The finance world is always abuzz with activity, and these recent developments with NVDA and Mag 7, and the Russell 2000 and the retail sector are no exception. The unfolding events certainly provide a unique perspective on the ever-changing dynamics of the stock market, while dishing valuable insights for investors.
NVDA, or Nvidia Corporation, recently made headlines owing to a significant breakdown. One of the largest producers of graphic processing units (GPUs), Nvidia’s stocks had a predominantly bullish trend, boosted by the promotional prospects and demand in the gaming, professional visualizations, data centers and auto markets. However, with the stock currently breaking down, investors are growing increasingly concerned.
Following its impressive rally run, NVDA has been portraying signs of weakness, breaking down its routine up trending channel. Investors were taken aback by this sudden revelation, causing a sense of reluctance among potential shareholders. This breakdown could potentially affect NVDA’s overall performance, yet some market analysts see this downshift as a possible buying opportunity given the company’s strong market position.
Moreover, the Mag 7, or the Magnificent 7, comprising of the big tech giants (Google, Amazon, Apple, Nvidia, Microsoft, Tesla, and Facebook), have not been immune to this downtrend either. Renowned for their consistent up trends and robust performances, these front-runners have been the litmus paper to the overall tech health. Their recent flow breakdown could potentially mark a shift in the tech landscape, stirring an air of anticipation among investors.
Unlike NVDA and Mag 7, the Russell 2000 index (IWM) and the retail sector measured by the Dow Jones Transportation Average (IYT) have been showing encouraging numbers, having received “Silver Cross” Buy signals.
The Russell 2000 index, which comprises of small-cap stocks, has shown tremendous resilience amidst the market turbulence, clearly outperforming other segments. With the “Silver Cross” buy signal—which occurs when the 50-day simple moving average crosses above the 200-day moving average—it employs the strategy of ‘riding the trend’ which might potentially harbour long-term investing profits.
Similarly, the Dow Jones Transportation Average (IYT), a price-weighted average that focuses on rail, freight, and airlines services, has recently been granted a Silver Cross buy signal. This comes at an opportune time when the retail sector is already witnessing positive changes. As the pandemic-related lockdown measures loosen up, and global supply chains recover
