Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

Rotation Out of Growth Stocks Takes Hold: Value Stocks Set to Outperform Now?

By Michael KramerStock MarketsDec 05, 2023 02:32AM ET
www.investing.com/analysis/rotation-out-of-growth-stocks-takes-hold-value-stocks-set-to-outperform-now-200644122
Rotation Out of Growth Stocks Takes Hold: Value Stocks Set to Outperform Now?
By Michael Kramer   |  Dec 05, 2023 02:32AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
NDX
+1.44%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US500
+0.80%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NVDA
+4.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
SPYV
+0.44%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
KRE
-1.16%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
SPYG
+1.27%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Stocks finished the day lower, with the S&P 500 declining by 54 bps and the Nasdaq 100 dropping by 99 bps.

Yesterday felt like a continued rotation from what was seen on Friday when small-caps and cyclical rallied, and large-cap technology struggled.

I think this rotation is most visible in the S&P 500 growth ETF (NYSE:SPYG) to S&P 500 value ETF (NYSE:SPYV), which shows a breakdown that is occurring currently.

The ratio shows a clear head and shoulders pattern, which formed and broke, and projects that the growth ETF continues underperforming the value ETF.

How that plays out is anyone’s guess because the ratio only tells performance on a relative basis, but not the direction.

SPYG/SPYV-Daily Chart
SPYG/SPYV-Daily Chart

Interestingly, yesterday, the Nasdaq 100 gapped below the uptrend that formed from the December bottom one year ago.

This seems essential because the index recently gapped above the trend line on November 14.

It may be nothing, but generally, when gaping above or below a trend line, it could be a sign of a breakout or breakdown. I will be taking this gap down yesterday as a warning message.

Nasdaq-100-4-Hour Chart
Nasdaq-100-4-Hour Chart

The Nasdaq 100 also gapped below the 10-day exponential moving average, which could signal a change in trend. As long as the index stays below this moving average, it would be consistent with a move lower having started.

Nasdaq-100-Daily Chart
Nasdaq-100-Daily Chart

Nvidia Stock Signaling a Trend Change for Broader Market?

Nvidia (NASDAQ:NVDA) has been trading below the 10-day exponential moving average for a few days and may already signal a trend change for the broader index.

It has also failed twice at that $500 region, both around earnings. When stocks report better-than-expected results and guidance and do not go higher, it tells you a lot about the potential direction of the price.

NVIDIA-Daily Chart
NVIDIA-Daily Chart

Regional Banks Approach Resistance

Banks have benefitted at the expense of technology and can potentially work for some time as long as the soft landing narrative persists in the broader market.

The KRE is getting close to resistance at $49.50, and the ETF can clear resistance. It probably has room to run to around $56, where resistance appears at the July and December 2022 bottoms.

KRE-Daily Chart
KRE-Daily Chart

Original Post

Rotation Out of Growth Stocks Takes Hold: Value Stocks Set to Outperform Now?
 

Related Articles

Rotation Out of Growth Stocks Takes Hold: Value Stocks Set to Outperform Now?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Otis Grant
Otis Grant Dec 05, 2023 7:07AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good thing I have a huge position in DPST from the low 40s
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email