: A Technical Analysis Masterclass

In the high-stakes world of AI stocks, even giants can stumble. Join us as we dissect Nvidia's recent 35% correction…

3 months ago