Roughly one-quarter of the S&P 500’s (^GSPC) 15% gain so far this year comes from five high-profile stocks: Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL) and Facebook (FB).
“S&P 500 returns over the next 3-5 years are inextricably linked to the performance of the Tech sector and especially those 5 names,” wrote Nick Colas, co-founder of DataTrek Research in a note to clients on Tuesday.
While the aforementioned five stocks are powerful for the broader market, one in particular has been taking on extra importance in recent weeks: Microsoft. The stock has hit multiple record highs recently and has a market cap of over $1 trillion. It’s up over 6% since May 1.
For context, Microsoft and Apple are in the Technology Sector, while Amazon is in the Consumer Discretionary Sector. Facebook and Alphabet are in the newly created Communication Services sector.
The Dow Jones Internet Composite Index is a float-adjusted market capitalization weighted index designed to represent the largest and most actively traded stocks of U.S. companies in the Internet industry. The exchange-traded fund, FDN, seeks investment results that correspond to the Dow Jones Internet Composite Index. Top 10 holding include…you guessed it the FANG stocks.
So if the FDN is tanking, then I pretty much know the entire Market is tanking and vice versa. Thus, FDN serves as a great proxy / index for the Equity Markets. So where is FDN heading next, lets go to the charts?
The playing field is between the goal post at $150 and $132. If price breaches the $150 level, consider it a touchdown. If price breaches the $132 level, consider it a fumble, with the opposing team gaining possession of the ball. However, a break below the monthly demand at $107 and it’s game over.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.