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Afternoon Note

Nature of Breakouts

By Charles Payne, CEO & Principal Analyst
10/28/2019 2:05 PM

Like Friday, stocks bolted out of the gate, but couldn’t seduce enough money off the sidelines to prevent some stalling and drifting.   That’s the nature of breakouts, especially one that’s trying to happen on such a consequential week.

And there will be other extenuating inputs into the market this week from updates on China trade negotiations to updates on manufacturing and additional economic data.

But just like Friday, there continues to be rotation out of defensive safe havens Consumer Staples, Real Estate and Utilities into a mix of momentum names via Technology, and value with the action today in Health Care.

S&P 500 Index

+0.57%

 

Communication Services (XLC)

+1.21%

 

Consumer Discretionary (XLY)

+0.28%

 

Consumer Staples (XLP)

 

-0.34%

Energy (XLE)

 

-0.64%

Financials (XLF)

+0.63%

 

Health Care (XLV)

+1.12%

 

Industrials (XLI)

+0.31%

 

Materials (XLB)

+0.15%

 

Real Estate (XLRE)

 

-0.86%

Technology (XLK)

+1.08%

 

Utilities (XLU)

 

-0.79%

Leader of the Pack

Tech is higher, but it’s not the names you’re thinking of. Those big names that dominate headlines have been struggling, but semiconductors are on fire powering the SOXX to an all-time high. The move came after Lam Research (LRCX) posted an amazing beat, negating disappointing results from Texas Instruments (TXN).   The index finally broke out after failing in July and September.  I say ride that wave.

 

SOXX Top 10 Holdings (60.25% of Total Assets)

Name

Symbol

% Assets

Lam Research Corp

LRCX

4.23%

Intel Corp

INTC

8.38%

Texas Instruments

TXN

8.05%

NVIDIA Corp

NVDA

8.01%

Qualcomm

QCOM

7.56%

Broadcom

AVGO

7.53%

Taiwan Semiconductor Manufacturing

TSM

4.20%

KLA Corp

KLAC

4.16%

NXP Semiconductors

NXPI

4.12%

Applied Materials

AMAT

4.01%

 

Let’s keep our powder dry this afternoon.


 

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