2 of 3 Trillion Dollar Mega Caps Just Signaled Sell!
By Thu, Jan 23, 2020
There are now three $1+ Trillion-Dollar mega caps publicly traded in the stock market. They are Alphabet Inc (GOOGL), Apple Inc (AAPL) and Microsoft Corp (MSFT). These three companies make up a total of approximately $4 trillion in market cap and are over 10% of the S&P 500 alone. These stocks are all up huge in the last year, with Apple adding over a 100% gain since early 2019. Investors are running into these stocks as the hype is growing daily. However, there is a major bearish signal that investors should pay close attention to.
The bearish signal is showing up on two of the three trillion dollar mega caps and could signal a major stock market top. On both Microsoft and Alphabet there is a daily topping tail that just formed. Yesterday, Microsoft put in a topping tail and today Alphabet put in a topping tail. For those that are not aware, topping tails signal a major top in a stock or market as institutional selling sell into the smaller investors buying, creating a long tail on the candlestick chart.
The reason this is worth taking note of is these mega cap stocks are the leaders in the market. Two of three signaling a sell and making up 10%+ of the S&P is definitely something smart investors should be fully aware of. In addition, these stocks have surged in value and are extremely overbought on both fundamental and technical analysis. Essentially, everyone knows a correction will come, but the timing has been in question…until now.
Based on the recent run in these stocks, a 10-20% correction is likely. This could easily equate to a 10%+ correction in the stock market.
About the Author
Chief Market Strategist Gareth Soloway has been an avid swing and day trader since his days at Binghamton University where he studied Economics. After college, Gareth quickly excelled as a financial adviser but his heart was always in swing and day trading. He had this long standing belief that he could help investors make more money by advising them on shorter term investments (holding a stock for days to weeks) than the buy and hold crowd who lost 50% of their money during every market collapse. “Why not profit during the bear markets just like the bull markets”, he said. While helping others gain financial independence during the day, he spent his nights studying charts and price action, developing a unique market trading system that put his profits on a rocket ship. Some nights he would barely sleep when he found a new technique that was proven, once back-tested.
