Many popular U.S. technology stocks have reported quarterly earnings.
Investors may want to know which tech stock is No. 1 among 11 in terms of money flows? Let’s explore with the help of a chart.
Chart
Please click here for a chart showing the ranks and segmented money flows in 11 popular technology stocks. Please note the following from the chart:
• Amazon AMZN, +5.66% is No. 1 in the non-risk-adjusted ranking, and Netflix NFLX, +0.00% is No. 2. The ranking is based on the six screens of the ZYX Change Method. Please click here to learn about the six screens.
Read: The engine for Amazon earnings growth has nothing to do with e-commerce
• Alibaba BABA, +1.85% is No. 1 in the risk-adjusted ranking, and Facebook FB, +0.93% is No. 2.
• Intel INTC, +2.24% has moved up to No. 3 in the risk-adjusted ranking. Competitor AMD AMD, +1.90% has moved up to No. 4 in the non-risk-adjusted ranking.
• Apple AAPL, -1.53% and Microsoft MSFT, +1.69% have slipped in their rankings.
• Nvidia NVDA, +1.43% and Tesla TSLA, +0.83% are ranked the lowest.
• The chart shows money flows segmented by smart money (professional investors), the momo (momentum) crowd and short squeeze.
• Smart money flows are extremely positive for Facebook and Intel, but neutral for Google GOOG, -0.21% GOOGL, -0.32%
• Smart money flows are negative for Nvidia and Tesla.
• Momo crowd money flow is extremely positive for Amazon and very positive for AMD.
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Which ranking to use?
Sophisticated investors use risk-adjusted rankings. Those with less sophistication tend to gravitate toward non-risk-adjusted rankings.
Risk-adjusted rankings should be used for long-term positions. Non-risk-adjusted rankings should be used for short-term positions that are for a trade, not an investment.
What to do now
What to buy or sell now depends on if you are a long-term investor, a short-term trader or both.
Money flows provide an edge and help you lower risks. In general, at The Arora Report we advocate buying in the buy zones. The buy zones are determined by complex algorithms. We also provide target zones, stop zones and proper position sizes.
For example, we recently started a position in AMD. The buy zone was $10 to $11.05. The first target zone is $12.43 to $13.18. The second target zone is $14.15 to $15.33. The stop zone is $9 to $9.34. Those who want a tighter stop may consider a stop on a partial quantity in the zone of $9.63 to $9.73. Maximum position size is 30% of full core position size.
At The Arora Report we also advocate diversifying by time frame. This way, if positions do not work out in one time frame, they work out in another. That lowers the risk.
As an example, AMD is a short-term position, not a long-term investment. We have profitably completed several short-term trades on AMD.
In contrast, Intel has been a long-term position originally bought at an average price of $34.01 at a time when Intel was a hated stock. Subsequent to the original purchase about six months ago, The Arora Report set a target for Intel of $56 to $58 when nobody on Wall Street was talking about such a high target. Now the stock is already at the original target. Please see “A breakout in this cheap, forgotten stock is powering the Dow Jones Industrial Average.”
Intel is trading around $55 as of this writing. The buy zones on Intel have been raised several times to help newer subscribers get into the stock. After blowout earnings, we are raising the target zone for Intel to $68 to $73.
Disclosure: Subscribers to The Arora Report may have positions in the securities mentioned in this article. Nigam Arora is an investor, engineer and nuclear physicist by background who has founded two Inc. 500 fastest-growing companies. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at Nigam@TheAroraReport.com.