• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Let's Go Trend Spotting

Intraday trends -- relentless trends -- are becoming the name of the game, so let's focus on the rotation from Nasdaq names into the Russell 2000 and financials.
By TIMOTHY COLLINS
Apr 28, 2020 | 12:46 PM EDT
Stocks quotes in this article: TDOC, ZM, WORK, CHWY, RNG, CTXS, LVGO, PTON, IWM, QQQ, GOOGL, SBUX, AKAM, YUMC, YUM, MS, BA, GE, HAS, VLO, SPOT

Intraday trends are becoming the name of the game. Over the past month, I have noted a lot of intraday volatility with surges followed by pullbacks, then new surges. This happened in both directions without dependency on opening lower or higher. Now, we are returning to trends. Relentless trends. I pointed this out Monday with the Russell 2000 index as it marched higher. This morning, we saw the reverse happening on the Nasdaq. From a scalping standpoint, I prefer the back and forth intraday action as it provides fantastic opportunities. On the investing side, trends are much cleaner and clearer for multi-day to multi-month moves.
 
We're seeing the bloom come off the Covid-19 outbreak rose on Tuesday in regard to stock plays related to the pandemic. Teladoc Health ( TDOC) is shedding nearly 9%. Zoom ( ZM) is lower. Slack ( WORK) is lower. Chewy ( CHWY) is lower. RingCentral ( RNG) is lower. Citrix Systems ( CTXS) is lower. Livongo Health ( LVGO) is lower. Peloton ( PTON) is lower.
 
It's true the Nasdaq is off by 1% Tuesday, but these names are underperforming on a relative basis, many of them by quite a large margin.
 
The rotation from Nasdaq names into the Russell 2000 and financials continues in full force. This is the exact area where the outperformance of IWM fund ( IWM) compared to Invesco QQQ Trust  ( QQQ) hit a wall the last time around. It's possible this time will be different, but the push is even more extended than last time in terms of price, although the Full Stochastics appears a bit strong. How we finish on Tuesday and how this plays out on Wednesday should go a long way in answering that question. If the Russell 2000 can continue its strong performance in comparison to the Nasdaq for another day, then I expect it to close that big fall from February and March. In short -- expect a 5% to 10% outperformance by the Russell 2000 vs. the Nasdaq over the next six to eight weeks.
 
One thing I've noted on the intraday side, as well. Do not try to fade the outperformer and do not try to buy the underperformer. There has been no intraday "catch-up" when these divergences in performance have taken hold. The only time I've witnessed any flattening of the difference is in the last five to 10 minutes of the day, which has become its own little slice of insanity. Besides, if you are looking to play an intraday divergence, the last 10 minutes of the day isn't your target time frame. That time of the day likely needs its own strategy right now.
 
 
Earnings season will really get rolling tonight. Names like Alphabet ( GOOGL) , Starbucks ( SBUX) , and Akamai  ( AKAM) are set to report. All three are big names and all three sit on the Nasdaq. Alphabet will have a lot of influence on the entire Russell 2000 vs. Nasdaq comparison Wednesday. One will likely only need to watch the reaction to Alphabet to know how the above discussion on small vs. tech will play out.
 
Other names worth noting before trading begins on Wednesday are Yum China ( YUMC) (is business picking back up?) and Yum! Brands ( YUM) , Mastercard ( MS) , Boeing ( BA) (how ugly is the balance sheet?), General Electric  ( GE) (how goes the turnaround?), Hasbro ( HAS) (feeling impact from shutdown?), Valero ( VLO) (impact from oil crashing?), and Spotify ( SPOT) (is the shelter-in-place boosting streaming audio?). When we get answers to these questions from these names and see how the market reacts, we should be able to plan out our attack for the remainder of earnings season.
 
(GE, SBUX and GOOGL are holdings in Jim Cramer's Action Alerts PLUS member club . Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now. )
 
 
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Timothy Collins had no position in any of the securities mentioned.

TAGS: Earnings | Investing | Options | Small Cap | Stocks | Earnings Preview

More from Stocks

The Markets Also Rise Quickly

James "Rev Shark" DePorre
Mar 1, 2021 4:22 PM EST

Fear of missing out permeated the day as the indexes bounced back.

BlackBerry's Calling

Mark Sebastian
Mar 1, 2021 3:27 PM EST

Here's a play in the stock and why I think it will dial back down.

NantKwest's Charts Are Extended When Compared to the Popular Moving Averages

Bruce Kamich
Mar 1, 2021 3:15 PM EST

Let's stand aside for now and see how things unfold.

The Battle Over Cannabis Operator Verano Holdings' Stock

Debra Borchardt
Mar 1, 2021 2:00 PM EST

Sol Global and MMCap are fighting in court over who owns or owes what of the company's shares.

Is Chevron Finally Ready to Make an Upside Breakout?

Bruce Kamich
Mar 1, 2021 1:44 PM EST

Let's check out some charts on the energy giant.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 06:05 PM EST PAUL PRICE

    Michael's (MIK) up on take-over rumors

    The NYT says talks are underway regarding a buyo...
  • 08:09 AM EST GARY BERMAN

    Monday Morning Fibocall for 3/1/2021

    Always a good idea to know where our bounce zones ...
  • 11:51 AM EST REAL MONEY

    Watch Bob Lang and Doug Kass Discuss Short-Selling!

    Bob Lang and Doug Kass with an engaging and educat...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login