August 23, 2020

The Nasdaq continues to press higher as it outperforms the S&P for six of the last eight days. Its relative strength line is now inches away from setting a new high for the first time in six weeks.

All seven FANGMAN components (FB, AMZN, NFLX, GOOG, MSFT, AAPL, NVDA) except NFLX are at or near record highs. TSLA can be added to this list due to its recent surge of as much as 54%.

With the exception of GOOG and AMZN, all of these first appeared as Focus List buy ideas in April and May. GOOG did not possess the relative strength that we look for and was passed on, while AMZN was first a buy idea in late March.

Currently, numerous growth-stock leaders form two-week consolidations and are unattractive technically for our purposes. Some are showing a few distribution days and are being watched closely to gauge the market's speculative sentiment.

Unfortunately, this leaves us with very few opportunities for fresh-money buys. Post-breakout follow-through is always where the rubber meets the road. Along these lines, the performance of recent breakouts is being monitored.

Click on the following charts to zoom in.

Autodesk (ADSK)

Ncino (NCNO)

Servicenow (NOW)

In sum, as go the several growth stocks that dominate the Nasdaq, so goes the direction of this important index. All except NFLX are trading at or near record highs. Otherwise, our menu of actionable issues remains slim as most growth leaders are extended, with some forming two-week patterns. Let's stay patient and realize this is all par for the course after the first five months of this bull market.

Kevin Marder

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All stock charts created using MarketSmith unless otherwise noted. ©2020 MarketSmith, Incorporated. All other charts created using TradeStation. ©2001-2020 TradeStation Technologies. All rights reserved.

The views contained herein represent those of Marder Investment Advisors Corp. At the time of this writing, of the stocks mentioned in this report, Marder Investment Advisors Corp., Kevin Marder, or an affiliate thereof held positions in AMZN and TSLA, though positions are subject to change at any time and without notice. Estimate data provided by FactSet. Expected earnings release dates provided by EarningsWhispers.