Recent sessions have shown a clear shift toward “value” stocks that would benefit from the coronavirus pandemic going away. The Nasdaq-100, e-commerce and software have lagged as energy. Financials, industrials and the Russell 2000 (IWM) have ripped higher.
However this goes against the dominant trend in 2020 (upside in technology stocks). It’s also important to remember that investors initially bought technology stocks after the election. They only knee-jerked into “value” stocks and IWM on Monday after Pfizer’s surprise vaccine announcement.
Some traders fade such knee-jerk reactions to unexpected news. Instead, they stick with the dominant trend.
This could be important to realize today because the mother of all technology stocks, Apple (AAPL), is attempting to break out of a three-month downtrend. Success by Tim Cook’s company could lift the entire Nasdaq-100.
Also remember that reports from suppliers like Qualcomm (QCOM) seemed to confirm the new iPhone 12 is meeting with strong demand. And just yesterday AAPL unveiled some new Macs using its own in-house technology.