1/ New Highs are On the Rise
2/ Laggards Play Catch Up
3/ Betting Big on Biotech
4/ Retail’s Ready to Move
5/ Retail’s Ready to Move
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1/
New Highs are On the Rise
The bulls were on parade this week after a decisive election result, and an additional interest rate cut helped drive investors further out on the risk curve.
Courtesy of Optuma
Strength in risk assets remains broad-based. At the index level, the equal-weight S&P 500 is making new all-time highs alongside the market-cap-weighted indexes to confirm the recent breadth thrusts.
The technology sector’s rally continues to broaden out, with the software ($IGV), cybersecurity ($HACK), and other sub-sector ETFs breaking out to new all-time highs. Magnificent Seven performance is also broadening beyond Nvidia, with Amazon joining the party after upbeat earnings and Jeff Bezos’ selling spree ending. And finally, crypto is going $BONK-ers as Bitcoin hits a new all-time high after seven months of consolidation.
As technical analysts, a rise in new highs is a positive sign for the bull market in the long term, even if some price moves are a bit extended in the near term.
2/
Laggards Play Catch Up
While the new all-time highs list is getting all the attention, many popular stocks are also making multi-year highs as investors bet on them playing catch up.
SoFi Technologies is a great example of this in action, with the company’s fundamentals gaining momentum and helping push prices above long-term resistance. Recently, the stock cleared the $10-$11 resistance level where it came public. Meanwhile, other beaten-down stocks like Upstart rose sharply this week as investors look for the next Carvana-like move.
Courtesy of Optuma
As for retail investors and traders on Stocktwits, there’s been a major uptick in activity and overall bullishness surrounding these stocks for much of the last year. And these recent breakouts have turned that sentiment into overdrive.
3/
Betting Big on Biotech
Speaking of catch-up plays in the market, one of the areas retail investors and traders are focused on is the biotech industry. The equal-weight biotech ETF ($XBI) has been firtling with a breakout from a 3-year base for much of 2024, and bulls are betting on new highs coming soon.
Courtesy of Optuma
Notably, retail investors and traders on Stocktwits are showing ‘extremely bullish’ sentiment toward this sector amid a sharp increase in message activity. If this breakout is successful, this industry group will be a major focus area for retail headed into year-end and 2025.
4/
Retail’s Ready to Move
Another area retail investors and traders on Stocktwits are looking to play catch up is the retail sector ETF ($XRT).
Like biotech, it’s spent much of the last seven months consolidating in a tight range and is now test resistance again. A close above the 79-80 region would confirm a breakout, with a rising 200-day moving average providing some support underneath.
Courtesy of Optuma
5/
Crypto Goes $BONK-ers
Finally, since it’s a bull market in risk assets, we have to talk about the craziness occurring in crypto. While Bitcoin reaches new all-time highs, some altcoins (and meme coins) are experiencing massive moves of their own.
Below is a long-term weekly chart of DogeCoin showing what happened last time this asset completed a multi-year base like it is currently. At the very least, many expect this recent run to drive prices back to their 2021 highs, which would still be roughly 200% from current levels.
Courtesy of Optuma
As for the Stocktwits community, our trending and most active tickers list on the site has been dominated by altcoins like BONK coin. Believe in the comeback or not, retail investors and traders have significant risk appetite right now, and it’s very clear where their attention is focused in crypto.
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Originally posted 11th November 2024
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